SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: May 21, 1999
(Date of earliest event reported)
Bion Environmental Technologies, Inc.
(Exact Name of Registrant as Specified in its Charter
Colorado 0-19333 84-1176672
(State of (Commission (I.R.S. Employer
Incorporation) File No.) Identification No.)
555 17th Street, Suite 3310, Denver, Colorado 80202
(Address and Zip Code of Principal Executive Offices)
Registrant's telephone number including area code: (303) 294-0750
<PAGE>
ITEM 5. OTHER EVENTS.
1. Effective May 21, 1999, the Company entered into an agreement with Mark A.
Smith ("MAS) and LoTayLingKyur, Inc. ("LTLK"), a major shareholder of the
Company, pursuant to which MAS became the Company's Chairman. MAS will also
serve as a director of the Company and a member of the Executive Committee.
See Exhibit 10.1. Mr. Smith, through his own holdings and those of his
family, those of LTLK, and pursuant to a voting agreement (see exhibit 10.2)
votes a majority of the Company's common stock. Jon Northrop will continue
his role as President and CEO of Bion as well as being a director and member
of the Executive Committee. Jere Northrop, Bion's previous Chief Operating
Officer, will continue as a director and will become Bion's Chief Technology
Officer, also effective on May 21, 1999. Additionally, effective May 21,
1999, LTLK agreed to exchange two short-term convertible promissory notes for
one long-term convertible promissory note. See Exhibit 10.3.
2. The Company's largest Bion NMS animal waste processing system has commenced
operations at Circle Four Farms in Milford, Utah. The system will treat the
waste of over 40,000 hogs. The Company expects BionSoil production at an
estimated 36,000 cubic yards per year beginning approximately one year from
system start-up.
3. The Company declared a stock and warrant dividend on May 21, 1999. All
shareholders of record date May 30, 1999 received one share of common stock
for every ten shares held and one Class X Warrant for every five shares held.
See exhibit 10.4. The dividend was issued on June 14, 1999.
4. Bion opened a new office in Coarsegold, California. The new office is part of
the Company's recent expansion into California and the Northwest region of
the Country including Arizona, Utah, Montana, Idaho, Washington, and Oregon.
Bion's expansion in California is focusing initially in the San Joaquin
Valley, which is a center for dairy farms and high value agricultural crops.
The Company anticipates substantial market opportunities for its systems with
the resulting ability to produce and market BionSoil products to consumers in
the area.
5. The Company made agreements with five parties, including Jon Northrop, CEO,
Jere Northrop, CTO, M. Duane Stutzman, CFO, and one other employee whereby
the Company issued long-term promissory notes to each party for payables
aggregating $793,500. See exhibit 10.5.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
Date: June 21, 1999 By: /s/ M. Duane Stutzman
-----------------------------
M. Duane Stutzman, Chief
Financial Officer
<PAGE>
INDEX TO EXHIBITS
Financial Statements and Exhibits.
10.1 Consulting Agreement between LoTayLingKyur, Inc. and Bion
Environmental Technologies, Inc.
10.2 Voting agreement between Jon Northrop, MAS, LTLK, and Dublin Holding, Ltd.
10.3 Promissory Note agreement between LoTayLingKyur, Inc. and Bion
Environmental Technologies, Inc.
10.4 Class X Warrant
10.5 Promissory Note agreements between Bion Environmental
Technologies, Inc. and five parties.
Exhibit 10.1
CONSULTING/ENGAGEMENT AGREEMENT
This Agreement effective as of May 21, 1999, by and between Bion Environmental
Technologies, Inc. ("Company"), and LoTayLingKyur, Inc. ("LTLK") and Mark A.
Smith ("MAS").
WHEREAS, the Company desires that MAS act as Chairman and Executive Committee
member and director of the Company; and
WHEREAS, MAS is employed by LTLK; and the Company agrees to retain the services
of MAS with the consent of LTLK upon the conditions contained in this Agreement;
AND WHEREAS, MAS and LTLK desire to provide services to the Company under such
conditions;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the Company does hereby agree to engage MAS and MAS does
hereby agree to be engaged by the Company, upon the terms and conditions set
forth in the following paragraphs:
1. Engagement Period. The Company hereby engages MAS for the period commencing
May 21, 1999 and ending December 31, 2001 ("Engagement Period") to serve as
Chairman, director, and Executive Committee member with the Company and to
render such other services in an executive capacity as the Company shall
reasonably require. MAS hereby agrees to remain in the service of the
Company for the Engagement Period, subject to the provisions of this
Agreement.
2. Duties. MAS agrees that at all times during the Engagement Period he will
faithfully and diligently endeavor to promote the business and business
interests of the Company. This Agreement shall not restrict MAS from
engaging, directly or indirectly, in any business or activity which is not
competitive with the business of the Company; provided, however, that such
additional business or activity does not interfere with nor is inconsistent
with the performance by MAS of his duties under this Agreement.
3. Compensation and Benefits. Subject to the provisions of this Agreement,
during the Engagement Period, compensation for MAS' services shall be as
follows:
a.) LTLK shall earn an aggregate fee of $626,667 for the entire term
payable by: issuance to LTLK of (1) a convertible promissory note
("Note") with an initial principal amount of $626,667, in the form of
Exhibit 1, and (2) 626,667 X warrants in the form attached hereto as
Exhibit 2.
b.) The Company agrees that (1) all warrants of the Company held by LTLK
and/or Dublin Holding, Ltd. ("DHL") other than Z warrants shall become
X warrants with no adjustment for the stock/warrant dividend declared
May 21, 1999.
c.) To the extent that MAS and/or LTLK incur expenses on behalf of the
Company or advance funds to the Company subsequent to May 21, 1999:
i.) The funds shall be added to the principal of the Note.
ii.) LTLK shall be issued one Class X warrant for each $1.00 added to
the principal of the Note.
d.) The outstanding obligations of the Company to LTLK shall be replaced
by a promissory note identical to the Note except as to principal
amount. Exhibit 10.1
e.) All Z warrants issued to LTLK between April 1, 1999 and May 21, 1999
shall become X warrants.
f.) The Board of Directors of the Company will review the compensation
herein no less than once per year with a view to making such increases
in LTLK's compensation or declaring such bonuses or other benefits as
may be merited and warranted in light of factors considered pertinent
by the Board of Directors.
g.) MAS shall receive free of cost parking for his automobile; health,
hospitalization and life insurance with coverage exceeding or equal to
that now in force through the Company; as well as such other benefits
as the Board may deem appropriate from time to time.
4. Expenses. All reasonable and necessary expenses incurred by MAS and/or LTLK
in the performance of MAS's duties under this Agreement, including but not
limited to expenses for entertainment, travel, and similar items, shall be
paid by the Company as set forth above upon receipt of appropriate
documentation of such expenses. Company shall provide, at its expense, MAS
with office space as necessary and secretarial, legal, accounting, and
other services as may be necessary to properly support MAS's performance of
his duties and to operate in the best interests of the Company.
5. Disability of MAS. In the event of the disability of MAS (as defined
herein) prior to the expiration of the Engagement Period, MAS shall
nevertheless continue to be compensated as set forth above. For purposes of
this Agreement, MAS shall be deemed to be fully disabled if, because of
illness or other physical or mental condition, he is unable to fully
perform all of his duties under this Agreement for two successive months.
In the event that he is unable to perform all or a portion of the duties
required under this Agreement for short periods of time aggregating over
two months in any twelve successive calendar months, he shall be deemed to
be partially disabled. The compensation and benefit period shall run from
the time disability commenced until MAS's condition improves sufficiently
to permit him to fully perform his duties, after which date he must be
available at the Company's option. The Company may require such evidence of
disability as it deems appropriate.
6. Termination Upon Death and Disability. The Engagement Period shall
automatically terminate upon the death of MAS; provided, however, that in
the event of MAS's death, all compensation MAS is receiving under Paragraph
3 of this Agreement at the time of his death shall be paid to his legal
representative. At the discretion of the Board of Directors, the Engagement
Period may terminate upon the Disability of MAS (as defined in Paragraph 5
above); provided, however, that MAS shall continue to receive compensation
in accordance with Paragraph 5 above.
7. Termination for Cause. Upon the occurrence of any of the events listed
below, the Company may terminate MAS without further obligation under this
Agreement:
a.) MAS's conviction of any criminal act directly related to MAS's duties
hereunder including, without limitation, misappropriation of funds or
property of the Company or any other felony criminal act.
b.) MAS's misfeasance or malfeasance in office, which shall mean fraud,
dishonesty, willful misconduct or gross neglect of duties.
c.) Breach by MAS of any material provision of this Agreement.
8. Termination Without Cause. In the event MAS is terminated by the Company
for any reason, except as set forth in Paragraph 7 above, he shall continue
to be compensated for the duration of the Engagement Period as provided for
in Paragraphs 3, 4, 5, and 6 hereof.
9. Termination Upon Change in Management. In the event that a change in
control of the Company shall occur at any time during the Engagement
Period, as a result of which the Board of Directors appoints a person other
than MAS to serve in the capacity for which MAS is engaged hereunder or as
a result of which MAS shall elect to resign his executive position
hereunder, MAS and LTLK nevertheless shall be entitled to the benefits of
and subject to all of the terms and conditions set forth herein, including,
without limitation, the right to receive compensation and benefits as
provided in Paragraphs 3, 4, 5, and 6 hereof regardless of whether MAS
continues to perform any services for the Company.
10. Vesting in the Event of Termination. In the event that MAS is terminated
upon death or disability (Paragraph 6), terminated without cause (Paragraph
8), or terminated upon change in management (Paragraph 9), all warrants,
options, or shares issued but unvested at the date of termination shall
become fully vested as of the date of termination.
11. Indemnification. The Company hereby agrees to indemnify and hold harmless
MAS, LTLK, and Dublin Holding, Ltd. from any and all costs and liabilities,
direct or indirect, etc. related to Section 16(b) short swing profit
calculation, resulting from matching with any transactions during May 1999,
which transactions were made in preparation for MAS entering the service of
the Company.
12. Parties in Interest. This Agreement shall be binding upon and shall inure
to the benefit of the Company and its successors and assigns and any person
acquiring, whether by merger, consolidation, liquidation, purchase of
assets or otherwise, all or substantially all of the Company's equity or
assets and business.
13. Choice of Law. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special
proceedings connected herewith be construed in accordance with and pursuant
to the laws of the State of Colorado and that in any action, special
proceeding or other proceeding that may be brought arising out of, in
connection with, or by reason of this Agreement, the laws of the State of
Colorado shall be applicable and shall govern to the exclusion of the law
of any other forum, without regard to the jurisdiction in which any action
or special proceeding may be instituted.
14. Severance of Invalid Provisions. In the event that any one or more of the
provisions of this Agreement or any portions thereunder is determined to be
invalid, illegal, or unenforceable in any respect, the validity, legality,
and enforceability of the remaining provisions contained herein shall not
in any way be affected or impaired thereby.
15. Integrated Agreement. This Agreement shall constitute the entire agreement
between the parties hereto relating to the Engagement of MAS.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer and MAS has executed this Agreement,
effective as of the date and year first above written.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: _______________________
Authorized Officer
_______________________
Mark A. Smith
LOTAYLINGKYUR, INC.
By: _______________________
Mark A. Smith, President
Initial Principal: $626,667*
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of
LoTayLingKyur, Inc., a Nevada corporation ("HOLDER"), and its successors and
assignees, at 409 Spruce Street, Boulder, Colorado 80302, or at such other place
as the HOLDER of this Note may from time to time designate in writing, all sums
due under this Note (plus interest) in lawful and immediately available money of
the United States. The initial principal of this loan is $626,667. Simple
interest shall be accrued at one percent (1.0%) per month from date owed by
MAKER. All outstanding principal and interest shall be due and payable on or
before December 31, 2001, if not previously paid. If this Note or interest due
hereunder is not paid when due or declared due hereunder, the principal shall
draw interest at the rate of one and one half percent (1.5%) per month.
The outstanding principal and interest due hereunder shall be convertible, in
whole or in part, at the option of HOLDER, into shares of MAKER's common stock
("Shares") at a price of $2.00 per share (equitably adjusted for subsequent
stock splits, dividends, mergers, etc.) at any time prior to payment by MAKER of
such principal and interest. MAKER shall give HOLDER 90 days' notice of intent
to pay the principal and interest of this Note during which period HOLDER may
elect to convert this Note to MAKER's common stock. Upon issuance, MAKER
represents that all shares received as a result of conversion of this Note shall
be fully-paid and non-assessable.
As additional consideration for making this Note, MAKER will issue one (1) X
Warrant, to purchase one share of MAKER's common stock at a price of $8.00 per
share (equitably adjusted for subsequent stock splits, dividends, mergers, etc.,
subsequent to the dividend declared May 21, 1999) for a 24 month period
commencing January 1, 2000, for each $1.00 of principal amount of the Note
advanced by Holder (no X Warrants will be issued for interest accumulated on the
principal amount of this Note).
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4)commences a proceeding for the appointment of
a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial part of its properties; (4) there is commenced against
MAKER any proceeding for any of the foregoing relief; (5) a petition
in bankruptcy is filed against MAKER; or (6) MAKER by any act
indicates its consent to approval of or acquiescence in any such
proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Boulder, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith. BION ENVIRONMENTAL
TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
Exhibit 10.2
May 21, 1999
Mark A. Smith
409 Spruce Street
Boulder, Colorado 80302
Dear Mark:
In consideration of your joining as Chairman of Bion Environmental
Technologies, Inc. ("BION"), I hereby relinquish all rights granted under the
Stock Voting Agreement of December 15, 1998 between Dublin Holding, Ltd.
("DHL"), LoTayLingKyur, Inc. ("LTLK"), BION and myself. This agreement is hereby
terminated effective May 21, 1999.
Sincerely,
/s/ Jon Northrop
Jon Northrop
Chief Executive Officer
STOCK VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement"), effective this 21st day of May, 1999,
is by and between Dublin Holding, Ltd. (the "Shareholder") and Mark A. Smith
("MAS").
WHEREAS, Shareholder owns shares of the issued and outstanding common stock of
Bion Environmental Technologies, Inc. ("BION") and warrants to purchase shares
of common stock of BION (collectively the "Securities").
NOW THEREFORE, in consideration of the mutual agreements of the parties hereto
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Shareholder hereby constitutes and appoints MAS with full power of
substitution, for the period commencing on the date hereof and ending on
January 1, 2002, to vote the Securities as the proxy of Shareholder, at any
and all meetings, regular or special, of the shareholders of BION, or at
any adjournments thereof, which may be held during such period, hereby
granting to said MAS (the "Proxy"), as Shareholder's attorney and Proxy,
all powers Shareholder would possess if personally present at any such
meetings. The Proxy granted hereby is expressly acknowledged to be coupled
with an interest and shall be irrevocable to the full extent permitted by
law until January 1, 2002, except to the extent specifically provided in
Paragraph 3 below. The Proxy granted hereby revokes any other proxy
relative to the Securities heretofore granted by Shareholder.
2. During the entire term of this Agreement, the Proxy shall have full and
absolute discretion as to the manner in which Securities are to be voted as
to any matter whatsoever, all without any liability or obligation of any
kind to Shareholder.
3. Nothing contained herein shall be construed in such a manner so as to
prohibit or preclude the sale or exchange of all or any part of the
Securities by Shareholder in accordance with the provisions of this
Paragraph 3. In the event that all or any portion of the Securities are
sold, assigned or exchanged by Shareholder (and/or its assigns) to
non-affiliated persons or entities prior to January 1, 2002, then the
transferred portion of the Securities shall no longer be subject in any
manner whatsoever to the voting restrictions set forth above, and shall be
entirely released from same, unless otherwise agreed to in writing.
4. A counterpart of this Agreement shall forthwith be deposited with BION at
its principal place of business.
5. This Agreement shall be construed in accordance with the laws of the State
of Colorado and shall be binding upon the successors and assigns of each
party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date set forth above.
Dublin Holding, Ltd.
By: ________________________
Authorized Officer
By: _____________________
Mark A. Smith
Exhibit 10.3
Initial Principal: $753,543.65
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of
LoTayLingKyur, Inc., a Nevada corporation ("HOLDER"), and its successors and
assignees, at 409 Spruce Street, Boulder, Colorado 80302, or at such other place
as the HOLDER of this Note may from time to time designate in writing, all sums
due under this Note (plus interest) in lawful and immediately available money of
the United States. The initial principal of this loan is $753,543.65. Simple
interest shall be accrued at one percent (1.0%) per month from date owed by
MAKER. All outstanding principal and interest shall be due and payable on or
before December 31, 2001, if not previously paid. If this Note or interest due
hereunder is not paid when due or declared due hereunder, the principal shall
draw interest at the rate of one and one half percent (1.5%) per month.
The outstanding principal and interest due hereunder shall be convertible, in
whole or in part, at the option of HOLDER, into shares of MAKER's common stock
("Shares") at a price of $2.00 per share (equitably adjusted for subsequent
stock splits, dividends, mergers, etc.) at any time prior to payment by MAKER of
such principal and interest. MAKER shall give HOLDER 90 days' notice of intent
to pay the principal and interest of this Note during which period HOLDER may
elect to convert this Note to MAKER's common stock. Upon issuance, MAKER
represents that all shares received as a result of conversion of this Note shall
be fully-paid and non-assessable.
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4) commences a proceeding for the appointment
of a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial part of its properties; (4) there is commenced against
MAKER any proceeding for any of the foregoing relief; (5) a petition
in bankruptcy is filed against MAKER; or (6) MAKER by any act
indicates its consent to approval of or acquiescence in any such
proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Boulder, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
Exhibit 10.4
Void after 3:30 p.m., Denver Time, on December 31, 2001
Warrant to Purchase
Shares
of Common Stock
CLASS X WARRANT TO PURCHASE COMMON STOCK
OF
BION ENVIRONMENTAL TECHNOLOGIES, INC.
This is to certify that ______________ ("Holder"), is entitled to purchase,
subject to the provisions of this Warrant, from Bion Environmental Technologies,
Inc., a Colorado corporation ("Company"), at any time on or after January 1,
2000, and not later than 3:30 p.m., Denver Time, on December 31, 2001, unless
extended as provided in Section (a) below _______ shares of common stock, no par
value per share, of the Company ("Common Stock") at a purchase price per share
of $8.00 (in cash or fair market value of property acceptable to the Company).
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid for a share of Common Stock may be adjusted
from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Stock" and the exercise price of a
share of Common Stock in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of Sections (k) hereof,
this Warrant may be exercised in whole or in part at any time or from
time to time on or after January 1, 2000, but not later than 3:30
p.m., Denver time on December 31, 2001, or if such date is a day on
which banking institutions are authorized by law to close, then on the
next succeeding day which shall not be such a day, by presentation and
surrender hereof to the Company or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price (in cash or equivalent
value) for the number of shares specified in such form, together with
all federal and state taxes applicable upon such exercise. The Company
may unilaterally extend the time within which the Warrant may be
exercised but is not obligated to do so, but not longer than twelve
(12) months. The Company may unilaterally reduce the exercise price
per share. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the right hereunder. Upon
receipt by the Company of this Warrant at the office or agency of the
Company, in proper form for exercise, the Holder shall be deemed to be
the holder of record of the shares of Common Stock issuable upon such
exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder.
(b) Reservation of shares. The Company, hereby agrees that at all times
subsequent hereto there shall be reserved for issuance and/or delivery
upon exercise of this Warrant such number of shares of its Common
Stock as shall be required for issuance or delivery upon exercise of
this Warrant ("Warrant Stock").
(c) Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.
With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the current market value of such
fractional share, determined as follows:
(1) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange, the
current value shall be the last reported sale price of the Common
Stock on such exchange on the last business day prior to the date
of exercise of this Warrant or if no such sale is made on such
day, the average closing bid and asked prices for such day on
such exchange; or
(2) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current value shall be the mean of the
last reported bid and asked prices reported by the National
Association of Securities Dealers Automated Quotation System (or,
if not so quoted on NASDAQ, by the National Quotation Bureau,
Inc.) on the last business day prior to the day of the exercise
of this Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported,
the current value shall be an amount, not less than book value,
determined in such reasonable manner as may be prescribed by the
Board of Directors of the Company, such determination to be final
and binding on the Holder.
(d) Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and
surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. No assignment of this
Warrant may be made without the written consent of the Company which
the Company may deny in its sole discretion. Any assignment hereof
shall be made by surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer
tax; whereupon the Company shall, without charge, execute and deliver
a new Warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. This Warrant
may be divided upon presentation hereof at the office of the Company
or at the office of its stock transfer agent, if any, together with a
written notice specifying the names and denominations in which new
Warrants are to be issued and signed by the Holder hereof. The terms
"Warrant" and "Warrants" as used herein include any Warrants issued in
substitution for a replacement of this Warrant, or into which this
Warrant may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company
will execute and deliver a new Warrant of like tenor and date. Any
such new Warrant executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or not this
Warrant so lost, stolen, destroyed, or mutilated shall be at any time
enforceable by anyone.
(e) Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed
in the Warrant and are not enforceable against the Company except to
the extent set forth herein.
(f) Adjustments to Exercise Price and Number of Shares. Anything in this
Section (f) to the contrary notwithstanding, in case the Company shall
at any time issue Common Stock or Convertible Securities by way of
dividend or other distribution on any stock of the Company or
subdivide or combine the outstanding shares of Common Stock, the
Company shall equitably adjust the terms of this Warrant.
(g) Officer's Certificate. Whenever the Exercise Price shall be adjusted
as required by the provisions of Section (f) hereof, the Company shall
forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office, and with its stock transfer agent,
if any, an officer's certificate showing the adjusted Exercise Price
determined as herein provided and setting forth in reasonable detail
the facts requiring such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the
Holder and the Company shall, forthwith after each such adjustment,
deliver a copy of such certificate to the Holder. Such certificate
shall be conclusive as to the correctness of such adjustment.
(h) Notices to Warrant Holders. So long as this Warrant shall be
outstanding and unexercised (i) if the Company shall pay any dividend
or make any distribution upon the Common Stock or (ii) if the Company
shall offer to the Holders of Common Stock for subscription or
purchase by them any shares of stock of any class or any other rights
or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
transfer of all or substantially all of the property and assets of the
Company to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Company shall cause to
be delivered to the Holder, at least ten days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing
a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or
winding up is to take place and the date, if any, is to be fixed as of
which the Holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up.
(i) Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a change
in par value, or from no par value to par value, or as a result of an
issuance of Common Stock by way of dividend or other distribution or
of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a
merger with a subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock
of the class issuable upon exercise of this Warrant) or in case of any
sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, the Company
shall cause an effective provision to be made so that the Holder shall
have the right thereafter, by exercising this Warrant, to purchase the
kind and amount of shares of stock and other securities and property
receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance. Any such provision
shall include a provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to
successive consolidations, mergers, sales or conveyances. In the event
that in any such capital reorganization or reclassification,
consolidation, merger, sale or conveyance, additional shares of Common
Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for or of a security of the Company
other than Common Stock, any such issue shall be treated as an issue
of Common Stock covered by the provisions of subsection (f) hereof
with the amount of the consideration received upon the issue thereof
being determined by the Board of Directors of the Company, such
determination to be final and binding on the Holder.
(j) Transfer to Comply with the Securities Act of 1933.
(1) This Warrant or the Warrant Stock or any other security issued or
issuable upon exercise of this Warrant may not be sold,
transferred or otherwise disposed of except to a person who, in
the opinion of counsel for the Company, is a person to whom this
Warrant or such Warrant Stock may legally be transferred pursuant
to Section (d) hereof without registration and without the
delivery of a current prospectus under the Securities Act with
respect thereto and then only against receipt of an agreement of
such person to comply with the provisions of this Section (j)
with respect to any resale or other disposition of such
securities.
(2) This warrant may be exercised only if a registration statement
covering the warrant stock has been declared effective by the
U.S. Securities & Exchange Commission or an exemption from
registration has been established to the satisfaction of legal
counsel of the Company.
(3) This Warrant may not be assigned or transferred with out the
express written consent of the Company, which may be withheld or
granted in the sole discretion of the Company.
(4) The Company may cause the following legend to be set forth on
each certificate representing Warrant Stock or any other security
issued or issuable upon exercise of this Warrant, unless counsel
for the Company is of the opinion as to any such certificate that
such legend is unnecessary:
"The securities represented by this certificate may not be offered for sale,
sold or otherwise transferred except pursuant to an effective registration
statement under the Securities Act of 1933 (the "Act"), or pursuant to an
exemption from registration under the Act the availability of which is to be
established to the satisfaction of the Company."
(k) Applicable Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of Colorado.
Bion Environmental Technologies, Inc.
Date: _______________ By: ___________________________________
Authorized Officer
PURCHASE FORM
Class X Warrant, January 1, 2000 through December 31, 2001, ______ shares
@$8/share
Dated ___________________
The undersigned hereby irrevocably elects to exercise this warrant to the extent
of purchasing __________ shares of Bion Environmental Technologies, Inc. Common
Stock and hereby makes payment of $________________ in payment of the actual
exercise price thereof.
------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(please typewrite or print in block letters)
Address____________________________________________________________
Signature__________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________ hereby sells, assigns, and
transfers unto:
Name_____________________________________________________
(please typewrite or print in block letters)
Address____________________________________________________________
============================================================
the right to purchase Common Stock represented by this Warrant to the extent of
______________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint _______________________________, attorney, to
transfer the same on the books of the Company with full power of substitution in
the premises.
Signature _________________________________________
Dated: _______________________
Initial Principal: $300,000
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of Jon
Northrop ("HOLDER"), and his successors and assignees, at 1922 W. Sanibel Ct.,
Littleton, Colorado 80120, or at such other place as the HOLDER of this Note may
from time to time designate in writing, all sums due under this Note (plus
interest) in lawful and immediately available money of the United States. The
initial principal of this loan is $300,000. Interest shall be accrued and added
to principal at one percent (1.0%) per month from date owed by MAKER. All
outstanding principal and interest shall be due and payable on or before
December 31, 2001, if not previously paid. If this Note or interest due
hereunder is not paid when due or declared due hereunder, the principal shall
draw interest at the rate of one and one half percent (1.5%) per month.
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4) commences a proceeding for the appointment
of a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial part of its properties; (4) there is commenced against
MAKER any proceeding for any of the foregoing relief; (5) a petition
in bankruptcy is filed against MAKER; or (6) MAKER by any act
indicates its consent Exhibit 10.5 to approval of or acquiescence in
any such proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Denver, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
Initial Principal: $230,000
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of Jere
Northrop ("HOLDER"), and his successors and assignees, at 1961 Tonawanda Creek
Rd., Amherst, New York 14228, or at such other place as the HOLDER of this Note
may from time to time designate in writing, all sums due under this Note (plus
interest) in lawful and immediately available money of the United States. The
initial principal of this loan is $230,000. Simple interest shall be accrued at
one percent (1.0%) per month from date owed by MAKER. All outstanding principal
and interest shall be due and payable on or before December 31, 2001, if not
previously paid. If this Note or interest due hereunder is not paid when due or
declared due hereunder, the principal shall draw interest at the rate of one and
one half percent (1.5%) per month.
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4) commences a proceeding for the appointment
of a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial part of its properties; (4) there is commenced against
MAKER any proceeding for any of the foregoing relief; (5) a petition
in bankruptcy is filed against MAKER; or (6) MAKER by any act
indicates its consentto approval of or acquiescence in any such
proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Denver, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
Initial Principal: $140,000
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of M. Duane
Stutzman ("HOLDER"), and his successors and assignees, at 7483 West Laurel Ave.,
Littleton, Colorado 80128, or at such other place as the HOLDER of this Note may
from time to time designate in writing, all sums due under this Note (plus
interest) in lawful and immediately available money of the United States. The
initial principal of this loan is $140,000. Simple interest shall be accrued at
one percent (1.0%) per month from date owed by MAKER. All outstanding principal
and interest shall be due and payable on or before December 31, 2001, if not
previously paid. If this Note or interest due hereunder is not paid when due or
declared due hereunder, the principal shall draw interest at the rate of one and
one half percent (1.5%) per month.
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4) commences a proceeding for the appointment
of a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial part of its properties; (4) there is commenced against
MAKER any proceeding for any of the foregoing relief; (5) a petition
in bankruptcy is filed against MAKER; or (6) MAKER by any act
indicates its consent to approval of or acquiescence in any such
proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Denver, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
Initial Principal: $38,500
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of Craig
Scott ("HOLDER"), and his successors and assignees, at 3252 E. Phillips Drive,
Littleton, Colorado 80122, or at such other place as the HOLDER of this Note may
from time to time designate in writing, all sums due under this Note (plus
interest) in lawful and immediately available money of the United States. The
initial principal of this loan is $38,500. Simple interest shall be accrued at
one percent (1.0%) per month from date owed by MAKER. All outstanding principal
and interest shall be due and payable on or before December 31, 2001, if not
previously paid. If this Note or interest due hereunder is not paid when due or
declared due hereunder, the principal shall draw interest at the rate of one and
one half percent (1.5%) per month.
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4) commences a proceeding for the appointment
of a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial part of its properties; (4) there is commenced against
MAKER any proceeding for any of the foregoing relief; (5) a petition
in bankruptcy is filed against MAKER; or (6) MAKER by any act
indicates its consent to approval of or acquiescence in any such
proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Denver, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
Initial Principal: $85,000
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies, Inc., a
Colorado corporation ("MAKER"), hereby promises to pay to the order of Family
Trust U/A 3rd U/W Catherine Northrop ("HOLDER"), and its successors and
assignees, at 1922 W. Sanibel Ct., Littleton, Colorado 80120, or at such other
place as the HOLDER of this Note may from time to time designate in writing, all
sums due under this Note (plus interest) in lawful and immediately available
money of the United States. The initial principal of this loan is $85,000.
Simple interest shall be accrued to principal at one percent (1.0%) per month
from date owed by MAKER. All outstanding principal and interest shall be due and
payable on or before December 31, 2001, if not previously paid. If this Note or
interest due hereunder is not paid when due or declared due hereunder, the
principal shall draw interest at the rate of one and one half percent (1.5%) per
month.
Upon default by the MAKER of the timely payment of principal or interest due
hereunder or upon any Event of Default as hereinafter defined, the HOLDER may,
in its sole discretion, withhold any payments due and payable to MAKER and apply
same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall occur for
any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law, pursuant to or in
compliance with any judgment, decree of order of any court, or any order, rule
or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this Note
or any other obligation of MAKER when such shall become due and
payable, whether at the stated maturity thereof or by acceleration or
otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become due;
(2) files a petition in bankruptcy or makes a petition to take
advantage of an insolvency act; (3) makes an assignment for the
benefit of creditors; (4) commences a proceeding for the appointment
of a receiver, trustee, liquidator, or conservator of itself or of the
whole or any substantial part of its properties; (5) files a petition
or answer seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or
conservator of MAKER or of the whole or any substantial part of its
properties, or approve a petition filed against MAKER seeking
reorganization or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States or any state;
(3) under the provisions of any other law for the relief or aid of
debtors, a court assumes custody or control of MAKER or the whole or
any substantial Exhibit 10.5 part of its properties; (4) there is
commenced against MAKER any proceeding for any of the foregoing
relief; (5) a petition in bankruptcy is filed against MAKER; or (6)
MAKER by any act indicates its consent to approval of or acquiescence
in any such proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located in
Denver, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 21, 1999
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* Plus any future advances made by LoTayLingKyur, Inc.
