AGREEMENT
IT IS AGREED this 15 day of December, 1999, effective December 20, 1999, by,
between and among LoTayLingKyur, Inc. ("LTLK"), LTLK Defined Benefit Plan
("DBP"), Xxxx X. Xxxxx ("MAS"), LoTayLingKyur Foundation ("F"), and Dublin
Holding, Ltd. ("DHL") (collectively "FIRST PARTIES") and Bion Environmental
Technologies, Inc. ("BION") as follows:
WHEREAS BION is entering into agreements ("D2 AGREEMENT") with D2 CO. ("D2")
concerning management, consulting and financing; and
WHEREAS D2 requires that BION and certain major shareholders and/or creditors
of BION, including FIRST PARTIES, agree to certain conditions as partial
consideration for the D2 AGREEMENT with BION; and
WHEREAS FIRST PARTIES consider the D2 AGREEMENT to be in the best interests of
BION and are willing to accept the following conditions;
NOW THEREFORE, IN CONSIDERATION of the mutual promises and covenants herein:
1) LTLK and DBP agree to exchange (on the effective date) existing convertible
promissory notes (with aggregate balance of $2,793,424.93 as of 11/30/99 plus
net advances and interest subsequent thereto) for new notes with a maturity
of 12/31/02, 1% interest per month (compounded), convertible into BION common
stock at $1.80 per share, in the form attached hereto as Exhibit A ("NEW
NOTES"). FIRST PARTIES agree that BION shall convert the NEW NOTES into the
number of shares which would be issued if NEW NOTES were held to maturity upon
the conclusion of not less than $10,000,000 aggregate financing of BION
subsequent hereto ("FINANCING"), on the condition that any senior instruments
issued by BION in the first $3,000,000 of financing arranged by D2 ("FIRST
FINANCING"), or any other financing arranged as part of FINANCING, convert (or
are used to exercise derivative securities of BION) into BION common stock at
the same time.
2) FIRST PARTIES agree to cancel and exchange each of the BION Class X
Warrants which each of FIRST PARTIES owns (or subsequently acquires) into 0.3
restricted shares of BION's common stock and 0.7 BION Class Z Warrants on the
effective date.
3) FIRST PARTIES agree to recommend, support and participate in, after or
contemporaneously with completion of FINANCING, a registered exchange
including BION Class X Warrants and BION Class Z Warrants with tentative
exchange ratios as follows:
1 Class X Warrant = 0.3 registered BION common shares; and
1 Class Z Warrant = 0.15 registered BION common shares;
provided, however, that based on events subsequent hereto the proposed
exchange ratios may need to be adjusted to insure fairness to all holders or
BION may elect to not proceed with the proposed exchange on any terms.
4) BION acknowledges that certain transactions may be made between and among
FIRST PARTIES in preparation for the transactions contemplated herein and BION
agrees to indemnify and hold harmless FIRST PARTIES from any and all "short
swing profit" liability which may arise under Section 16b of the Securities &
Exchange Act of 1934 as a result of matching with the transactions by FIRST
PARTIES herein and/or transactions made by FIRST PARTIES in preparation for
the transaction herein.
5) LTLK, MAS and BION acknowledge that D2 AGREEMENT will entail material
management re-arrangement at all levels of BION, both immediately and over
time, which may alter the services required by BION from LTLK and/or MAS; and
BION, LTLK and MAS agree that upon conclusion of FIRST FINANCING, LTLK and MAS
will have completed all services required by existing agreements and will have
earned the fees specified therein; and LTLK and MAS agree to cooperate with
BION and D2 in all management transitions.
6) FIRST PARTIES agree to execute together with D2 and other parties, an
agreement which provides for reasonable limitations on resale by FIRST PARTIES
of BION securities currently owned or subsequently acquired.
Bion Environmental Technologies, Inc. LoTayLingKyur, Inc.
by:/s/ Xxx Xxxxxxxx by: /s/ Xxxx X. Xxxxx
Authorized Officer Authorized Officer
LTLK Defined Benefit Plan
By: /s/ Xxxx X. Xxxxx
Authorized Officer
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
LoTayLingKyur Foundation
By: /s/ Xxxx X. Xxxxx
Authorized Officer
Dublin Holding, Ltd.
By: /s/ Xxxx X. Xxxxx
Authorized Officer
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