EXHIBIT 10.3
THIS BRIDGE WARRANT HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF THE
HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. NEITHER THIS BRIDGE WARRANT
NOR THE SHARES ISSUABLE UPON THE EXERCISE OF THIS BRIDGE WARRANT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
2001 Bridge Warrant
Bridge Warrant to Subscribe ________, 2001
for ______ shares
Void After December 31, 2005
THIS CERTIFIES that, for value received, ___________________, or its
registered assigns ("Holder"), is entitled to subscribe for and purchase from
Bion Environmental Technologies, Inc., a Colorado corporation (hereinafter
called the "Company"), at the price of $1.50 per share (such price as from
time to time adjusted as hereinafter provided being hereinafter called the
"Warrant Price"), at any time prior to December 31, 2005 (the "Warrant
Expiration Date"), up to ______ (subject to adjustment as hereinafter
provided) fully paid and nonassessable shares of Common Stock, no par value
per share, of the Company (hereinafter called the "Common Stock"), subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. This Bridge Warrant was issued pursuant to a certain Note and Warrant
Purchase Agreement, dated as of ________, 2001 (the "Purchase Agreement"),
among the Company and certain other parties and the rights and benefits
contained therein shall inure to the benefit of all subsequent holders of this
Bridge Warrant. The Bridge Warrants issued pursuant to the Purchase Agreement
and any warrant or warrants subsequently issued upon exchange or transfer
thereof are hereinafter collectively called the "Bridge Warrants.""Registered
Holder" shall mean, as to any Bridge Warrant and as of any particular date the
person in whose name the certificate representing the Bridge Warrant shall be
registered on that date on the books maintained by the Company pursuant to
Section 3(b).
Section 1. Exercise of Bridge Warrant.
(a) Method of Exercise. The rights represented by this Warrant
may be exercised by the holder hereof, in whole at any time or from time to
time in part, but not as to a fractional share of Common Stock, by the
surrender of this Warrant (properly endorsed) at the office of the Company as
it may designate by notice in writing to the holder hereof at the address of
such holder appearing on the books of the Company, and as further provided
below in this Section 1 by payment to the Company of the Warrant Price in cash
or by certified or official bank check, for each share being purchased.
(b) Delivery of Certificates. Etc. In the event of any exercise
of the rights represented by this Bridge Warrant, a certificate or
certificates for the shares of Common Stock so purchased, registered in the
name of the holder, shall be delivered to the holder hereof within a
reasonable time, not exceeding ten days, after the rights represented by this
Bridge Warrant shall have been so exercised; and, unless this Bridge Warrant
has expired, a new Bridge Warrant representing the number of shares (except a
remaining fractional share), if any, with respect to which this Bridge Warrant
shall not then have been exercised shall also be issued to the holder hereof
within such time. The person in whose name any certificate for shares of
Common Stock is issued upon exercise of this Bridge Warrant shall for all
purposes be deemed to have become the holder of record of such shares on the
date on which the Bridge Warrant was surrendered and payment of the Warrant
Price and any applicable taxes was made, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
Section 2. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon exercise of Bridge Warrant, such number of shares of Common Stock
as shall then be issuable upon the exercise of all outstanding Bridge Warrant.
The Company covenants that all shares of Common Stock which shall be issuable
upon exercise of the Bridge Warrant shall, at the time of delivery (assuming
full payment of the purchase price thereof), be duly and validly issued, fully
paid, nonassessable and free from all issuance taxes, liens and charges with
respect to the issue thereof including, without limitation, adverse claims
whatsoever (with the exception of claims arising through the acts of the
Registered Holders themselves and except as arising from applicable Federal
and state securities laws), that the Company shall have paid all taxes, if
any, in respect of the original issuance thereof and that upon issuance such
shares, to the extent applicable, shall be listed on, or included in, the
Stock Market. As used herein, "Stock Market" shall mean the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, shall mean NASDAQ or, if the Common Stock is not quoted
on Nasdaq, shall mean the OTC Bulletin Board or, if the Common Stock is not
quoted on the OTC Bulletin Board, shall mean the over-the-counter market as
furnished by any NASD member firm selected from time to time by the Company
for that purpose.
(b) The Company covenants that if any securities to be reserved
for the purpose of exercise of the Bridge Warrant hereunder require
registration with, or the approval of, any governmental authority under any
federal securities law before such securities may be validly issued or
delivered upon such exercise, then the Company will in good faith and as
expeditiously as reasonably possible, endeavor to secure such registration or
approval. The Company will use reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws; provided,
that the Company shall not be required to qualify as a foreign corporation or
file a general or limited consent to service of process in any such
jurisdictions or make any changes in its capital structure or any other
aspects of its business or enter into any agreements with blue sky
commissions, including any agreement to escrow shares of its capital stock.
With respect to any such securities, however, Bridge Warrants may not be
exercised by, or shares of Common Stock issued to, any Registered Holder in
any state in which such exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes
and other similar governmental charges that may be imposed with respect to the
issuance of Bridge Warrants, or the issuance or delivery of any shares upon
exercise of the Bridge Warrants; provided, however, that if the shares of
Common Stock are to be delivered in a name other than the name of the
Registered Holder on any Bridge Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Company
the amount of transfer taxes or charges incident thereto, if any.
Section 3. Exchange and Registration of Transfer.
(a) This Bridge Warrant may be exchanged for another Bridge
Warrant representing an equal aggregate number of Bridge Warrants of the same
class or may be transferred in whole or in part, by surrendering it to the
Company at its corporate office. Upon satisfaction of the terms and
provisions hereof, the Company shall execute, and the Company shall sign,
issue and deliver in exchange therefor, such new Bridge Warrant or Bridge
Warrants that the Registered Holder making the exchange shall be entitled to
receive.
(b) The Company shall keep at its office books in which, subject
to such reasonable regulations as it may prescribe, it shall register Bridge
Warrants and any transfers thereof in accordance with its regular practice.
Upon due presentment for registration of transfer of any Bridge Warrant at
such office, the Company shall execute and the Company shall issue and deliver
to the transferee or transferees a new Bridge Warrant or Bridge Warrants
representing an equal aggregate number of Bridge Warrants.
(c) With respect to all Bridge Warrants presented for registration
or transfer, or for exchange or exercise, the subscription form attached
hereto shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory to the Company,
duly executed by the Registered Holder or his attorney-in-fact duly authorized
in writing.
(d) Prior to due presentment for registration of transfer thereof,
the Company may deem and treat the Registered Holder of any Bridge Warrant as
the absolute owner thereof (notwithstanding any notations of ownership or
writing thereon made by anyone other than a duly authorized officer of the
Company) for all purposes and shall not be affected by any notice to the
contrary. The Bridge Warrants, which are being offered in Units with the
Bridge Notes pursuant to the Purchase Agreement, will immediately be
detachable and separately transferable from the Bridge Notes.
Section 4. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it of the ownership of and loss, theft, destruction or
mutilation of any Bridge Warrant and (in case of loss, theft or destruction)
of indemnity satisfactory to it, and (in the case of mutilation) upon
surrender and cancellation thereof, the Company shall execute, sign and
deliver to the Registered Holder in lieu thereof a new Bridge Warrant of like
tenor representing an equal aggregate number of Bridge Warrants.
Section 5. Redemption.
(a) At any time after the six month anniversary of the Final
Closing Date (as defined in the Purchase Agreement), so long as the Company
has caused the Registrable Securities to become registered in accordance with
Section 8 of the Purchase Agreement, the Company may, at its option, redeem
the Bridge Warrants at a price of $0.05 per share of Common Stock, as may
adjusted pursuant to Section 6 (the Redemption Price"), provided the Closing
Bid Price exceeds $3.50 per share of Common Stock for at least 20 trading days
in any 30 consecutive trading day period ending three days prior to the date
of notice of redemption (which shall be the date of mailing of such notice).
All outstanding Bridge Warrants must be redeemed if any are redeemed. The
date fixed for redemption of the Bridge Warrants is referred to herein as the
"Redemption Date." For purposes hereof, the "Closing Bid Price" for each
trading day shall be the reported per share closing bid price of the Common
Stock regular way on the Stock Market on such trading day.
(b) If the conditions set forth in Subsection 5(a) are met, and
the Company desires to exercise its right to redeem the Bridge Warrants, it
shall mail a notice of redemption to each of the Registered Holders of the
Bridge Warrants to be redeemed, first class, postage prepaid, not later than
the sixtieth day before the date fixed for redemption, at their last address
as shall appear on the records maintained pursuant to Subsection 3(b). Any
notice mailed in the manner provided herein shall be conclusively presumed to
have been duly given whether or not the Registered Holder receives such
notice.
(c) The notice of redemption shall specify (i) the Redemption
Price, (ii) the Redemption Date, (iii) the place where the Bridge Warrants
shall be delivered and the redemption price paid and (iv) that the right to
exercise the Bridge Warrants shall terminate at 5:00 P.M. (New York time) on
the business day immediately preceding the Redemption Date. No failure to
mail such notice nor any defect therein or in the mailing thereof shall affect
the validity of the proceedings for such redemption except as to a Registered
Holder (a) to whom notice was not mailed or (b) whose notice was defective.
An affidavit of the Secretary or an Assistant Secretary of the Company that
notice of redemption has been mailed shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.
(d) Any right to exercise a Bridge Warrant shall terminate at 5:00
P.M. (New York time) on the business day immediately preceding the Redemption
Date. On and after the Redemption Date, Holders of the Bridge Warrants shall
have no further rights except to receive, upon surrender of the Bridge
Warrants, the Redemption Price.
(e) From and after the Redemption Date, the Company shall, at the
place specified in the notice of redemption, upon presentation and surrender
to the Company by or on behalf of the Registered Holder thereof of one or more
Bridge Warrants to be redeemed, deliver or cause to be delivered to or upon
the written order of such Holder a sum in cash equal to the redemption price
of such Bridge Warrants. From and after the Redemption Date and upon the
deposit or setting aside by the Company of a sum sufficient to redeem all the
Bridge Warrants called for redemption, such Bridge Warrants shall expire and
become void and all rights hereunder, except the right to receive payment of
the Redemption Price, shall cease.
Section 6. Adjustment of Warrant Price and Number of Shares of Common
Stock or Bridge Warrants. Upon each adjustment of the Warrant Price pursuant
to this Section 6, the total number of shares of Common Stock purchasable upon
the exercise of each Bridge Warrant shall (subject to the provisions contained
in Subsection 6(c)) be such number of shares (calculated to the nearest tenth)
purchasable at the Warrant Price in effect immediately prior to such
adjustment multiplied by a fraction, the numerator of which shall be the
Warrant Price in effect immediately prior to such adjustment and the
denominator of which shall be the Warrant Price in effect immediately after
such adjustment.
(a) Except as otherwise provided herein, in the event the Company
shall, at any time or from time to time after the date hereof, (i) sell or
issue any shares of Common Stock for a consideration per share less than the
Warrant Price in effect on the date of such sale or issuance, (ii) issue any
shares of Common Stock as a stock dividend to the holders of Common Stock, or
(iii) subdivide or combine the outstanding shares of Common Stock into a
greater or fewer number of shares (any such sale, issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter
upon each further Change of Shares, the Warrant Price in effect immediately
prior to such Change of Shares shall be changed to a price (rounded to the
nearest cent) determined by multiplying the Warrant Price in effect
immediately prior thereto by a fraction, the numerator of which shall be (x)
the sum of (A) the number of shares of Common Stock outstanding immediately
prior to the sale or issuance of such additional shares or such subdivision or
combination plus (B) the number of shares of Common Stock that the aggregate
consideration received (determined as provided in Paragraph 6(g)(v)) for the
issuance of such additional shares would purchase at the Warrant Price in
effect on the date of such issuance and the denominator of which shall be (y)
the number of shares of Common Stock outstanding immediately after the sale or
issuance of such additional shares or such subdivision or combination. Such
adjustment shall be made successively whenever any such issuance is made.
(b) In case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Company with or into another entity (other than
a consolidation or merger in which the Company is the continuing entity and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock other than the number thereof),
or in case of any sale or conveyance to another entity of the property of the
Company as, or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of a Bridge Warrant then outstanding
shall have the right thereafter, by exercising such Bridge Warrant, upon the
terms and conditions specified in the Bridge Warrant and in lieu of the shares
of Common Stock immediately theretofore purchasable upon exercise of the
Bridge Warrant, to purchase the kind and number of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock that might have
been purchased upon exercise of such Bridge Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6. The Company shall not effect any
such consolidation, merger or sale unless prior to, or simultaneously with,
the consummation thereof the successor (if other than the Company) resulting
from such consolidation or merger or the entity purchasing assets or other
appropriate entity shall assume, by written instrument executed and delivered
to the Company, the obligation to deliver to the holder of each Bridge Warrant
such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holders may be entitled to purchase and the other
obligations under this Bridge Warrant. The foregoing provisions shall
similarly apply to successive reclassifications, capital reorganizations and
other changes of outstanding shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
(c) If, at any time or from time to time, the Company shall issue
or distribute to the holders of shares of Common Stock evidence of its
indebtedness, any other securities of the Company or any cash, property or
other assets (excluding an issuance or distribution governed by one of the
preceding Subsections of this Section 6 and also excluding cash dividends or
cash distributions paid out of net profits legally available therefor in the
full amount thereof (any such non-excluded event being herein called a
"Special Dividend")), then in each case the Registered Holders of the Bridge
Warrants shall be entitled to a proportionate share of any such Special
Dividend as though they were the holders of the number of shares of Common
Stock of the Company for which their Bridge Warrants are exercisable as of the
record date fixed for the determination of the holders of Common Stock of the
Company entitled to receive such Special Dividend.
(d) The Company may elect, upon any adjustment of the Warrant
Price hereunder, to adjust the number of Bridge Warrants outstanding, in lieu
of the adjustment in the number of shares of Common Stock purchasable upon the
exercise of each Bridge Warrant as hereinabove provided, so that each Bridge
Warrant outstanding after such adjustment shall represent the right to
purchase one share of Common Stock. Each Bridge Warrant held of record prior
to such adjustment of the number of Bridge Warrants shall become that number
of Bridge Warrants (calculated to the nearest tenth) determined by multiplying
the number one by a fraction, the numerator of which shall be the Warrant
Price in effect immediately prior to such adjustment and the denominator of
which shall be the Warrant Price in effect immediately after such adjustment.
Upon each adjustment of the number of Bridge Warrants pursuant to this Section
6, the Company shall, as promptly as practicable, cause to be distributed to
each Registered Holder of Bridge Warrants on the date of such adjustment
Bridge Warrants evidencing, subject to Section 7, the number of additional
Bridge Warrants to which such Holder shall be entitled as a result of such
adjustment or, at the option of the Company, cause to be distributed to such
Holder in substitution and replacement for the Bridge Warrants held by him
prior to the date of adjustment (and upon surrender thereof, if required by
the Company) new Bridge Warrants evidencing the number of Bridge Warrants to
which such Holder shall be entitled after such adjustment.
(e) Irrespective of any adjustments or changes in the Warrant
Price or the number of shares of Common Stock purchasable upon exercise of the
Bridge Warrants, the Bridge Warrants theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Bridge Warrants
pursuant to Subsection 3(a), continue to express the same Warrant Price per
share, number of shares purchasable thereunder and Redemption Price therefor
as when the same were originally issued.
(f) After each adjustment of the Warrant Price pursuant to this
Section 6, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Warrant Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Bridge Warrant after such adjustment, and,
if the Company shall have elected to adjust the number of Bridge Warrants
pursuant to Subsection 6(d), the number of Bridge Warrants to which the
registered holder of each Bridge Warrant shall then be entitled, and the
adjustment in Redemption Price resulting therefrom, and (iii) a brief
statement of the facts accounting for such adjustment. The Company will cause
a brief summary thereof to be sent by ordinary first class mail to each
Registered Holder of Bridge Warrants at his or her last address as it shall
appear on the registry books. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of such
adjustment. The affidavit the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
(g) For purposes of Subsections 6(a) and 6(d), the following
provisions (i) to (v) shall also be applicable:
(i) the number of shares of Common Stock deemed outstanding
at any given time shall include all shares of capital stock convertible into,
or exchangeable for, Common Stock (on an as converted basis) as well as all
shares of Common Stock issuable upon the exercise of (x) any convertible debt,
(y) warrants outstanding on the date hereof and (z) options outstanding on the
date hereof.
(ii) No adjustment of the Warrant Price shall be made unless
such adjustment would require an increase or decrease of at least $.01 in such
price; provided that any adjustments which by reason of this Paragraph (ii)
are not required to be made shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment which, together with
adjustments so carried forward, shall require an increase or decrease of at
least $.01 in the Warrant Price then in effect hereunder.
(iii) In case of (1) the sale by the Company (including as a
component of a unit) of any rights or warrants to subscribe for or purchase,
or any options for the purchase of, Common Stock or any securities convertible
into or exchangeable for Common Stock (such securities convertible,
exercisable or exchangeable into Common Stock being herein called "Convertible
Securities"), or (2) the issuance by the Company, without the receipt by the
Company of any consideration therefor, of any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Common Stock or
Convertible Securities, whether or not such rights, warrants or options, or
the right to convert or exchange such Convertible Securities, are immediately
exercisable, and the consideration per share for which Common Stock is
issuable upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(x) the minimum aggregate consideration, as set forth in the instrument
relating thereto without regard to any antidilution or similar provisions
contained therein for a subsequent adjustment of such amount, payable to the
Company upon the exercise of such rights, warrants or options, plus the
consideration received by the Company for the issuance or sale of such rights,
warrants or options, plus, in the case of such Convertible Securities, the
minimum aggregate amount, as set forth in the instrument relating thereto
without regard to any antidilution or similar provisions contained therein for
a subsequent adjustment of such amount, of additional consideration, if any,
other than such Convertible Securities, payable upon the conversion or
exchange thereof, by (y) the total maximum number, as set forth in the
instrument relating thereto without regard to any antidilution or similar
provisions contained therein for a subsequent adjustment of such amount, of
shares of Common Stock issuable upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such Convertible Securities
issuable upon the exercise of such rights, warrants or options) is less than
the Warrant Price of the Common Stock as of the date of the issuance or sale
of such rights, warrants or options, then such total maximum number of shares
of Common Stock issuable upon the exercise of such rights, warrants or options
or upon the conversion or exchange of such Convertible Securities (as of the
date of the issuance or sale of such rights, warrants or options) shall be
deemed to be "Common Stock" for purposes of Subsections 6(a) and 6(d) and
shall be deemed to have been sold for an amount equal to such consideration
per share and shall cause an adjustment to be made in accordance with
Subsections 6(a) and 6(d).
(iv) In case of the sale or other issuance by the Company of
any Convertible Securities, whether or not the right of conversion or exchange
thereunder is immediately exercisable, and the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (x) the total amount of consideration
received by the Company for the sale of such Convertible Securities, plus the
minimum aggregate amount, as set forth in the instrument relating thereto
without regard to any antidilution or similar provisions contained therein for
a subsequent adjustment of such amount, of additional consideration, if any,
other than such Convertible Securities, payable upon the conversion or
exchange thereof, by (y) the total maximum number, as set forth in the
instrument relating thereto without regard to any antidilution or similar
provisions contained therein for a subsequent adjustment of such amount, of
shares of Common Stock issuable upon the conversion or exchange of such
Convertible Securities) is less than the Warrant Price of the Common Stock as
of the date of the sale of such Convertible Securities, then such total
maximum number of shares of Common Stock issuable upon the conversion or
exchange of such Convertible Securities (as of the date of the sale of such
Convertible Securities) shall be deemed to be "Common Stock" for purposes of
Subsections 6(a) and 6(d) and shall be deemed to have been sold for an amount
equal to such consideration per share and shall cause an adjustment to be made
in accordance with Subsections 6(a) and 6(d).
(v) In case the Company shall modify the rights of
conversion, exchange or exercise of any of the securities referred to in
Paragraphs (iii) or (iv) of this Subsection 6(g) or any other securities of
the Company convertible, exchangeable or exercisable for shares of Common
Stock, for any reason other than an event that would require adjustment to
prevent dilution, so that the consideration per share received by the Company
after such modification is less than the Warrant Price as of the date prior to
such modification, then such securities, to the extent not theretofore
exercised, converted or exchanged, shall be deemed to have expired or
terminated immediately prior to the date of such modification and the Company
shall be deemed, for purposes of calculating any adjustments pursuant to this
Section 6, to have issued such new securities upon such new terms on the date
of modification. Such adjustment shall become effective as of the date upon
which such modification shall take effect. On the expiration or cancellation
of any such right, warrant or option or the termination or cancellation of any
such right to convert or exchange any such Convertible Securities, the Warrant
Price then in effect hereunder shall forthwith be readjusted to such Warrant
Price as would have obtained (a) had the adjustments made upon the issuance or
sale of such rights, warrants, options or Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
theretofore actually delivered (and the total consideration received therefor)
upon the exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities and (b) had adjustments been made
on the basis of the Warrant Price as adjusted under clause (a) of this
sentence for all transactions (which would have affected such adjusted Warrant
Price) made after the issuance or sale of such rights, warrants, options or
Convertible Securities.
(vi) In case of the sale of any shares of Common Stock, any
Convertible Securities, any rights or warrants to subscribe for or purchase,
or any options for the purchase of, Common Stock or Convertible Securities,
the consideration received by the Company therefor shall be deemed to be the
gross sales price therefor without deducting therefrom any expense paid or
incurred by the Company or any underwriting discounts or commissions or
concessions paid or allowed by the Company in connection therewith. In the
event that any securities shall be issued in connection with any other
securities of the Company, together comprising one integral transaction in
which no specific consideration is allocated among the securities, then each
of such securities shall be deemed to have been issued for such consideration
as the Board of Directors of the Company determines in good faith; provided,
however that if holders of more than of 10% of the then outstanding Bridge
Warrants disagree with such determination, the Company shall retain an
independent investment banking firm for the purpose of obtaining an appraisal.
(h) Notwithstanding any other provision hereof, no adjustment to
the Warrant Price of the Bridge Warrants or to the number of shares of Common
Stock purchasable upon the exercise of each Bridge Warrant will be made:
(i) upon the exercise of any of the options outstanding on
the date hereof under the Company's existing stock option plans; or
(ii) upon the issuance or exercise of options which may
hereafter be granted with the approval of the Board of Directors, or
exercised, under any employee benefit plan of the Company to officers,
directors, consultants or employees, but only with respect to such options as
are exercisable at prices no lower than the Closing Bid Price (or, if the
price referenced in the definition of Closing Bid Price cannot be determined,
the Fair Market Value (as defined below)) of the Common Stock as of the date
of grant thereof; or
(iii) upon the issuance or sale of Common Stock or
Convertible Securities pursuant to the exercise of any rights, options or
warrants to receive, subscribe for or purchase, or any options for the
purchase of, Common Stock or Convertible Securities, whether or not such
rights, warrants or options were outstanding on the date of the original sale
of the Bridge Warrants or were thereafter issued or sold, provided that an
adjustment was either made or not required to be made in accordance with
Subsections 6(a) and 6(d) in connection with the issuance or sale of such
securities or any modification of the terms thereof; or
(iv) upon the issuance or sale of Common Stock upon
conversion or exchange of any Convertible Securities, provided that any
adjustments required to be made upon the issuance or sale of such Convertible
Securities or any modification of the terms thereof were so made, and whether
or not such Convertible Securities were outstanding on the date of the
original sale of the Bridge Warrants or were thereafter issued or sold.
Paragraph 6(g)(iv) shall nevertheless apply to any modification of the rights
of conversion, exchange or exercise of any of the securities referred to in
Paragraphs (i) and (ii) of this Subsection 6(h). For purposes hereof, "Fair
Market Value" shall mean the average Closing Bid Price for twenty (20)
consecutive trading days, ending with the trading day prior to the date as of
which the Fair Market Value is being determined, (with appropriate adjustments
for subdivisions or combinations of shares effected during such period)
provided that if the prices referred to in the definition of Closing Bid Price
cannot be determined for such period, "Fair Market Value" shall be the fair
market value as determined by the Board of Directors in good faith.
(i) As used in this Section 6, the term "Common Stock" shall mean
and include the Company's Common Stock authorized on the date of the original
issue of the Units and shall also include any capital stock of any class of
the Company thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary liquidation,
dissolution or winding up of the Company; provided, however, that the shares
issuable upon exercise of the Bridge Warrants shall include only shares of
such class designated in the Company's Certificate of Incorporation, as
amended, as Common Stock on the date of the original issue of the Units or
(i), in the case of any reclassification, change, consolidation, merger, sale
or conveyance of the character referred to in Subsection 6(c), the stock,
securities or property provided for in such section or (ii), in the case of
any reclassification or change in the outstanding shares of Common Stock
issuable upon exercise of the Bridge Warrants as a result of a subdivision or
combination or consisting of a change in par value, or from par value to no
par value, or from no par value to par value, such shares of Common Stock as
so reclassified or changed.
(j) Any determination as to whether an adjustment in the Warrant
Price in effect hereunder is required pursuant to Section 6, or as to the
amount of any such adjustment, if required, shall be binding upon the holders
of the Bridge Warrants and the Company if made in good faith by the Board of
Directors of the Company.
(k) If and whenever the Company shall grant to the holders of
Common Stock, as such, rights or warrants to subscribe for or to purchase, or
any options for the purchase of, Common Stock or securities convertible into
or exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company may at its option elect concurrently therewith to grant to
each Registered Holder as of the record date for such transaction of the
Bridge Warrants then outstanding, the rights, warrants or options to which
each Registered Holder would have been entitled if, on the record date used to
determine the shareholders entitled to the rights, warrants or options being
granted by the Company, the Registered Holder were the holder of record of the
number of whole shares of Common Stock then issuable upon exercise of his or
her Bridge Warrant. If the Company shall so elect under this Subsection 6(k),
then such grant by the Company to the holders of the Bridge Warrants shall be
in lieu of any adjustment which otherwise might be called for pursuant to this
Section 6.
Section 7. Fractional Warrants and Fractional Shares. If the number of
shares of Common Stock purchasable upon the exercise of each Bridge Warrant is
adjusted pursuant to Section 6, the Company nevertheless shall not be required
to issue fractions of shares, upon exercise of the Bridge Warrant or
otherwise, nor to distribute certificates that evidence fractional shares.
With respect to any fraction of a share called for upon any exercise hereof,
the Company shall pay to the Registered Holder an amount in cash equal to such
fraction multiplied by the Fair Market Value of one share of Common Stock as
of the date of exercise.
Section 8. Warrant Holders Not Deemed Shareholders. No holder of
Bridge Warrants shall, as such, be entitled to vote or to receive dividends or
be deemed the holder of Common Stock that may at any time be issuable upon
exercise of such Bridge Warrants for any purpose whatsoever, nor shall
anything contained herein be construed to confer upon the holder of Bridge
Warrants, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or reclassification
of stock, change of par value or change of stock to no par value,
consolidation, merger or conveyance or otherwise), or to receive notice of
meetings, or to receive dividends or subscription rights, until such Holder
shall have exercised such Bridge Warrants and been issued shares of Common
Stock in accordance with the provisions hereof.
(a) Rights of Action. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Bridge
Warrants, and any Registered Holder of a Bridge Warrant, without consent of
the holder of any other Bridge Warrant, may, in his own behalf and for his own
benefit, enforce against the Company his right to exercise his Bridge Warrant
for the purchase of shares of Common Stock in the manner provided herein;
provided, however, that no Registered Holder shall institute any suit or
proceeding for the enforcement of any of the Bridge Warrants unless the
Registered Holders of at least a majority of the Bridge Warrants outstanding
join in such suit or proceeding.
Section 9. Agreement of Warrant Holders. Every holder of any Bridge
Warrant, by his acceptance thereof, consents and agrees with the Company and
every other holder of any Bridge Warrant that:
(i) The Bridge Warrants are transferable only on the registry
books of the Company by the Registered Holder thereof in person or by his or
her attorney duly authorized in writing and only if such Bridge Warrants are
surrendered at the office of the Company, duly endorsed or accompanied by a
proper instrument of transfer satisfactory to the Company, in its sole
discretion, together with payment of any applicable transfer taxes; and
(ii) The Company may deem and treat the person in whose name
the Bridge Warrant is registered as the holder and as the absolute, true and
lawful owner thereof for all purposes, and the Company shall not be affected
by any notice or knowledge to the contrary, except as otherwise expressly
provided in Section 3.
Section 10. Investment Representation and Legend. The holder, by
acceptance of the Bridge Warrants, represents and warrants to the Company that
it is acquiring the Bridge Warrants and the shares of Common Stock (or other
securities) issuable upon the exercise hereof for investment purposes only and
not with a view towards the resale or other distribution thereof and agrees
that the Company may affix upon this Bridge Warrant the following legend:
"This Warrant has been issued in reliance upon the representation
of the holder that it has been acquired for investment purposes
and not with a view towards the resale or other distribution
thereof. Neither this Warrant nor the shares issuable upon the
exercise of this Warrant have been registered under the Securities
Act of 1933, as amended."
The holder, by acceptance of this Bridge Warrant, further agrees that the
Company may affix the following legend to certificates for shares of Common
Stock issued upon exercise of this Bridge Warrant:
"The securities represented by this certificate have been issued
in reliance upon the representation of the holder that they have
been acquired for investment and not with a view toward the resale
or other distribution thereof, and have not been registered under
the Securities Act of 1933, as amended. Neither the securities
evidenced hereby, nor any interest therein, may be offered, sold,
transferred, encumbered or otherwise disposed of unless either (i)
there is an effective registration statement under said Act
relating thereto or (ii) the Company has received an opinion of
counsel, reasonably satisfactory in form and substance to the
Company, stating that such registration is not required."
Section 11. Cancellation of Bridge Warrants. If the Company shall
purchase or acquire any Bridge Warrant or Bridge Warrants, by redemption or
otherwise, each such Bridge Warrant shall thereupon be and canceled by it and
retired. The Company shall also cancel the Bridge Warrant or Bridge Warrants
following exercise of any or all thereof or delivered to it for transfer,
split up, combination or exchange.
Section 12. Modification of Bridge Warrant. The terms of the Bridge
Warrants shall not be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Holders representing at least a
majority of the Bridge Warrants then outstanding.
Section 13. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed by means of first class registered or certified
mail, postage prepaid as follows: if to the Registered Holder of a Bridge
Warrant, at the address of such holder as shown on the registry books
maintained by the Company; if to the Company, at 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX 00000, or at such other address as may have been furnished to the
Registered Holder in writing by the Company.
Section 14. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to principles of conflict of laws.
Section 15. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, the Registered Xxxxxx and their
respective successors and assigns, and the holders from time to time of the
Bridge Warrants. Nothing in this Bridge Warrant is intended nor shall be
construed to confer upon any other person any right, remedy or claim, in
equity or at law, or to impose upon any other person any duty, liability or
obligation.
Section 16. Registration Rights. The rights of the holder hereof with
respect to the registration under the Securities Act of 1933, as amended, of
the shares of Common Stock issuable upon the exercise of this Bridge Warrant
are set forth in the Purchase Agreement.
IN WITNESS WHEREOF, the Company has caused this Bridge Warrant to be duly
executed as of the date first above written.
BION ENVIRONMENTAL
TECHNOLOGIES, INC.
By: ________________________________
Authorized Officer
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Bridge Warrant
The undersigned Registered Holder hereby irrevocably elects to exercise
__________ Bridge Warrants represented by this certificate, and to purchase
the securities issuable upon the exercise of such Bridge Warrants, and
requests that certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
[please print or type name and address]
and be delivered to
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
[please print or type name and address]
and if such number of Bridge Warrants shall not be all the Bridge Warrants
evidenced by this Warrant Certificate, that a new Bridge Warrant for the
balance of such Bridge Warrants be registered in the name of, and delivered
to, the Registered Holder at the address stated below.
The undersigned represents that the exercise of the within Bridge Warrant
was solicited by a member of the National Association of Securities Dealers,
Inc. If not solicited by an NASD member, please write "unsolicited" in the
space below.
___________________________________
(Name of NASD Member)
Dated: __________________________ ___________________________________
___________________________________
___________________________________
Address
___________________________________
Taxpayer Identification Number
___________________________________
Signature Guaranteed
ASSIGNMENT
To Be Executed by the Registered Holder
In Order to Assign Bridge Warrant
FOR VALUE RECEIVED, hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
______________________________________________________
______________________________________________________
______________________________________________________
[please print or type name and address]
________________________________ of the Bridge Warrants represented hereby,
and hereby irrevocably constitutes and appoints
__________________________________________________________________________
Attorney to transfer this Bridge Warrant on the books of the Company, with
full power of substitution in the premises.
Dated: ________________________ _______________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND
MUST BE GUARANTEED BY A MEMBER OF THE MEDALLION STAND PROGRAM.
