Exhibit 10.3
$500,000 Credit Facility
Bion Environmental Technologies, Inc. ("Biet") and Xxxxxx X.
Xxxxxxxx ("Lender") agree effective as of October 26, 1996 that Lender
will make a $500,000 credit facility available to Biet, and that Biet
will use such credit under the terms and conditions as described below:
* Biet will be able to borrow up to a maximum of $500,000 under this
credit facility.
* Biet may request that funds be advanced on either the first or the
fifteenth of any month, and Lender will make such funds available
within fifteen working days.
* Interest will be paid monthly in cash by Biet to Lender at the
rate of 1% per month on the drawn down balance, and if by mutual
agreement not paid in cash, will be added to the unpaid balance.
* The entire drawn down balance will be due and payable on December
31, 1999.
* There will be no prepayment penalties should Biet pay off the
drawn down amount prior to December 31, 1999.
* Advances from Lender to Biet shall be evidenced by a promissory
note in the form attached hereto as Exhibit A.
* The entire outstanding balance may be converted into units (the
"Units") at a conversion price of $4.50 per Unit by mutual agreement
between Biet and Lender at any time after January 1, 1998. Each
Unit shall consist of one share of the restricted and legended
common stock of Biet plus one warrant authorizing the holder to
purchase one share of the restricted and legended common stock of
Biet for a price of $4.50 per share for a period commencing at the
time of conversion and expiring December 31, 2001.
As additional consideration for establishing this credit facility,
for each $5.00 loaned to Biet, Biet shall issue to Lender one warrant
("Warrant") to purchase one share of Biet stock between November 15, 1998
and November 15, 2001 at a price of $4.50 per share. Further, as
incentive for Biet to pay the balance due at an earlier date than
December 31, 1999, it is agreed that if Biet pays the entire balance due
on or before December 31, 1998, the quantity of Warrants issued will be
reduced by 50%.
Bion Environmental Xxxxxx X. Xxxxxxxx
Technologies, Inc.
by: /s/ M. Xxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
Acting as its: Chief Financial Officer
EXHIBIT A
Principal Amount Due: $ 20,000 but in no event to
exceed $ 500,000
Date Due: January 1, 1999
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental
Technologies, Inc., a Colorado corporation ("Maker"), hereby promises to
pay to the order of Xxxxxx X. Xxxxxxxx, ("Holder"), its successors and
assignees, at X.X. Xxx 000, Xxxxxxxxx, Xxx Xxxx 00000, or at such other
place as the Holder of this Note may from time to time designate in
writing, the principal amount of twenty thousand dollars ($ 20,000)(but
in no event to exceed five hundred thousand dollars ($ 500,000)) in
lawful and immediately available money of the United States. All
outstanding principal shall be due and payable on or before December 31,
1999, if not previously paid.
Interest shall be paid in cash on the drawn down amount from date of
draw down at one percent (1.0%) per month, or if by mutual agreement not
paid in cash, will be added to the unpaid balance. If this Note 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):
(a) Default shall be made in the 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 shall admit in writing its inability to pay its
debts as they become due, files a petition in bankruptcy or makes a
petition to take advantage of an insolvency act; makes an assignment for
the benefit of creditors, commences a proceeding for the appointment of a
receiver, trustee liquidator or conservator of itself or of the whole or
any
_______________
** initial principal advanced to be inserted which sum shall be increased
by subsequent cash advances from Holder to Maker as described in the
Credit Facility to which this Note is attached.
substantial part of its properties; 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; or
(c) Maker shall be adjudged as bankrupt, or a court shall
enter 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 State or any state, or if,
under the provisions of any other law for the relief or aid of debtors, a
court shall assume custody or control of Maker or the whole or any
substantial part of his properties, or if there is commenced against
Maker any proceeding for any of the foregoing relief or if a petition in
bankruptcy is filed against Maker; or if Maker by any act indicates its
consent to approval of or acquiescence in any such proceeding or
petition; then and in such event, and at any time thereafter, if such or
any other Event of Default shall then be continuing, 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.
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 Chautauqua County, New York. 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: /s/ M. Xxxxx Xxxxxxxx
Authorized Officer
Date: December 1, 1996
