Warrant Exercise and Release Agreement, dated January 13, 2025, by and among Brand Engagement Network Inc. and certain purchasers identified on the signature pages thereto

EX-10.1 2 ex10-1.htm

Exhibit 10.1

WARRANT EXERCISE AND RELOAD AGREEMENT

This Warrant Exercise and Reload Agreement (this “Agreement”) is dated as of January 13, 2025, between Brand Engagement Network Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”) identified on the signature page hereto and, solely for purposes of Section 3, the Non-Participating Purchasers identified on the signature page hereto. Reference is hereby made to (i) that certain Securities Purchase Agreement, dated August 26, 2024, as amended (the “August SPA”), for the issuance and sale to certain investors of shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) at a price per share of $5.00 and (ii) that certain Securities Purchase Agreement, dated May 28, 2024, (the “May SPA”), for the issuance and sale of 1,980,000 shares of Common Stock at a price per share of $2.50 and an aggregate of 3,960,000 warrants to purchase Common Stock, divided into two tranches consisting of (i) 1,980,000 Warrants immediately exercisable for a term of one year (the “May One-Year Warrants”) and (ii) 1,980,000 Warrants immediately exercisable for a term of five years (the “May Five-Year Warrants,” together with the May One-Year Warrants, the “May Warrants” and such shares underlying the May Warrants, the “May Warrant Shares”), each with an exercise price of $2.50 per share, to certain investors and the purchasers party thereto.

WHEREAS, prior to the execution of this Agreement, the Purchasers completed funding their purchase amounts under the May SPA;

WHEREAS, in a transaction priced above the “Minimum Price” in accordance with Nasdaq Rule 5635, under the August SPA, the Purchasers have completed the purchase of 110,000 shares of Common Stock at a price per share of $5.00, and in connection therewith, the Company issued a warrant to purchase up to 960,000 shares of Common Stock at an exercise price of $5.00 per share (the “Contribution Warrant”) in exchange for certain holders of Common Stock contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which 1,075,000 shares of Common Stock remain in such escrow account (the “Escrow Shares”); and

WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to induce the Purchasers to exercise certain of the May Warrants on the terms and in the amounts specified on Schedule A hereto (the “Exercise Schedule”).

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

1. Warrant Exercise.

	a.	Reduction in Committed Warrant Exercise Price. As an inducement to exercise the May Warrants issued under the May SPA, the Company and the Purchasers each severally agree to reduce the exercise price of May Warrants to purchase 1,074,999 shares of Common Stock issued to the Purchasers under the May SPA as set forth on Schedule A (such May Warrants to purchase 1,074,999 shares, the “Committed Warrants”) to an exercise price of $1.96 per share (the “New Exercise Price”), until May 30, 2025 (the “Exercise Price Reversion Date”), after which point the exercise price for any unexercised Committed Warrants shall automatically revert to $2.50 per share.

	b.	Agreement to Exercise Committed Warrants. The Purchasers, severally and not jointly, hereby agree with the Company to exercise for cash, the Committed Warrants issued to you under the May SPA as set forth on Schedule A on or before January 31, 2025, February 28, 2025 and March 27, 2025, as applicable, at the New Exercise Price and, upon such exercise, in consideration for each Committed Warrant so exercised, the Company shall issue you one new warrant to purchase one share of Common Stock exercisable for a term of two years (a “May Two-Year Warrant”) and one new May Five-Year Warrant, each with an exercise price of $1.71 per share (the “Reload Exercise Price”), to purchase shares of Common Stock (the “Reload Warrants”). The resale of the shares underlying the Committed Warrants has been registered with the SEC on Registration Statement No. 333-280366, originally filed with the SEC on June 20, 2024 (the “May SPA Resale Registration Statement”). To exercise the Committed Warrants, each Purchaser shall deliver a warrant exercise notice and deposit the appropriate funds into the Company’s bank account on or before the applicable funding date set forth on Schedule A in accordance with the terms of the Committed Warrants as modified hereby. Upon receipt of customary representation letters from the Purchasers, the Company shall issue the shares underlying the Committed Warrants without a restrictive legend; provided that such customary representation letters shall contain covenants of the Purchasers not to sell the shares underlying the Committed Warrants at any time in which the resale registration statement is not available, including after the date the Company files its annual report on Form 10-K for the fiscal year ended December 31, 2024 and prior to the SEC declaring a post-effective amendment to the May SPA Resale Registration Statement effective.

	c.	Optional May Warrant Exercise After Warrant Exercise Completed. Upon a Purchaser’s completion in full by the earlier of the date of the final March 27, 2025 obligation, but no later than the Exercise Price Reversion Date, of its obligation to exercise the number of Committed Warrants for which it is so obligated to exercise by January 31, 2025, February 28, 2025 and March 27, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable at the New Exercise Price (the “Optional Warrants”) for the remainder of their term. In the event a Purchaser exercises an Optional Warrant by June 30, 2025, it shall be issued (i) a new warrant to purchase Common Stock with an exercise price equal to the Reload Exercise Price and a term of two years and (ii) a new warrant to purchase Common Stock with an exercise price equal to the Reload Exercise Price and a term of five years (the “Optional Reload Warrants”).

	d.	Contribution Warrant. The exercise price of the Contribution Warrant is hereby reduced to $1.71 per share.

	2.	Escrow Shares. As further inducement to exercise the Committed Warrants, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share shall be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers. The number of shares of Common Stock to be transferred will be rounded down to the nearest whole share.

	3.	Effect on August SPA. The Purchasers’ and the Company’s obligations under the August SPA shall be abated until January 31, 2025. Upon the due exercise in full of the Committed Warrants set forth next to each Purchaser’s name on Schedule A under the column January 31, 2025 by January 31, 2025, the obligations of such Purchaser under the August SPA shall be extinguished, and the August SPA shall terminate as to such Purchaser. Upon completion of performance of the January 31, 2025 Committed Warrant exercise by all Purchasers under this Agreement by January 31, 2025, the obligations of the Non-Participating Purchasers under August SPA shall be extinguished, and the August SPA shall be fully terminated. Immediately following the execution of this Agreement, the Company shall file a post-effective amendment to the Registration Statement on Form S-1 (File No. 333-282130) to deregister the resale of all securities issuable under the August SPA that have not been paid for prior to the date hereof, and the Company shall have no further obligation under Section 3.1(q) of the August SPA to register any securities thereunder for resale.

	4.	Representations and Warranties. Each Purchaser and the Company hereby ratifies the representations, warranties, covenants and agreements contained in the August SPA and the May SPA in their entirety.

	5.	Acknowledgement as to Legal Counsel. Each Purchaser acknowledges that Haynes and Boone LLP is counsel to the Company and such Purchaser has obtained its own legal advice or consultation with respect to the transactions contemplated by this Agreement.

	6.	Registration. For those obligations paid for by the Purchasers under this Agreement, on or before June 30, 2025, the Company shall take commercially reasonable efforts to file, as promptly as practicable, but within fifteen days after June 30, 2025, a registration statement covering the resale of all shares of Common Stock underlying any Reload Warrants and any Optional Reload Warrants issued by the date of the filing of such resale registration statement. The Company shall have no other obligation to register any securities issued or issuable hereunder other than as explicitly provided by paragraph 1.a, 1.b and this paragraph 6.

	7.	Legend. The Purchaser understands that the issuance of the Reload Warrants and the Optional Reload Warrants and the shares of Common Stock for which the Reload Warrants and the Optional Reload Warrants are exercisable has not been registered under the Securities Act of 1933, as amended. The Reload Warrants and the Optional Reload Warrants shall bear the following restricted legend, and for so long as the shares of Common Stock underlying the Reload Warrants and Optional Reload Warrants are not registered pursuant to paragraph 6 above, they shall bear the following restricted legend:

		THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES OR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL (IF THE COMPANY SO REQUEST), IS AVAILABLE.

	8.	Acknowledgment with Respect to Nasdaq Compliance. Each Purchaser acknowledges that the Company has been informed by the Nasdaq that it expects to issue a notification of non-compliance to the Company with respect to the Company’s failure to comply with the Nasdaq’s “minimum bid price” requirement of $1.00. Purchaser acknowledges that there can be no guarantee that the Company will be able to regain compliance with the Nasdaq’s listing rules, and that the Company’s securities may be delisted from the Nasdaq as a result.

	9.	Miscellaneous. Sections 4.2, 4.3, 5.1-5.20 and 5.22 of the May SPA are incorporated herein by this reference as if set out fully herein and shall apply in all respects to this Agreement, mutatis mutandis.