EXHIBIT 10.1
AGREEMENT
IT IS AGREED effective the 3rd day of March, 1998 by, between and among Xxxxxx
Family Farms, Inc. ("MFF") and Bion Technologies, Inc. ("BION") as follows:
1) BION shall design and supervise permitting, construction and operation
of BION Nutrient Management Systems (NMS" or "System") at the locations and in
the approximate sizes as set forth herein:
a) Multiple NMS installations at Circle Xxxx Xxxx, Xxxxx XX, Xxxxxxx,
Xxxx including facilities adequate to process excess nutrients from not less
than 10,000 sows, 32,000 nursery pigs and 40,000 finishing hogs, in aggregate;
b) Three NMS installations in Kansas (two in Lane County, one in Xxxxxxxx
County), each including facilities adequate to process excess nutrients from
not less than 11,000 sows;
c) One NMS installation in Xxxxxx County, Missouri including facilities
adequate to process excess nutrients from not less than 75,000 sows;
d) Two to four NMS installations in the area of Laverne, Oklahoma
including facilities adequate to process excess nutrients from not less than
40,000 finishing hogs, in aggregate;
e) An NMS for the Squire sow farm in Bladen County, North Carolina
adequate to process excess nutrients from not less than 3,600 sows;
f) One demonstration NMS system in Iowa adequate to process excess
nutrients from not less than 3,300 finishing hogs which NMS shall include a
polishing ecoreactor and other components adequate to allow recycling and/or
discharge of water from NMS;
g) Additionally, MFF shall have the right to designate one existing hog
facility in North Carolina for a demonstration NMS system which shall include
a polishing ecoreactor and other components adequate to allow recycling and/or
discharge of water from NMS.
2) This Agreement (the "AGREEMENT") and, each NMS created pursuant
hereto, shall be subject to each and every provision of the existing agreement
concerning the Squire sow farm set forth at Exhibit A hereto (except the
provisions which are site specific to the Squire sow farm) provided, however
that the provisions concerning fees shall be controlled by the terms set forth
herein.
3) MFF (or the actual owner of each facility) shall sign a note payable
for BION fees calculated as follows:
Finishing Nursery
Sow Hog Hog
--- --- ---
Basic fees (one time) $7.00 $4.00 $1.00
Monitoring fees (monthly) $0.175 $0.10 $0.025
Fees shall be on a per animal "slot"basis. Fees shall be due under the note
as set forth in Exhibit B hereto. Monitoring fees shall be due under the note
for each of the first 48 months of operation of each NMS as per Exhibit B
hereto.
4) Until June 30, 1998 MFF may designate additional swine facilities for
which, subject to BION's right to reject such facilities on the basis of
economic, geographic or site specific characteristics, BION shall design and
supervise permitting, construction and operation upon the terms and conditions
set forth herein. MFF shall make such additional designation in writing
delivered to BION's Colorado executive offices.
5) On the last day of each of the first four years in which BION harvests
bio-solids from each NMS, BION shall pay and offset against the note (at
Exhibit B hereto) to MFF (or the actual owner of each facility on which the
NMS had been installed) a royalty of $3.85 per sow slot; $2.20 per finishing
hog slot; and $0.55 per nursery hog slot. BION shall have the right and
obligation to offset these royalties against any sums then due to BION with
respect to each such NMS including without limitation fees due on the note to
BION pursuant to paragraph 3 above. In the event BION does not harvest
bio-solids, then no sums under the note become due and payable.
6) Notwithstanding any language or implication of any sort whatsoever
herein or elsewhere, MFF acknowledges that:
a) all technologies (existing or as modified, extended, etc. in the future)
involved or embodied in the NMS installation are the sole property of BION;
and
b) all bio-solids (and/or "BionSoil") produced by each NMS are the sole
property of BION (subject to the limited royalty set forth above).
7) This AGREEMENT immediately binds the parties as to the NMS
installations set forth at paragraph 1 c), e), and g) above, provided such
installation locations are available to MFF on a reasonable and practical
basis. MFF shall use its best efforts to amend permit appli-cations in process
or take such other steps to facilitate use of BION NMS systems on the proposed
swine farms. MFF shall use its best efforts to obtain necessary consents and
approvals from its partners, co-owners and/or growers for the NMS
installations set forth at paragraph 1 a), b), d), and f) above within the
next thirty days.
8) In the event BION shall cease business for any reason whatsoever
during the term of the Agreement and there is no successor business, MFF is
hereby granted a limited license to use the technology owned by BION which is
incorporated in the NMS's set forth at paragraph 1 a) through g) above and any
additional NMS's for systems added pursuant to paragraph 4 above for operation
of the NMS's during the balance of the term of the Agreement. Additionally, in
such event, MFF may hire (as employees and/or consultants) persons who were
formerly employed by BION to aid MFF in the operation of the NMS'S.
9) MFF and BION agree to execute such other documents as may be
reasonably required to carry out the terms of this agreement as set forth
above.
XXXXXX FAMILY FARMS BION TECHNOLOGIES, INC.
by: /s/ X. Xxxxxx by: /s/ X. Xxxxxxxx
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Authorized Officer Authorized Officer
