EXHIBIT 9.1
Letter of Intent Between Bion Environmental Technologies Inc. ("Bion")
and Evergreen Farm Inc. ("Evergreen")
This non-binding Letter of Intent sets forth the intentions of Bion and
Evergreen and shall provide the basis on which Bion and Evergreen will
proceed through certain preliminary stages to determine the material terms of
a possible subsequent binding agreement. Bion and Evergreen will proceed
along the path set forth below:
- Bion proposes to install a microaerobic animal waste treatment system
("System") at the Evergreen Farm ('Evergreen') that will reduce on-
farm nutrient discharges and air emissions as per the attached table
("Project").
- Once Bion has completed its initial planning for the Project, which
will include a site survey, preliminary engineering, determination
with Evergreen as to ownership and disposition of the solids and
nutrients produced/separated by the System, negotiations/discussions
determining the nutrient credit sale and quantity and overall public
assistance for the Project, then Evergreen will evaluate the final
Project and determine which of the following implementation options
it wishes to select:
* Ownership of the System: Bion would build the System and operate
it for a period of time (90-120 days) at nutrient and air emission
standards specified, train Evergreen personnel and thereafter
provide periodic review of the installation. Evergreen would
purchase the System at an agreed upon price which would include a
negotiated premium to Bion's actual cost.
* Fee based option #1: Evergreen would pay a fee per milk cow for
its milking herd (plus up to 15% dry cows) not to exceed $100 per
year. Bion would be responsible for all capital and operating
costs. Same System qualification program would be required. This
would be a 10 year agreement.
* Fee based option #2: Evergreen could elect to be a financial
partner to Bion in this Project.
- Public support for Project: Bion will take the lead and Evergreen
will be a supporting player. In order to obtain support for funding
of this Project, Bion will meet with an assortment of Pennsylvania
and US government/regulatory officials. These meetings will likely
include state general assembly and federal congressional
representatives, executive branch agencies such as the State
Department of Agriculture, Department of Environmental Protection,
county extension agents, USDA officials, and other organizations that
may have an impact on funding, subsidy payments, or general support.
As a part of this process, Evergreen will need to be prepared to
receive and respond to calls from various private and governmental
persons/entities to verify facts, clarify plans, and enter into
general discussions related to the Project. The process may also
include a few on-farm meetings, and, on some rare occasions,
Evergreen personnel may need to attend an off-site meeting.
Evergreen understands that its participation in this process will be
crucial, with the understanding that Bion will work to minimize these
sorts of distractions to the greatest extent possible.
The final agreement between the parties will need to address many additional
matters and agree on material terms acceptable to Bion and Evergreen
including the following:
1. Ownership and ultimate disposition of the by-products (coarse and
fine solids, nutrients) from the System.
2. Operating standards for the System whether operated by Bion or
Evergreen: essential because it relates to both Evergreen's
environmental compliance and Bion's ability to use the facility as
a showcase to further its business.
3. Agreed upon procedure to enable Bion to bring visitors to the site.
4. Normal contractual requirements and provisions for both parties.
If the above reflects your understanding of the intent of the parties, please
sign below and return to Bion together with the executed
Confidentiality/Proprietary Information Agreement.
Yours,
Bion Environmental Technologies, Inc.
/s/ Xxxxx Xxxxx, 8/18/07
Evergreen Farm
By: /s/ Xxxxxx X. Xxxxxxxx, 8/16/07
Table 1. Summary of Pollution Control Standards for a Typical Bion Waste
Management System
Liquid Effluent
Discharge Residual
Parameter a Atmospheric Emissions
----------- ------------------- ------------------------------------------------------
N P NH3 CH4 H2S NOx VOC
(Nitrogen) (Phos- (Ammonia) (Methane) (Hydrogen (Nitrogen (Volatile
phorous) Sulfide) Oxides) Organic
Compounds)
----------- ---------- -------- --------- --------- --------- -------- -----------
lb / cow - year b
---------------------------------------------------------------------------
Bion
Process
Direct
c 0.60 50 1.0 0.040 0.15
----------- ---------- -------- --------- --------- --------- -------- -----------
Whole
Farm
Bion Waste 107 to 15 to 18 130 4.0 0.32 3.2
Mgmt 130 18
System a a
d
----------- ---------- -------- --------- --------- --------- -------- -----------
a Effluent from storage to land application / irrigation.
b A cow is defined as a 1,400 pound lactating production dairy cow.
c Emissions from the open surfaces of the complete mix Bion nutrient management system
determined from direct monitoring of the Bion process units.
d Whole farm waste management system atmospheric emissions are all those generated from
the point of waste generation from the animal, milk-house, etc., all waste handling and
processing, and emissions produced after land application for crop uptake assuming all
residuals, liquid and solids remain on the farm. All non-waste management system
emission components such as emissions from animal enteric releases or those generated
from feed handling and storage are not included.
