SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: June 11, 1998
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(Date of earliest event reported)
Bion Environmental Technologies, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-19333 84-1176672
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(State of (Commission (IRS Employer
Incorporation) File No.) Identification No.)
555 17th Street, Suite 3310, Denver, Colorado 80202
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(Address and Zip Code of Principal Executive Offices)
Registrant's telephone number including area code: (303) 294-0750
ITEM 5. OTHER EVENTS.
(A) On July 31, 1998, Bion Environmental Technologies, Inc. (which along
with its subsidiaries is referred to as the "Company") signed an agreement
(hereby referred to as the "Agreement") with Crystal Springs Farms, LLC.
(hereby referred to as "CSF"), of Wray Colorado, to design, install and
operate 37 Bion NMS' swine waste treatment systems (the Company and CSF are
collectively the "Parties"). The Agreement anticipates that the systems will
be installed at CSF sites located in Dundy County, Nebraska with planned
capacity for approximately 660,000 finishing hogs (the "Project"). This
Agreement replaces and supersedes an agreement between the Parties originally
signed on November 11, 1997 and subsequently amended on November 13, 1997,
November 20, 1997, December 31, 1997, and January 16, 1998 (see Forms 8-K
dated September 30, 1997 and December 1, 1997). Although preliminary financing
approval has been obtained for the construction of the Project, it is
currently unknown when, if ever, that actual funding will ultimately be made
available. The Agreement: a. calls for the Company to receive various
project-related fees from CSF during the construction phase totaling
$3,300,000(including $110,000 already paid by CSF to the Company), b.
establishes an operation and maintenance fee that will be in excess of
$400,000 per year once all systems are in operation (anticipated to begin for
the first system approximately 18 months after construction is started), c.
defines royalties payable by the Company to CSF which are anticipated to be
paid from revenues generated by the sales of BionSoil' and d. modifies the
terms of the original agreement in the following areas, among others: i.
Michael Bowman will not become a director of the Company, ii. there will be no
initial capital investment by CSF in the Company and iii. CSF will acquire no
warrants as part of the Project funding. A copy of the Agreement is attached
hereto as Exhibit 10.1.
(B) On July 21, 1998 the Rocky Creek Dairy was issued a permit by the
state of North Carolina to install a Bion NMS waste management system in order
to handle the waste from a 515-cow dairy. This contract signing and
subsequent permit approval is the first dairy Bion NMS in North Carolina.
Construction is expected to begin in late summer 1998.
(C) On June 11, 1998 Eason Farms was issued a permit by the state of North
Carolina to install a Bion NMS waste management system in order to handle the
waste from 3,960 finishing hogs. The permit had been applied for before the
pending moratorium took place and therefore, was not affected by it.
Construction is expected to be complete in the fall of 1998.
(D) Effective August 1, 1998 the North Carolina office of the Company
relocated to 138 Uzzle Industrial Drive, Clayton, North Carolina 27520. The
new location includes a larger more effective office space and a plot of
ground that is being utilized as a growth test area for a variety of plants
using the Company's BionSoil.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 10.1: Agreement between Bion Technologies, Inc. and Crystal
Springs Farms, LLC. dated July 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
Date: August 19, 1998 By: /s/ Duane Stutzman
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Duane Stutzman,
Chief Financial Officer
INDEX TO EXHIBITS
Financial Statements and Exhibits.
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Exhibit 10.1 Agreement between Bion Technologies, Inc. and Crystal Springs
Farms, LLC. dated July 31, 1998.
Bion Technologies, Inc.
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Exhibit 10.1
BION NMS' INSTALLATION AGREEMENT
AMENDED AND RESTATED
This agreement (the "AGREEMENT") which amends, revises, restates and
supersedes all prior agreements by, between and among the parties is made and
entered into this 31st day of July, 1998, by and between Bion Technologies,
Inc. (hereinafter called "BION") a corporation organized under the laws of
Colorado and having a place of business at 555 17th Street, Suite 3310,
Denver, CO 80202 and Crystal Springs Farms, LLC, and/or assigns (hereinafter
called "CSF") having a place of business at 415 Main Street, Wray, CO 80758
(BION and CSF are collectively the "PARTIES").
WITNESSETH
WHEREAS, BION is a technology based company which has developed and
possesses pending and granted patent assets and certain confidential
proprietary information, data and experience relating to systems for the
treatment and processing of animal waste, for the production of organic soils,
humus, fertilizers, remediated organics and mixtures with other materials
which is considered by BION to be secret and confidential and to constitute a
valuable commercial asset; and,
WHEREAS, CSF acknowledges and understands the secret and confidential
nature of BION's confidential proprietary information, data and experience and
has executed an agreement in which CSF has specifically agreed to maintain
such information, data and experience confidential and has agreed not to use
such information, data and experience in the performance of any other work for
itself or others; and,
WHEREAS, CSF plans to construct a facility in Dundy County, Nebraska in
two phases with finishing capacity for approximately 330,000 hogs in each
phase, for a total finishing capacity of approximately 660,000 in both phases
(a total of 37 units ("UNITS") where each UNIT will provide approximately
18,000 hog slots ("HOG SLOTS", where the number of HOG SLOTS in a UNIT equal
the design capacity of the UNIT) make up the two phases). This AGREEMENT
specifically covers both phases (where the phases are hereinafter called
"PHASE I" and/or "PHASE II", and the two phases collectively are called the
"PROJECT").
NOW, THEREFORE, the PARTIES hereto do mutually agree to conduct their
business relationship as follows:
1. ENGAGEMENT OF BION
CSF hereby agrees to engage BION and BION hereby agrees to perform the
services set forth in ATTACHMENT A related to the Bion NMS systems for the
PROJECT (see Attachment A).
2. SCOPE OF SERVICES
BION shall provide services, (hereinafter referred to as the "WORK"), as set
forth in ATTACHMENT A in accordance with the Standard Terms and Conditions of
this AGREEMENT (ATTACHMENT B). BION retains the right to alter the WORK in
terms of the specific requirements of the PROJECT, provided however, if there
is an additional cost caused by BION's decision to alter the work (after
construction drawings have been approved by the PARTIES), these costs shall be
borne by BION (excluding expenses associated with the drying pad), or as may
be separately negotiated by CSF.
3. CSF'S RESPONSIBILITIES
A. CSF agrees to:
i. Provide to BION information, including previous reports, plans, and any
other data in the possession or control of CSF relative to the
WORK;
ii. give prompt written notice to BION whenever CSF observes or otherwise
becomes aware of any development that affects the WORK or timing of
BION's services;
iii. designate a representative having authority to give instruction, receive
information, define CSF's policies, and make decisions with respect
to the WORK;
iv. bear at all times any and all expenses for obtaining any and all
approvals and permits from public agencies or authorities (including,
but not limited to, field and laboratory tests and surveys) except to
the extent that future permits or regulatory approvals are required
as the direct result of actions taken by employees or designates
of BION;
v. bear the cost of all surveying, soils investigation, engineering,
equipment, materials, and construction required to design, install and
operate the Bion NMS including electrical power and equipment
maintenance and replacement, provided however, that any "in house"
costs of BION for these services will not be borne by CSF absent an
additional specific agreement in writing; and,
vi. physically operate and maintain the Bion NMS and its associated equipment
as defined in the Operations and Maintenance Manual
(the "O&M Manual") prepared for each system (see ATTACHMENT A), and bear
all sampling, analysis, and reporting costs for monitoring of the
Bion NMS as required by the appropriate regulatory agencies.
B. CSF agrees that each Bion NMS system designed and installed under the
terms of this AGREEMENT is designed for the specific use described in
this AGREEMENT and its ATTACHMENTS, is designed to treat a "normal"
waste and wastewater effluent that is produced by the confined animal hog
raising UNITS, and is not designed for any significant change in the
characteristics of the waste or wastewater delivered from the hog
houses to the system. CSF agrees to notify BION in writing in
advance if there will be any change from the "normal" waste and
wastewater, and agrees to keep all human wastes and toxic and
hazardous wastes out of the Bion NMS including but not limited to all
domestic wastewater from showers, toilets, and sinks, and any
needles, syringes, or any veterinary wastes (cleaners, detergents, and
disinfectants approved for use in normal operation of the facility
in normal quantities and/or concentrations will not be considered
toxic or hazardous wastes).
4. PERIOD OF PERFORMANCE
The primary term of the AGREEMENT shall be for the period beginning on the
date of execution of this AGREEMENT and shall continue for a period equal to
the term of the financing (or any extension thereof) secured for the project.
Following the primary term this agreement may be renewed for three successive
secondary terms of five years each as follows: Two years prior to the end of
the primary term or any secondary term, either party may decide that this
agreement will not be renewed for the first (or any subsequent) secondary
term. If either party does not give written notice of non-renewal to the
other party on or before the date two years prior to the end of the term, this
agreement will continue on the same terms for the next term.
5. BION COMPENSATION
A. Each site where a Bion NMS is being installed has its unique character.
This requires BION to individually design the application of the Bion NMS for
each site at which it is to be installed. BION's goal is to design each Bion
NMS application to complement the existing site as much as practicable. BION
agrees to perform the services described in Attachment A and such other
activities as required by this AGREEMENT. CSF agrees to pay BION in
consideration of this AGREEMENT $5.00 per HOG SLOT of capacity installed for
the PROJECT (contemplated to be an aggregate sum of $3,300,000 including the
$110,000 previously paid by CSF to BION) payable as follows:
i. $250,000 on the date of the first construction draw for the PROJECT,
assumed to be the date of closing of the financing for the
PROJECT,
ii. $79,500 on the date of the first construction draw for each of the
first 36 UNITS of the PROJECT, and,
iii. $78,000 on the date of the first construction draw for the 37th UNIT
of the PROJECT.
provided, however, if fewer than 37 UNITS are constructed, this payment
schedule shall be com-pressed on a ratable basis.
B. For WORK provided by BION beyond the scope of services described in
ATTACHMENT A, or for unforeseen circumstances or changes in the
scope of services required by CSF, BION shall be compensated for
such services as negotiated by BION and CSF.
6. BION NMS SYSTEM OPERATION COMPENSATION AND PAYMENT
A. CSF agrees to pay BION monthly operation fees ("MONTHLY FEE") for start-up
(after each UNIT is completed and ready to be occupied by pigs)
and operational services as described in ATTACHMENT A as follows:
i. $1,115 per month (approximately $0.062 per HOG SLOT) upon the start-up
of the first Bion NMS for the first UNIT.
ii. $1,115 per month (approximately $0.062 per HOG SLOT) for each
subsequent UNIT commencing with the start-up of the Bion NMS for each
such subsequent UNIT.
B. Commencing April 1 of the first year after start-up of the first Bion NMS
for the first UNIT, and on April 1 of each succeeding year during the
primary term of this AGREEMENT, the MONTHLY FEE (as may be previously
adjusted) for that Bion NMS and all subsequently installed Bion NMS's will
be increased at a rate equal to the increase in the Consumer Price
Index for the previous calendar year.
7. BIO-SOLIDS
A. Bio-solids which are produced in the operation of each Bion NMS are owned
by BION. BION agrees to harvest, process, and remove all acceptable
bio-solids from the site.
B. BION reserves the right to reject all bio-solids which are contaminated
with human wastes, toxic or hazardous materials including but not limited
to, needles, syringes, other veterinary wastes, or other foreign material.
Notice of any such rejection shall be made to CSF and their
designated operator/manager as soon as possible after determination is made
that there is a problem with any bio-solids. CSF agrees to harvest and
remove all rejected bio-solids from the site. Harvest and disposal of
such rejected bio-solids, and the costs related thereto, shall be the
sole responsibility of CSF. In the event that bio-solids are rejected
because of contamination, CSF shall pay BION for the royalty value of the
rejected bio-solids by offset of royalties as defined in Section 7.C.
Provided however, that if CSF has a requirement in its contract for
operations and/or management of the facility that prohibits the
contamination of bio-solids with human wastes, toxic or hazardous
materials including, but not limited to, needles, syringes, other
veterinary wastes, or other foreign materials then BION agrees that it
will not seek to recover any damages from CSF, but shall look solely
to the manager/operator of the facility for any recovery including, but
not limited to, fair market value of acceptable bio-solids for the
rejected bio-solids and/or BION's hard costs associated with the
rejected bio-solids. CSF will assign to BION any and all rights CSF
may have to seek damages from the manager/operator or third parties as
a result of the contamination of bio-solids.
C. On December 31 of the first full year of operation following the start up
of the first Bion NMS, and on December 31 of each of the succeeding
three years, BION shall pay CSF a royalty of $1.25 per HOG SLOT.
For each subsequent Bion NMS installed, BION shall pay similarly
calculated royalties to CSF. Commencing on December 31 of the fifth year
of operation of each Bion NMS and for each succeeding year of the primary
term of this AGREEMENT BION shall pay CSF an annual royalty of $0.25
per HOG SLOT. Royalty payments defined under this Section 7 C. shall be
reduced on a prorated basis for any period of time that the HOG SLOTS in
any UNIT are not occupied by finishing hogs (other than normal clean
up time between the removal of one herd of mature hogs and the
introduction of the next herd).
D. If either of the PARTIES desire to pay or receive the royalties
contemplated in 7.C. above in Bion Environmental Technologies, Inc.
common stock (or equivalents) or in BionSoil, the PARTIES agree to
negotiate in good faith as to the quantity and price of such
substitute payment.
8. SYSTEM OPERATION
A. CSF acknowledges that the operation of the Bion NMS systems contemplated by
this AGREEMENT requires extensive knowledge concerning patented and
proprietary information possessed by BION and hereby agrees that all personnel
working for the company that manages the hog raising facilities for CSF will
not be permitted to enter into the Bion NMS systems area without prior
permission from CSF and BION.
B. BION and CSF agree to negotiate in good faith to establish a procedure (or
procedures), based on modifications of the standard protocols for odor
detection and evaluation presented in Section 2150 of Standard Methods for the
Examination of Water and Wastewater, 18th Edition published jointly by the
American Public Health Association, the American Water Works Association and
the Water Environment Federation, to evaluate the odor produced by the Bion
NMS systems installed for this PROJECT relative to the odor produced from
traditional anaerobic lagoon systems for like sized hog raising facilities.
Such procedures shall include actions to be taken should any of the Bion NMS
systems fail an odor test, and the cure rights for CSF should such a failure
occur.
9. LIMITED LICENSE
In the event that BION shall cease business for any reason whatsoever
during the term of the AGREEMENT and there is no successor business, CSF is
hereby granted a limited license to use the technology owned by BION which is
incorporated in the NMS's for the operation of the NMS's during the balance of
the term of the AGREEMENT. Additionally, in such event, CSF may hire (as
employees and/or consultants) persons who were formerly employed by BION to
aid CSF in the operation of the NMS's.
10. ASSIGNMENT
BION agrees that CSF may assign its obligations hereunder to a mutually
acceptable party.
This AGREEMENT sets forth all material terms and conditions between the
PARTIES and shall be binding upon execution. The PARTIES hereto acknowledge
that more extensive lawyer drafted documents may be desired by either or both
PARTIES in which case this AGREEMENT shall be incorporated by reference
therein. This AGREEMENT, including all ATTACHMENTS, is subject to the Terms
and Conditions (ATTACHMENT B) which are made part hereof and which CSF
acknowledges that it has read. IN WITNESS WHEREOF, the PARTIES have caused
this AGREEMENT to be executed this 31st day of July, 1998.
BION TECHNOLOGIES, INC.: Crystal Springs Farms, LLC:
By: /s/ M. Duane Stutzman By: /s/ Michael A. Bowman
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Title: Authorized Agent Title: Authorized Agent
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ATTACHMENT A
SCOPE OF SERVICES
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BION NMS
BION has developed a patented waste management system, Bion NMS' to treat
agricultural waste streams. The Bion NMS is designed to treat the waste
stream from large confined animal feeding operations. It is designed to
reduce odor, reuse water and provide for the removal of nutrients from the
farm. The NMS is designed to stabilize and convert the nutrients in the
manure into a usable form. The system consists of a series of cyclically
connected components to process the waste stream of a confined animal
operation into a large microbial biomass and dries it into a soil like
material which can be transported off the site. A typical Bion NMS contains
bioreactor, solids ecoreactor, harvesting, and drying components and may
contain some or all of water storage area, polishing ecoreactor, or
evaporative basin. Every Bion NMS system is as unique as the agricultural
facility on which it is constructed. BION individually designs each Bion NMS
to complement the existing facilities' operation while optimizing any existing
components which may be usable. The Bion NMS is designed in accordance with
BION system standards and in compliance with Natural Resources Conservation
Service (NRCS) Standards and Specifications for waste storage lagoons.
This AGREEMENT covers BION's participation in PHASE I and PHASE II of
the CSF hog facility PROJECT. The PHASES of the PROJECT will provide finish
capacity facilities to hold approximately 660,000 hogs in inventory. The
PROJECT consists of thirty seven (37) UNITS where each UNIT is made up of 12
finishing buildings, with each building holding approximately 1,500 hogs.
Bion NMS systems will be designed to treat the waste production of the
PROJECT.
The following describes the work to be conducted by BION for the
pre-design, design, construction and operation of each Bion NMS:
1. PRE-DESIGN
A. BION will coordinate the pre-design activities required for the design of
the Bion NMS to be constructed at each UNIT. The pre-design information
detailed below must be provided to BION to ensure proper design and
construction of the Bion NMS.
B. BION will coordinate with CSF to obtain the site specific information
required by BION to complete the individually designed Bion NMS. The
information needed to complete the design is as follows: topographic survey
information, geologic information, regulatory information, wetlands
information, and flood prone areas information, and such other information as
BION may require to design the Bion NMS systems which information will be
supplied by CSF at their cost as long as such cost is reasonable.
I. TOPOGRAPHIC SURVEY INFORMATION
CSF shall provide BION a topographic survey of each of the intended UNIT
sites. The topographic survey provided to BION must include a survey of the
site with one (1) foot contour intervals tied into a local horizontal
coordinate system. The survey must be readable by AutoCAD and contain
information required to conduct a cut and fill analysis. The survey should
also locate any existing buildings and other landmarks needed to locate and
design the Bion NMS.
II. GEOLOGIC INVESTIGATION
CSF shall provide to BION the geotechnical information necessary to design and
construct the Bion NMS. This information is necessary to evaluate the
suitability of the site by examining subsurface soils, location of bedrock and
groundwater conditions. The information should contain data derived from
on-site test pits.
III. REGULATORY INFORMATION
Prior to designing the system, BION will investigate the regulations affecting
the design and construction of the Bion NMS. Regulations could include local
zoning ordinances, Department of Health requirements, State environmental
conservation and/or other Federal agency requirements. BION may need to
identify the PROJECT location and type during various conversations with
regulatory agencies.
IV. WETLANDS INFORMATION
During the early planning stages, BION will determine the proximity of the
Bion NMS to wetlands. BION will consult with the State regulatory authorities
concerning freshwater wetland regulations that may be applicable. In
addition, BION will consult with USDA's Fish and Wildlife Service and the U.S.
Army Corps of Engineers for wetlands under their jurisdiction.
V. FLOOD PRONE AREAS
BION will check with local agencies for flood zone maps and restrictions that
may be applicable. The Bion NMS must be protected from flooding so that a
flood event does not cause high nutrient materials to be washed out.
2. DESIGN
A. BION will design each site specific Bion NMS. BION will prepare the
detailed design drawings and specifications necessary for preparation of
construction drawings for the Bion NMS on each site. BION will prepare and
present the design drawings to CSF and regulatory authorities if necessary for
review and comment when the design drawings are approximately 50% complete.
CSF will notify BION, in writing, of any comments in regards to the design
drawings.
B. BION will coordinate with CSF consultants the final design and construction
drawings required for the Bion NMS construction. BION will design the Bion
NMS with due regard for the comments received from CSF during its review of
the preliminary design drawings. BION will complete the design drawings based
upon CSF's comments, if any. BION will provide CSF with three (3) copies of
the design drawings and specifications.
C. BION will prepare and provide an engineering design report, if required,
detailing all calculations and design criteria. BION will also assist in the
preparation of permit applications, if required. The design will meet all
applicable Governmental regulations.
3. CONSTRUCTION CONSULTATION
BION will provide on-site staff for the purpose of monitoring construction to
ensure the proper construction of each Bion NMS in accordance with BION'S
design. BION will notify CSF in writing of any failure to follow the design.
BION will prepare, to the best of its ability at it's cost, a certification
report detailing all Quality Control/Quality Assurance matters appropriate to
BION's standards, sampling results and as-built conditions. CSF shall be
responsible for the cost of Quality Control/Quality Assurance analysis
required by regulatory agencies.
4. OPERATIONS SUPPORT
A. BION will provide on-site operational support services during the Initial
Start-up phase and Long-term operation of each Bion NMS, as long as this
agreement is in effect. BION will assist CSF in defining the environmental
standards to which systems will perform and in interfacing with regulatory
inquiries.
B. BION will prepare an O&M Manual for CSF to keep at each facility and refer
to for specific operational information.
C. Following start-up, BION will provide an on-site technical support staff
during the ongoing operation of the systems to insure that the biological
processes are being managed correctly and that the systems are operating as
designed. Each Bion NMS will be visited on a regularly scheduled basis, with
supplemental visits on an as-needed basis. BION will perform biological
evaluations of the systems and the system's components and make necessary
process measurements and adjustments to ensure biodynamic stability.
D. BION will inspect and recommend to CSF any additional maintenance of all
mechanical and electrical components of the system to insure proper
operational control. Hydraulic flow through the system and appropriate
operating levels will be maintained or adjusted as required for appropriate
system functioning.
E. Bio-solids development and deposition will be monitored by BION to assist
CSF in the development of a high quality bio-solids product for harvest.
F. BION will monitor water quality throughout the systems to ensure nutrient
control and reduction performance consistent with disposal and reuse.
G. This Agreement does not cover the specific responsibilities of the PARTIES
regarding bio-solids harvesting, which items shall be specified at a later
date.
ATTACHMENT B
STANDARD TERMS AND CONDITIONS
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1. LICENSE. Bion NMS' is a proprietary process owned and developed by
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Bion Technologies, Inc. ("BION"). It is protected by issued patents and
patent applications on file with the U.S. Patent Office as well as by
confidential information, data and experience regarding the Bion NMS, each and
all of which are considered to be valuable proprietary technology assets to
BION. The term "TECHNOLOGY", as used in this AGREEMENT, is comprised of,
without limitation, the patents held by BION, secret and confidential
information, data and experience regarding the Bion NMS, the specifications
and drawings having been prepared specifically as to the application of BION
proprietary information and know-how regarding the subject matter of this
AGREEMENT, together with all information, communications and documentation
provided by BION or its agents for the purpose of constructing the PROJECT
contemplated by this AGREEMENT. In conjunction with this AGREEMENT, BION
grants a non-exclusive license to the CSF to use the TECHNOLOGY only for the
PROJECT specified ("SITE LICENSE"), under the terms and conditions set forth
in this AGREEMENT for the sole purpose of construction, operation and
maintenance of the Bion NMS. The SITE LICENSE provided by BION to CSF does
not and shall not be construed to create a joint venture or partnership
between BION and CSF. The SITE LICENSE will continue in full force and effect
while the AGREEMENT between the PARTIES is in full force and effect and will
automatically terminate upon termination of such AGREEMENT.
The primary term of the AGREEMENT shall be for the period beginning on
the effective date of this AGREEMENT and shall continue for the term of the
financing (or any extension thereof) secured for the project. Following the
primary term this agreement may be renewed for three successive secondary
terms of five years each as follows: Two years prior to the end of the primary
term or any secondary term, either party may decide that this agreement will
not be renewed for the first (or any subsequent) secondary term. If either
party does not give written notice of non-renewal to the other party on or
before the date two years prior to the end of the term, this agreement will
continue on the same terms for the next term. If the AGREEMENT is not renewed
or is terminated for any reason, the SITE LICENSE will be revoked and each
Bion NMS must be dismantled and permanently taken out of service by CSF so
that it cannot be used, in whole or in part, to produce bio-solids, or any
similarly produced manure by-product, for sale or other use, including use on
CSF's Site.
2. WARRANTY. As to any equipment and/or goods specified, recommended
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or chosen by or with the assistance of BION, CSF will look solely to the
manufacturer/supplier of such equipment or goods respectively for defects in
such equipment or products.
3. LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
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in this AGREEMENT, it is expressly agreed that, provided the system operates
as described in the attached Installation Agreement, as amended, BION will in
no event be liable for any consequential or incidental damages, including lost
profits, relating to or arising out of or in connection with the delivery, use
or performance of the system or for any actual damages in excess of that
portion of the purchase price actually paid by CSF to BION hereunder. CSF
agrees that the system is designed for the specific use described in this
AGREEMENT and is not designed for any significant change in the
characteristics of the waste and wastewater influent.
4. CONFIDENTIALITY. CSF acknowledges and understands the secret and
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confidential nature of BION's confidential proprietary information, data and
experience (and has executed an agreement in which CSF has specifically agreed
to maintain such information, data and experience confidential and has agreed
not to use such information, data and experience in the performance of any
other work for itself or others) and further acknowledges that the design of
the system and the know-how and technical, financial and commercial
information, data and experience provided by BION to build and operate the
Bion NMS, are confidential in nature and proprietary to BION (collectively the
"CONFIDENTIAL INFORMATION"). Without BION's prior written consent, CSF will
not, directly or indirectly, disseminate or make accessible all or any portion
of such CONFIDENTIAL INFORMATION to any third party, except (i) employees,
contractors, and agents of CSF who have agreed to maintain the confidentiality
of all CONFIDENTIAL INFORMATION to the same extent as CSF is bound hereunder,
and (ii) as required by law.
Without approval from BION, CSF will not copy, in whole or in part, the
O&M Manual or any other materials containing CONFIDENTIAL INFORMATION. Upon
termination of this AGREEMENT, CSF will return the O&M Manual and all
CONFIDENTIAL INFORMATION to BION including all approved copies thereof.
5. FORCE MAJEURE. Neither party will be liable to the other and neither
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will be deemed in default hereunder for any failure or delay caused by or
arising out of the following conditions of force majeure: fire, explosion,
war, riot, strike, walk-out, labor controversy, naturally occurring flood,
shortage of water, power, labor, transportation facilities or necessary
materials or supplies, default or failure of carriers, act of God or public
enemy, any law, act or order of any court, board, government or other direct
authority of competent jurisdiction, or any other direct cause (whether or not
of the same character as the foregoing) beyond the reasonable control of such
party.
6. ASSIGNMENTS. No rights or obligations of CSF under this AGREEMENT
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may be assigned without prior written consent of BION except to a successor or
assignee of all rights of CSF in and to the Site who agrees to be bound by and
assume all of CSF's obligations as set forth in this AGREEMENT. This
provision shall also apply to any person or entity required to sign a
confidentiality/non-disclosure agreement pursuant to this AGREEMENT.
7. BINDING EFFECT; GOVERNING LAW. This AGREEMENT will be binding upon
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and inure to the benefit of the PARTIES hereto and their respective successors
and permitted assigns. The laws of the state of Colorado, without regard to
choice of law principles, shall apply to the interpretation and construction
of this AGREEMENT.
8. SEVERABILITY. Each provision of this AGREEMENT will be considered
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severable and if any provision of this AGREEMENT shall be invalid, illegal or
unenforceable, it will not affect or impair the validity, legality or
enforceability of this AGREEMENT itself, or of any other provision hereof.
9. REMEDIES. CSF agrees that the remedy at law for a breach of Section
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1, Section 4, or Section 11 of these Terms and Conditions will be inadequate
and that BION will be entitled to injunctive relief for such a breach, which
relief will be cumulative to other remedies and relief ordinarily available
under such circumstances and will not be construed as an exclusive remedy or
relief.
10. NOTICES. Notices and other communications required by laws,
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ordinances, rules, regulations and orders of public authorities, or permitted
to be given hereunder, will be in writing, and will be deemed given to a party
when delivered personally, or five (5) days after being deposited in the
United States mail with sufficient postage affixed, registered or certified
and return receipt requested, addressed to such party at the address below:
To BION at: Bion Technologies, Inc.
555 17th Street, Suite 3310
Denver, CO 80202
Attn: Duane Stutzman
To CSF at: Crystal Springs Farms, LLC
415 Main Street
Wray, CO 80758
or at any such other address or addresses as may be given by either of them to
the other in writing from time to time.
Bion Technologies, Inc.
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11. INDEMNIFICATION AND HOLD HARMLESS. CSF agrees to indemnify, defend,
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and hold harmless BION and BION's employees and agents from any claim, loss,
damage, cost, expense or liability arising out of or relating to the
negligence, gross negligence or willful misconduct of CSF or CSF's employees
or agents in connection with any services to be performed or provided under
this AGREEMENT. BION agrees to indemnify, defend, and hold harmless CSF and
CSF's employees and agents from any claim, loss, damage, cost, expense or
liability arising out of or relating to the negligence, gross negligence or
willful misconduct of BION or BION'S employees or agents in connection with
any services to be performed or provided under this AGREEMENT.
12. ARBITRATION. Any claim, controversy, dispute or interpretation of
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this Agreement other than those concerning money due to BION from CSF or
matters set forth at sections 1, 4 and 11 of these "Standard Terms and
Conditions", that is not resolved by the Parties within 30 days shall be
submitted to mediation and, if no agreement is reached within 60 days
thereafter, to binding arbitration which shall be the exclusive means of
resolution if, and only if, commenced within the following 30 days.
