-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WOfGKl3gfnPpy2sv07LJCva2Hsw3kCMhpvGfBpvd9J89A+Dlw+N/5VQ6gAdPBccz /n/6zST9RiAW8MRiMsxH4w== 0000949303-98-000032.txt : 19980327 0000949303-98-000032.hdr.sgml : 19980327 ACCESSION NUMBER: 0000949303-98-000032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980223 ITEM INFORMATION: FILED AS OF DATE: 19980326 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BION ENVIRONMENTAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000875729 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 841176672 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-19333 FILM NUMBER: 98573961 BUSINESS ADDRESS: STREET 1: 555 17TH ST STREET 2: STE 3310 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3032940750 FORMER COMPANY: FORMER CONFORMED NAME: RSTS CORP DATE OF NAME CHANGE: 19930328 8-K 1 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: February 23, 1998 -------------------------------------- (Date of earliest event reported) Bion Environmental Technologies, Inc. ---------------------------------------- (Exact Name of Registrant as Specified in its Charter) Colorado 0-19333 84-1176672 - ----------- --------- ----------- (State of (Commission (IRS Employer Incorporation) File No.) Identification No.) 555 17th Street, Suite 3310, Denver, Colorado 80202 ---------------------------------------------------------- (Address and Zip Code of Principal Executive Offices) Registrant's telephone number including area code: (303) 294-0750 ITEM 5. OTHER EVENTS. (A) On March 3, 1998, Bion Environmental Technologies, Inc. (which along with its subsidiaries is referred to as the "Registrant" or the "Company") signed an agreement (hereby referred to as the "Agreement") with Murphy Family Farms, Inc. (hereby referred to as "MFF"), of Rose Hill, North Carolina, to design, install and operate multiple Bion NMS' swine waste treatment systems. The Agreement anticipates that the systems will be installed at MFF sites located in Utah, Kansas, Missouri, Oklahoma and North Carolina. Additionally, the Agreement includes the design, installation and operation of two demonstration NMS systems, one in Iowa and one in North Carolina, which shall include polishing ecoreactors and other components adequate to allow recycling and/or discharge of water from the NMS. Including all projects initially identified under this Agreement, the Company anticipates designing and installing NMS systems for approximately 54,000 sows, 32,000 nursery pigs and 83,000 finishing hogs. Until June 30, 1998 MFF may designate additional swine facilities, subject to the Company's approval, for the design, construction and operation of the Company's NMS systems under the terms of the Agreement. Pursuant to the Agreement, the only revenues that will be derived by the Company in connection with the design, installation and maintenance of the systems will be generated from the anticipated sale of BionSoil' product after the systems are installed. The Agreement also contains numerous other matters related to the projects contemplated in the Agreement. A copy of the Agreement is attached hereto as Exhibit 10.1. (B) Effective February 23, 1998 the Company granted bonuses under its Fiscal Year 1994 Incentive Plan to five of its employees consisting of a total of 25,000 options to purchase shares of the Registrant's common stock at a price of $7.50 per share. The exercise period of said options shall be from date granted until December 31, 1998. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Exhibit 10.1: Agreement between Bion Technologies, Inc. and Murphy Family Farms, Inc. dated March 3, 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: March 23, 1998 By: /s/ Duane Stutzman ---------------------- Duane Stutzman, Chief Financial Officer INDEX TO EXHIBITS Financial Statements and Exhibits. - ------------------------------------ Exhibit 10.1 Agreement between Bion Technologies, Inc. and Murphy Family Farms, Inc. dated March 3, 1998. EX-10.1 2 EXHIBIT 10.1 AGREEMENT IT IS AGREED effective the 3rd day of March, 1998 by, between and among Murphy 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 Four Farm, Phase II, Milford, Utah 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 Hodgeman County), each including facilities adequate to process excess nutrients from not less than 11,000 sows; c) One NMS installation in Barton 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 the 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 the 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 applications 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. MURPHY FAMILY FARMS BION TECHNOLOGIES, INC. by: /s/ J. Turner by: /s/ J. Northrop --------------------- ----------------------- Authorized Officer Authorized Officer EXHIBIT LIST Exhibit A. Squire Farm Contract Exhibit B. Payment due pursuant to AGREEMENT shall be evidenced by one or more non-interest bearing promissory notes in the form set forth below. Exhibit A BION NMS TM INSTALLATION AGREEMENT This agreement (the "AGREEMENT"), made and entered into this 21st day of November, 1997, by and between BION TECHNOLOGIES, INC. a corporation organized under the laws of Colorado and having a place of business at 619C South Third St., Smithfield, NC (hereinafter called "BION") and Murphy Family Farms, having an office at Rose Hill, NC, (hereinafter called "PRODUCER") for the facility known as Squire Sow Farm. 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. WHEREAS, PRODUCER and BION acknowledge and understand the secret and confidential nature of each others confidential proprietary information, data, and experience, and by executing this AGREEMENT Both PRODUCER and BION specifically agree to maintain such information, data and experience confidential and agree not to use such information, data and experience in the performance of any other work for itself or others. NOW, THEREFORE, the parties hereto do mutually agree to conduct their business relationship as follows: 1. ENGAGEMENT OF BION PRODUCER hereby agrees to engage BION and BION hereby agrees to perform the services set forth in 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. 3. PRODUCER'S RESPONSIBILITIES PRODUCER agrees to: provide to BION information, including previous reports, plans, and any other data in the possession or control of the PRODUCER relative to the WORK; give prompt written notice to BION whenever PRODUCER observes or otherwise becomes aware of any development that affects the WORK or timing of BION'S services; designate a representative having authority, to give instructions, receive information, define PRODUCER'S policies, and make decisions with respect to the WORK; bear initial and ongoing expenses (including, but not limited to, field and laboratory tests and surveys) for obtaining any and all approvals and permits from public agencies or authorities; bear the cost of all surveying, soils investigation, engineering services, equipment, materials, and construction required to design, install and operate the Bion NMS including electrical power and equipment maintenance and replacement; physically operate and maintain the Bion NMS and its associated equipment as described in the operations and maintenance manual to be supplied to PRODUCER, and bear all sampling, analysis, and reporting costs for monitoring of the Bion NMS as required by the appropriate regulatory agencies (failure to operate and maintain the Bion NMS and associated equipment may result in bio-solids of lessened or no value and relieve BION of any responsibility for harvesting and disposition of such bio-solids); and, 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, sinks, and any needles, syringes, or any veterinary wastes (cleaners, detergents, and disinfectants approved for use in normal operation of the facility will not be considered toxic or hazardous wastes). 4. PERIOD OF PERFORMANCE The term of this AGREEMENT shall be for the period beginning on the date of execution and shall continue for a period of 15 years. The AGREEMENT may be extended or amended by written agreement between BION and PRODUCER. 5. DESIGN AND CONSTRUCTION SERVICES COMPENSATION 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 facilities' operation, and attempt to incorporate existing structures as practicable. The PRODUCER agrees to pay BION for the services described in ATTACHMENT A, the aggregate sum of $ 30,000 payable as follows: $10,000 for the pre-design scope of services identified in Section 1 of ATTACHMENT A. The fee will be due upon the execution of this AGREEMENT. $10,000 for the design services identified in Section 2 of ATTACHMENT A. The fee will be due upon completion of the pre-design services. $10,000 for the construction consultation services identified in Section 3 of ATTACHMENT A. The fee will be due upon construction start-up. Late payment charges of 1.5% per month, payable to BION, will be due if payments are not received within 30 days from the invoice date. PRODUCER will be responsible for any and all reasonable legal and/or court expenses incurred by BION in BION'S attempt to recover any unpaid amounts in case of failure of the PRODUCER to pay BION for services performed and/or expenses incurred for PRODUCERS account. 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 requested by the PRODUCER, BION shall be compensated for such services as negotiated by BION and the PRODUCER provided BION has written authorization from PRODUCER to provide such services. 6. BION NMS SYSTEM OPERATION COMPENSATION AND PAYMENT The PRODUCER agrees to pay BION, for the Bion NMS start-up and operational services as described in ATTACHMENT A, the sum of $125 per month for the full term of the AGREEMENT. Bio-solids which are produced by the Bion NMS are owned by BION. BION agrees to harvest, process and remove all acceptable bio-solids from the site. Acceptable bio-solids shall include in meaning all bio-solids produced under strict adherence to operational directives. BION reserves the right to reject all bio-solids which are contaminated with human wastes or toxic or hazardous materials, including but not limited to, needles, syringes, or other veterinary wastes or other foreign material. Harvest and disposal of such rejected bio-solids (and the costs related thereto) is the sole responsibility of PRODUCER. This AGREEMENT, including ATTACHMENT A, is subject to the Terms and Conditions (ATTACHMENT B) which are made part hereof and which PRODUCER acknowledges that he has read. IN WITNESS WHEREOF, the parties have caused this agreement to be executed this ______day of ___________, 1997. BION TECHNOLOGIES, INC. PRODUCER: By:____________________________ By:______________________________ Title:__________________________ Title:_____________________________ ATTACHMENT A SCOPE OF SERVICES ------------------- Bion Technologies, Inc. (BION) has developed a patented waste management system, Bion NMS' which treats all aspects of an agricultural waste stream. 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 structures. As used in this ATTACHMENT A, "PRODUCER" shall include PRODUCER plus engineers, surveyors, contractors and other such professionals hired by PRODUCER for this project. The following describes the WORK to be conducted by BION for Murphy Family Farms' Squire Sow Farm Facility, containing 3,500 sows, 1,000 finishing head, and 400 nursery pigs. SECTION 1 PRE-DESIGN SERVICES BION will coordinate the pre-design activities required for the design of the Bion NMS to be constructed at the facility. The pre-design information detailed below must be provided to BION to ensure proper design and construction of the Bion NMS. BION will coordinate with the PRODUCER to obtain the site specific information required to complete the individually designed Bion NMS. The information needed to complete the design includes, but is not necessarily limited to; topographic survey information, geologic investigation, regulatory information, wetlands information, and flood prone areas information. 1.1 TOPOGRAPHIC SURVEY INFORMATION PRODUCER shall provide BION with a topographic survey of the site. 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 information must be readable by AutoCADD. The survey will also locate the existing buildings and other landmarks needed to locate and design the Bion NMS. The surveyors will also provide the initial component location construction stakes. BION has assumed that the surveyors will only conduct one site visit to layout the construction stakes. The surveyors will also conduct one site visit at the end of the construction to survey the as-built location of the Bion NMS. BION shall submit all subcontracted professional land surveying invoices directly to PRODUCER for payment. 1.2 GEOLOGIC INVESTIGATION The geologic investigation will be conducted prior to the design of the Bion NMS. The purpose of the investigation is to evaluate the suitability of the site by examining subsurface soils, bedrock, and groundwater conditions. The investigation will consist of a data search and on-site test pits. Before beginning the soils investigation for a potential structure, the following information will be examined: published soil surveys, groundwater maps, general geology maps, and any previous designs of structures in the same area. Test pits will be used to investigate the proposed Bion NMS component locations. Test pits are helpful in delineating areas where permeable soils are occurring, and where caving may present problems during construction. The test pits will be dug by a backhoe or excavator capable of digging to a depth below the planned bottom of the proposed structure. PRODUCER will excavate one (1) set of test pits for each component of the Bion NMS. BION assumes that only one set of test pits will be required in order to locate the component. Each test pit will be logged for the following information: typical soil name, maximum particle size, estimates of plasticity, color, and moisture, Unified Soil Classification System symbol, location of seeps or groundwater, and depths of collected samples. One (1) sample will be collected from one of the test pits excavated and analyzed for in place permeability, grain size, and Atterburg limits. A determination of the depth to groundwater, or seasonal high water table, and bedrock location will be determined from the data search and the test pits. BION assumes that no compaction of the soils will be necessary to achieve a permeability rate of 10-6 cm/sec or less. BION also assumes that no groundwater monitoring wells will be necessary to complete the design, construction and operation of the Bion NMS. BION shall submit all subcontracted geologic investigation invoices directly to PRODUCER for payment. 1.3 REGULATORY INFORMATION Prior to BION designing the system, PRODUCER will investigate the regulations affecting the physical location 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 PRODUCER and regulatory agencies. 1.4 WETLANDS INFORMATION During the early planning stages, PRODUCER will determine the proximity of the prospective Bion NMS site to wetlands. BION will consult, as needed, with PRODUCER and the State regulatory authorities concerning freshwater wetland regulations that may be applicable. In addition, PRODUCER may be required to consult with USDA's Fish and Wildlife Service and the U.S. Army Corps of Engineers for wetlands under their jurisdiction. 1.5 FLOOD PRONE AREAS PRODUCER will check with local zoning 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 material to be washed out. SECTION 2 PRELIMINARY DESIGN SERVICES BION will coordinate the site specific Bion NMS design. BION will prepare the initial System layout and specifications necessary for the PRODUCER to prepare the detailed construction drawings and final specifications required for construction of the Bion NMS on the PRODUCER'S site. BION will be available continuously during this engineering phase for consultation. The final design drawings will be completed with due regard for the comments received from the PRODUCER during review of the preliminary design drawings. BION will supply the final verification of completeness of the drawings, with the PRODUCER's mutual consent. PRODUCER will provide BION with three (3) copies of the final design drawings and specifications. BION will prepare an engineering design report, if required, detailing all calculations and design criteria. BION will also prepare a permit application, if required, for PRODUCER. SECTION 3 CONSTRUCTION CONSULTATION SERVICES BION will provide an on-site construction reviewer for the purpose of ensuring the proper construction of the Bion NMS. BION will provide a reviewer for a maximum of eight (8) hours per week during the active construction of the Bion NMS. BION will notify PRODUCER in writing of any major problems associated with the Bion NMS construction. If required, BION will prepare a certification report detailing all QC/QA sampling results and as-built conditions. SECTION 4 OPERATIONAL SERVICES BION will provide on-site consultation services during the Initial Start-up and Long-term operation of the Bion NMS. BION will prepare an operations and maintenance manual for the PRODUCER to keep at his facility to refer to for specific operational information. BION will provide an on-site start-up technician for a total of eight (8) hours per week for the first four (4) weeks of system operation. BION may provide additional support at its discretion, if needed. BION will provide an on-site operational technician during the long-term operation of the system. BION will provide a technician for up to a total of eight (8) hours per month during the normal operation of the Bion NMS. BION will provide PRODUCER with copies of the field visit reports. The field visit report may indicate recommended actions to be taken by the PRODUCER. ATTACHMENT B STANDARD TERMS AND CONDITIONS -------------------------------- 1. License Bion NMS' is a proprietary process owned and developed by ------- 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 PRODUCER to use the Technology only on the Site 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 PRODUCER does not and shall not be construed to create a joint venture or partnership between BION and PRODUCER. 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 term of this AGREEMENT is for 15 years and is renewable thereafter on the same terms. If the AGREEMENT is not renewed or is terminated for any reason, the Site License will be revoked and the Bion NMS must be dismantled and permanently taken out of service by PRODUCER so that it cannot be used, in whole or in part, to produce bio-converted solids, or any similarly produced manure byproduct, for sale or other use, including use on the PRODUCER'S Site. 2. Warranty -------- As to any equipment and goods specified, recommended or chosen by or with the assistance of BION, PRODUCER 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 in this AGREEMENT, it is expressly agreed that, provided the Bion NMS operates as described in the attached proposal, as amended, BION will in no event be liable for any consequential, incidental or special damages, including lost profits, relating to the use or performance of the Bion NMS or for any actual damages in excess of that portion of the purchase price actually paid by PRODUCER to BION hereunder. PRODUCER agrees that the system is designed for the specific use described in the proposal and is not designed for any significant change in the characteristics of the waste and wastewater influent. PRODUCER further agrees that if the Bion NMS performs according to the proposal, as amended after the completion of one year of Bion NMS operation or an agreed upon testing period, BION has no further liability for Bion NMS performance. 4. Confidentiality --------------- PRODUCER 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, including design, construction drawings, specifications, the operations and maintenance manual (the "Manual"), and all related information are confidential in nature and proprietary to BION (collectively "Confidential Information"). Without BION'S prior written consent, PRODUCER 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 PRODUCER who have agreed to maintain the confidentiality of all Confidential Information to the same extent as PRODUCER is bound hereunder, and (ii) as required by law. Without approval from BION, PRODUCER will not copy, in whole or in part, the Manual or any other materials containing Confidential Information. Upon termination of the AGREEMENT, PRODUCER will return the Manual and all other records, reports, letters, memoranda, drawings, or other tangible media of expression containing or embodying Confidential Information to BION including all approved copies thereof. 5. Force Majeure Neither party will be liable to the other and -------------- neither 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 or 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 PRODUCER under this ----------- AGREEMENT may be assigned without prior written consent of BION except to a successor or assignee of all rights of the PRODUCER in and to the site who agrees to be bound by and assume all of the PRODUCER'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 ----------------------------- and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The laws of the state where the Site is located, 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 ------------ 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 PRODUCER agrees that the remedy at law for a breach of -------- section 1 or Section 4 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 without arbitration. 10. Notices Notices and other communications required by laws, ------- 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. _______________________________________ _______________________________________ Attn:__________________________________ To PRODUCER at:_______________________________________ _______________________________________ _______________________________________ Attn:__________________________________ 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. 11. Indemnification PRODUCER agrees to indemnify, defend, 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 gross negligence or willful misconduct of PRODUCER or PRODUCER'S employees or agents in connection with any services to be performed or provided by PRODUCER under this AGREEMENT. PRODUCER agrees that the services provided by BION is specific consideration for this provision. Exhibit B SAMPLE NON RECOURSE PROMISSORY NOTE Per Agreement March 3, 1998 Rose Hill, NC Murphy Farms, Inc. ("Maker") promises to pay to the order of Bion Technologies, Inc. ("Holder") at ____________________________, Denver, CO or at such other place as may be designated in writing by Holder or its assigns, the principal sum due, without interest thereon, until fully paid. Such principal shall be payable as follows: Sums due under this note arise under the fee related paragraph number three (3) of the Agreement dated the ______ day of ___________, 1998 between Maker and Holder and are to be paid solely from the sums due under the royalty related paragraph number five (5). If no sums become or are due Maker from Holder under the royalty related paragraph number five (5) in the aforesaid Agreement, then no sums will be due under this note. This Note shall be non-recourse to the Maker. The Holder, for itself and its representative, successors, endorsees and assigns, agrees, by acceptance hereof, that the Maker shall not be liable on this Note except as payments are received by Maker under the Agreement as described above and that it shall not seek to enforce any liability or obligation of the Maker to perform the obligations contained in this Note by any action or proceeding wherein a money judgment shall be sought against the Maker, and that any judgment or decree shall be enforceable against the Maker only to the extent of, and the Holder shall look for payment hereof solely to, the Maker's interest in the royalties due under the Agreement described above. Under no circumstances shall any director, officer, employee or agent of the Maker be personally liable for any obligation of the Maker arising pursuant to the provisions of this Note. Except as provided in the next succeeding sentence, this Note is not assignable by either the Maker or the Holder without the written consent of the other. The Holder may assign its rights hereunder to a wholly-owned subsidiary of the Holder or, with the prior consent of the Maker, which consent shall not be unreasonably withheld, to the shareholders of the Holder. This Note and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the state of North Carolina without regard to conflict of law principles. ___________________________________ Murphy Farms, Inc. ACCEPTED AND AGREED: ___________________________________ Bion Technologies, Inc. Date: -----END PRIVACY-ENHANCED MESSAGE-----