Document:

Exhibit 10.1
-----------
                                     GRANTED

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                          IN AND FOR NEW CASTLE COUNTY

STRATEGIC  ASSET  MANAGEMENT,
INC.,  derivatively  and  on  behalf  of  N-VIRO
INTERNATIONAL  CORPORATION,  a                         C.A.  No.:  20360
Delaware  Corporation,

Plaintiffs,

v.

J.  PATRICK  NICHOLSON,  MICHAEL
NICHOLSON,  TERRY  J.  LOGAN,  BOBBY
B. CARROLL,  PHILLIP  LEVIN,  DANIEL  J.
HASLINGER  and  B.K.  WESLEY
COPELAND,

Defendants,

and

N-VIRO  INTERNATIONAL
CORPORATION,  a  Delaware  Corporation,

Nominal  Defendant.

                                SCHEDULING ORDER
                                ----------------

     The  parties  have  informed  the  Court  that they have reached a proposed
settlement  of  this matter.  The parties have submitted to the Court a proposed
Notice of Settlement to Shareholders ("the Notice"), which describes this matter
and the proposed settlement.  The Court finds that the Notice gives shareholders
fair  notice  of this matter and the proposed terms of settlement, and the Court
has  signed  the  Notice.  Accordingly,  it  is agreed between the parties that:

     On  October  14,  2004 at 10:00 a.m., the Court shall hold a hearing on the
proposed  settlement,  at  which  time all objections to the proposed settlement
will  be  considered.  Within  seven days of the execution of this Order, N-Viro
shall  mail  the  Notice  to  its  shareholders  as  of  August  25,  2004.

<TABLE>
<CAPTION>

<S>                           <C>

SNYDER & ASSOCIATES, P.A.. .  SAUL EWING LLP

/s/ Bayard J. Snyder . . . .  /s/ Michael F. Bonkowski
Bayard J. Snyder, Esquire. .  Michael F. Bonkowski, Esquire
DE#175 . . . . . . . . . . .  DE #2219
300 Delaware Ave., Ste. 1014  222 Delaware Ave., Ste. 1200
P.O. Box 90. . . . . . . . .  P.O. Box 1266
Wilmington, DE 19899 . . . .  Wilmington, DE 19899
(302)-657-8300                (302)-421-6863
Attorney for Plaintiff . . .  Attorney for All Defendants
----------------------------  -----------------------------
</TABLE>

SO  ORDERED  THIS  _____  day  of  August  2004.

The  Honorable  John  W.  Noble
Vice  Chancellor

Court:     DE  Court  of  Chancery

Judge:     John  Noble

LexisNexis  File  &  Serve  Reviewed  Filing  ID:  4097692

Date:     8/25/2004

Case  Number:  20360

Case  Name:  Strategic  Asset  Management Inc et al vs N Viro International Corp

/s/  Judge  John  Noble

<PAGE>Exhibit 10.2
                                                                    ------------
                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                          IN AND FOR NEW CASTLE COUNTY

STRATEGIC  ASSET  MANAGEMENT,
INC.,  derivatively  and  on  behalf  of  N-VIRO
INTERNATIONAL  CORPORATION,  a                  :     C.A.  No.:  20360
Delaware  Corporation,

Plaintiffs,

v.

J. PATRICK  NICHOLSON,  MICHAEL
NICHOLSON,  TERRY  J.  LOGAN,  BOBBY
B. CARROLL,  PHILLIP  LEVIN,  DANIEL
J.  HASLINGER,  B.K.  WESLEY
COPELAND,

Defendants,

     and

N-VIRO  INTERNATIONAL
CORPORATION,  a  Delaware  Corporation,

Nominal  Defendant.

                          NOTICE OF SETTLEMENT HEARING
                          ----------------------------

To  the  Shareholders of N-Viro International Corporation as of August 25, 2004:

                                  Introduction
                                  ------------

     You are receiving this legal notice because you are a shareholder of N-Viro
International  Corporation  ("N-Viro").  N-Viro and certain of its directors (at
the  time of the suit) were sued by Strategic Asset Management, Inc. ("SAMI") in
the  Delaware State Chancery Court (the "Court") for New Castle County (Case No.
20360) (the "Lawsuit").  SAMI brought the Lawsuit as what is called a derivative
lawsuit,  which we will describe further below. The directors it sued were Bobby
Carroll,  B.K. Wesley Copeland, Daniel Haslinger, Phillip Levin, Terry Logan, J.
Patrick  Nicholson and Michael Nicholson. (We shall refer below to the directors
other  than  J.  Patrick  Nicholson  as  the  "Settling  Directors.")

     N-Viro  seeks  to  settle  the  Lawsuit.  Because  it is a derivative suit,
shareholders  are  entitled to object to the settlement terms if they wish to do
so.  The  judge  of  the  Lawsuit  (who is referred to as a Vice-Chancellor) has
ordered that this notice be sent to you to explain the proposed settlement terms
(the  "Settlement  Terms")  and your rights to object to the Settlement Terms if
you  wish  to  do  so.

     Last  November,  N-Viro  sent  you  a summary (the "Summary") of a proposed
settlement  agreement  (the "Initial Proposed Settlement") that was submitted to
the  Vice-Chancellor  for review. The Summary also reviewed in detail the events
leading  up  to  the  Lawsuit  and  the Lawsuit's allegations. If you would like
another copy of the Summary, please contact James McHugh at N-Viro (419-535-6374
or  jmchugh@nviro.com)  to  request  one.
    -----------------

     The  Vice-Chancellor  indicated  that  he  would  not  approve  the Initial
Proposed Settlement for specific reasons. The parties then renegotiated based on
the  Vice  Chancellor's reasons, and reached a new proposed settlement agreement
(the "Settlement Agreement"). This document describes the renegotiated agreement
being  submitted  for  the  Vice-Chancellor's  approval.

     On October 14, 2004 at 10:00 a.m., at the New Castle County Courthouse, 500
North  King  Street, Wilmington, Delaware 19801, the Vice-Chancellor will hold a
hearing  (the  "Hearing")  to  decide  whether  he should approve the Settlement
Agreement  as  fair, reasonable and adequate, and to enter judgment based on the
Settlement  Terms.

     This  Notice  is  not  based  in  any way on the Vice-Chancellor's opinions
related  to  the Lawsuit.  The parties prepared this notice and it should not be
understood  in  any  way  as reflecting the Vice-Chancellor's opinions as to the
merits  of  the  claims  or  defenses  of  any  party  to  the  Lawsuit.

                          Proposed Settlement Agreement
                          -----------------------------

     A  copy  of  the Settlement Agreement is available from the Court's Lawsuit
file.  We  summarize  its  major  points  in  this  section.

     N-Viro  shall  reimburse  SAMI its direct Lawsuit attorneys fees and costs,
which  it calculates as $164,000.  In exchange for the payment, all parties will
execute  mutual  releases  and SAMI will dismiss the Lawsuit with prejudice. The
Vice-Chancellor  must  approve  the  Settlement  Agreement as a condition to its
becoming  effective.

               The Parties' Positions on the Settlement Agreement
               --------------------------------------------------

     SAMI  believes  it  achieved its desired result, with direct benefit to all
shareholders,  by N-Viro's terminating its original consulting agreement with J.
Patrick  Nicholson;  J. Patrick Nicholson's releasing all claims under all prior
employment  agreements; J. Patrick Nicholson's releasing all claims to an annual
pension;  N-Viro's  securing  reimbursements  from  J.  Patrick  Nicholson;  and
entering  into  a  new,  limited consulting agreement with J. Patrick Nicholson.
SAMI  believes it is entitled to reimbursement of its actual attorney's fees and
costs  for  the  benefits  that N-Viro recognized as a result of SAMI's efforts.

     N-Viro  and  the Settling Directors believe that SAMI did not need to bring
the  Lawsuit, and that the Board had appointed an Independent Committee that had
been  proceeding  properly. They deny that they breached any fiduciary duties or
that  they  acted  improperly  in  any  way.  Nonetheless, they believe it is in
N-Viro's  best  interests  to settle the matter under the Settlement Agreement's
terms  to  avoid  the  expense  of further litigation and to resolve the dispute
through  mutual  releases.

     J.  Patrick Nicholson, a Defendant and Non-Settling Director, believes that
SAMI  brought  this  case  to  advance  its own interests as opposed to N-Viro's
interests.  He  urges the Court to disapprove the proposed settlement and not to
approve  N-Viro's  paying  any  of  SAMI's  costs.

                                   Objections
                                   ----------

     Any  N-Viro  shareholder who objects to the Settlement Agreement may appear
in  person  or  by  counsel  at the Hearing and present any relevant evidence or
argument.  If  you want to be heard, you must, no later than ten days before the
Hearing,  file  with the Register in Chancery, New Castle County Courthouse, 500
North  King Street, Wilmington, Delaware 19801 (i) a notice of your intention to
appear  the  Hearing;  (ii)  a  statement  of  your objections to the Settlement
Agreement;  and  (iii)  an  explanation of the reasons for your objections along
with  any  documents that you want the Vice-Chancellor to consider.  At the same
time  you file these documents with the Register in Chancery, you must also mail
them to the following attorneys, each of whom represents parties to the Lawsuit,
and  to  J.  Patrick  Nicholson:

Peter  R.  Silverman,  Esq.
Shumaker,  Loop  &  Kendrick,  LLP
1000  Jackson
Toledo,  Ohio  43624-1573
Counsel  for  N-Viro  International  Corp.
and  the  Settling  Directors

Richard  C.  Fox,  Esq.
Fox  Law  Offices,  P.A.
P.O.  Box  1097
Pecos,  New  Mexico  87552
Counsel  for  Strategic  Asset  Management,  Inc.

J.  Patrick  Nicholson.
2025  Richmond  Road
Toledo,  OH  43607

     Unless the Vice-Chancellor directs otherwise, no one may object to approval
of  the  Settlement  Agreement  nor  may  appear at the Hearing in any capacity,
unless  they file their notice of intention to appear as described above. If you
fail  to  file  such a notice, you will be deemed to have waived your objections
and  you  may  not  raise  them  in  this  or  any  other  matter.

                             Effect of Non-Approval
                             ----------------------

     If  the  Vice-Chancellor  does not approve the Settlement Agreement, or the
Vice-Chancellor  approves the Settlement Agreement and such approval is reversed
or  modified  on  appeal, the Settlement Agreement shall be treated as if it had
not  been  made  and  had  not  been  submitted to the Court.  The Lawsuit would
continue  to  proceed  as  if  the  parties  had not entered into the Settlement
Agreement  and  submitted  it  to  the  Court.

                      Request to Brokers and Other Nominees
                      -------------------------------------

     Brokerage firms, banks and other persons or entities who are record holders
of  shares  of N-Viro common stock, but who do not hold that stock as beneficial
owners, should send this notice promptly to the beneficial holders.  If you need
additional  copies  of  this  notice,  you  may  send  exact duplicate copies to
beneficial  holders.

                          This Notice is only a Summary
                          ----------------------------

     The  descriptions in this notice have been a summary.  You may seek further
information  by  reviewing  the Complaint, the Initial Proposed Agreement or the
Settlement Agreement, filed with the Register in Chancery, which you may examine
during  regular  business  hours at the offices of the Register in Chancery, New
Castle  County  Courthouse,  500  North  King Street, Wilmington, Delaware 19801

BY  ORDER  OF  THE  COURT:

 /s/  Diane Dempski
-------------------
Register  in  Chancery

August  __  2004

<PAGE>

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