Exhibit 10.17
MARKET DEVELOPMENT AGREEMENT
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THIS MARKETING DEVELOPMENT AGREEMENT ("Agreement") is made and entered into
by and between, on the one hand, Norit America Inc., having its principal place
of business at 0000 Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxx X - 000, Xxxxxxx, Xxxxxxx
00000 (hereinafter referred to as "Norit"), and Earth Sciences, Inc. and its
wholly-owned subsidiary, ADA Environmental Solutions LLC, having their principal
place of business at 0000 Xxxxx Xxxx Xxx, X-0, Xxxxxxxxx, Xxxxxxxx 00000
(hereinafter jointly referred to as "ADA"), on the other hand.
WHEREAS, a long-term commitment, significant expense and risk are associated
with the investments required to develop an adsorbent supply capability in
anticipation of future EPA regulations for the removal of mercury from coal
fired utility stacks and,
WHEREAS, Norit and ADA are and have been collaborating to develop solutions for
the reduction of mercury emissions and,
WHEREAS, ADA and Norit desire to form a business relationship for a potential
market to mitigate their independent investment risks and increase the
probability of an economic return on these investments.
NOW, THEREFORE, in consideration of the premises, the mutual promises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Market and Estimated Time Periods:
The target market is defined as North American coal-fired utilities (non wet
scrubber portion), investing in adsorbent technology and equipment for mercury
removal in accordance with the anticipated year 2007 EPA regulations ("NACFUM").
Norit and ADA acknowledge the following as being the defined and estimated
applicable periods for purposes of this Agreement:
o Test Period: 2001-03 (est.)
o Regulatory Review Period: 2004 (est.)
o Early Adopter Period: 2004-2007 (est.)
o Commercial Period: 2007-2015
2. ADA Responsibilities:
ADA shall be responsible for:
o Adsorbent identification, technical and economic ranking and
demonstration testing.
o Market development and sales coverage.
o System and equipment contract negotiations; project execution and
management; installation oversight.
3. Norit Responsibilities:
Norit shall manufacture and/or supply activated carbon or other adsorbents
pursuant to Norit supply agreements with ADA or directly with the NACFUM
utilities and design contracts and equipment supply (when economic) for powder
activated carbon dosing systems.
4. Mutual Commitment and Exclusivity:
Subject to the performance requirements and other limitations below, ADA will
exclusively execute all contract designs and projects with Norit-supplied
activated carbons or adsorbent products. ADA will rely exclusively on Norit's
designs for activated carbon/adsorbent dosing systems in the Early Adopter
Period. In the Commercial Period (2007-2015), ADA shall exclusively represent
Norit for activated carbons or other adsorbents as to NACFUM. In the Early
Adopter Period and Commercial Period, ADA will be the exclusive sales
representative of Norit for activated Carbon sales to NACFUM.
5. Performance Requirements
For ADA to maintain exclusivity, Norit's activated carbon or other adsorbent
products, must represent at least 50% of the unit (lbs.) sales to NACFUM early
adopters in each year of the Early Adopter Period. In the Commercial Period,
specific annual minimum sales targets will be mutually established for ADA to
maintain its exclusivity.
For Norit to maintain exclusivity, Norit must supply activated carbons, or its
other adsorbents, at prices and in quantities sufficient to meet the demands of
NACFUM early adopters. To maintain exclusivity in the Commercial Period, Norit
must supply activated carbon, or its other adsorbents, at prices and in
quantities sufficient to allow ADA to meet its minimum exclusivity targets.
Upon written notice of performance requirements default under Paragraph 5, and a
failure to cure by Norit, within ninety (90) days, the exclusivity protection
favoring Norit shall be terminated and ADA may specify other non-Norit activated
carbons or adsorbents.
Upon written notice of performance requirements default under Paragraph 5, and a
failure to cure by ADA, within ninety (90) days, the exclusivity protection
favoring ADA shall be terminated and Norit shall not be limited as to its supply
to NACFUM.
However, the above default provisions relate to exclusivity only and shall not
otherwise affect the parties operating under this Agreement on a non-exclusive
basis.
6. Right of First Refusal:
If during the Test Period, or at any time prior to a contract renewal or
renegotiation (as described below in Paragraph 7), ADA identifies, in good
faith, a New Adsorbent/Technology (as defined below), ADA shall promptly provide
Norit with written notice as to the details of any such New Adsorbent/Technology
and Norit shall have a Right of First Refusal to commit to supply the New
Adsorbent/Technology, or equivalent. Norit shall have 180 days from ADA's
written notice to exercise its Right of First Refusal by giving written notice
to ADA and by entering into a new marketing and supply agreement with ADA. In
the event that either ADA or Norit wishes to proceed, but Norit and ADA are
unable in good faith to negotiate a new marketing and supply agreement, then
either ADA or Norit, or both of them, may terminate this Agreement without any
liability or obligation to the other party.
"New Adsorbent/Technology", for purposes of this Paragraph 6 and ADA's
identification and this Right of First Refusal, shall mean: a) a new adsorbent
or alternative mercury removal method or technology with performance superior to
any of Norit's activated carbon products (which are available in commercial
quantities), and b) a product or technology included in the EPA regulatory
proposal, and c) an article of commerce which can be supplied at the time of
ADA's notice in comparable quantities to Norit's activated carbon products.
7. Contract Renewal/Termination:
In light of the investments required to serve the market, ADA and Norit agree to
review and either renew or renegotiate this Agreement in good faith, and subject
to legal review, during the Regulatory Review Period (2004 est.). Either party
may, at its option, terminate this Agreement, without liability, penalty or
limitations on activities in the event that, for whatever reason, no agreement
renewal or renegotiated Agreement is concluded in good faith. Termination of
this Agreement shall also be allowed as set forth in the Terms and Conditions
attached.
8. Commissions/Payment:
For Norit activated carbon or adsorbent sales to NACFUM, Norit will pay ADA a
commission equal to 10% of the net per lb. sales price (FOB Norit's factory).
Norit will also pay ADA a commission equal to 5% of net sales (FOB Norit
factory) for dosing designs or equipment that Norit supplies directly, with ADA
consent, to NACFUM. No Commission will be paid on dosing designs or equipment
sold to ADA. Where there has been a performance default under paragraph 5 by
ADA, ADA will only be paid commission on sales of adsorbents, dosing designs and
equipment, which originate through the efforts of ADA. All commissions are
payable at the time of Norit's receipt of payment.
ADA and Norit agree to renegotiate in good faith the commission schedule, up or
down, as market conditions, new product introductions or other changes or
conditions increase or decrease the NACFUM profit opportunity.
9. Complete Agreement:
This Agreement, including the Terms and Conditions of Market Development
Agreement and the mutual Confidentiality and Non-Disclosure Agreement both
attached, contains the entire agreement between the parties with respect to the
subject matter hereof. This Agreement has first been executed by ADA and then
accepted and finally executed by Norit at its offices in Atlanta, Georgia.
"Norit" "ADA"
Norit Americas Inc. Earth Sciences, Inc.
By: Xxxxx X. Xxxxx By: /s/ Xxxx X. XxXxxxxxx
Title: Executive Vice President Title: President
Date: 7/3/01 Date: 6/29/01
ADA Environmental Solutions, LLC
By: /s/ Xxxxxxx X. Xxxxxx
Title:President
Date: 6/29/01
