EXHIBIT 10.18
TOXECON SORBENT SALES REPAYMENT AGREEMENT
This TOXECON SORBENT SALES REPAYMENT AGREEMENT ("Repayment Agreement")
is made and entered into by and between Norit America Inc., having its
principal place of business at 0000 X. Xxxxxxxxxx Xxx., Xxxxxxxx, Xxxxx
00000 (hereinafter referred to as "Norit"), and ADA-ES, Inc. and ADA
Environmental Solutions, LLC, its wholly-owned subsidiary, having their
principal place of business at 0000 Xxxxx Xxxx Xxx, Xxxx X, Xxxxxxxxx,
Xxxxxxxx 00000 (hereinafter individually and/or collectively referred
to as "ADA").
WHEREAS, Norit and ADA have entered into a Market Development Agreement
(the "MDA") and pursuant to the MDA have been collaborating to develop
the market for the use of activated carbon for the reduction of mercury
emissions by North American coal-fired utilities;
WHEREAS, the MDA, according to its terms, provides for Norit to pay a
commission to ADA on certain sales of Norit's activated carbon (AC),
other adsorbents, and equipment;
WHEREAS, ADA has the opportunity to further develop its mercury control
technology and test Norit's AC and other adsorbents in a United States
Department of Energy ("DOE") supported clean coal technology
demonstration project at the We Energies Presque Isle facility under
DOE's Clean Coal Power Initiative (the "CCPI Project") if ADA accepts a
repayment obligation for a portion of the CCPI Project costs to be paid
by DOE;
WHEREAS, ADA and Norit jointly and individually acknowledge they shall
receive substantial benefit from participation in the CCPI Project; and
WHEREAS, Norit is desirous of ADA'S participation in the CCPI Project
and is willing to accept a repayment obligation to DOE on certain sales
of it's AC and Novel Sorbents (as that term is defined herein and in
the DOE Repayment Agreement with ADA) not covered by the MDA, or where
the MDA is terminated.
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. Definitions
"DOE Repayment Agreement" means the "Clean Coal Power Initiative
Repayment Agreement Between the U.S. Department of Energy And ADAES,"
attached hereto as Exhibit A.
"AC" has the same meaning set forth in Article II of the DOE Repayment
Agreement and shall mean AC sold by Norit to coal-fired electric
utilities in North America using the Toxecon Demonstration Technology.
"Novel Sorbent" has the meaning set forth in Article II of the DOE
Repayment Agreement and shall mean Novel Sorbents sold by Norit to
coal-fired electric utilities in North America using the Toxecon
Demonstration Technology.
2. NORIT Repayment Obligation To DOE
In the event ADA loses it exclusive right to act as NORIT's North
America agent for sales of AC and Novel Sorbents under the MDA, or if
the MDA is terminated, and NORIT sells AC and Novel Sorbents for which
ADA otherwise would have been entitled to a commission under the MDA
for use in conjunction with the Demonstration Technology (as defined in
the DOE Repayment Agreement), NORIT shall pay to DOE one and one-half
percent of the net sales revenue (i.e. gross sales less normal deducts
such as freight, packaging, taxes, returns/sales adjustments, normal
discounts) as and when received by NORIT from such sales.
Payments made by NORIT pursuant to paragraph 2 shall be credited toward
satisfaction of ADA's repayment obligation for AC and Novel Sorbent
under the DOE Repayment Agreement. Once the repayment ceiling for AC
and Novel Sorbent, established in Article V (A) of the DOE Repayment
Agreement, has been reached, or the events or expiration parameters in
Article III have been met, NORIT is not obligated to make further
payments under this Agreement. Norit's repayment obligation hereunder
shall in no event be accelerated and shall only apply to its net sales
revenue from AC and Novel Sorbents, not equipment, and shall in no
event exceed $15 million. Norit's repayment obligation hereunder shall
be reduced proportionally, if DOE's expected funding of $24,768,313 for
the program is not met. Norit's repayment obligation is subject to
imposition of of similar repayment requirements on all participating AC
and Novel Sorbent suppliers in the CCPI Demonstration.
NORIT payments to DOE shall be transmitted through ADA as long as ADA
continues as a going concern. Payments due DOE shall be transmitted to
ADA within 45 days after each one-year period following the effective
date of this Repayment Agreement. Should ADA ceases to exist as a
going concern, NORIT shall make payments directly to DOE in accordance
with the Article VI of the DOE Repayment Agreement.
In the event that NORIT AC or Novel Sorbents are not tested as part of
the CCPI Project, NORIT shall have no repayment obligation to DOE for
the sale of any such AC or Novel Sorbents.
3. Reporting and Record Retention
NORIT shall provide ADA sufficient information to allow ADA to comply
with ADA's reporting requirements prescribed in Article VII (A) of the
DOE Repayment Agreement. Within 45 days after the end of each one
period, upon the written request by ADA, NORIT shall submit a written
report to ADA which, for the one year period just elapsed, provides
the applicable data described below:
(1) The total dollar amount of repayment accruing to DOE;
(2) Transaction entries during the one-year period from which the
repayment obligation accrued;
(3) The total amount paid to DOE for all years.
Should XXX xxxxx to exist as a going concern, NORIT shall submit
reports directly to DOE. ADA shall report to Norit in writing all
withdrawals, defaults or terminations under the DOE Repayment
Agreement.
NORIT shall be subject to the record retention and access requirements
defined in Articles VII (B)-(F) of the DOE Repayment Agreement.
4. Notices
All pay notices and other communications to a party hereunder shall be
in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to such
party (and will be deemed given on the date on which the notice is
received by such party) at the address for such party set forth below
(or at such other address for the party as the party shall, from time
to time, specify by like notice to the other parties):
If to Norit at:
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: President
If to ADA at:
0000 XxxxxXxxx Xxx, X-0
Xxxxxxxxx, XX 00000
Fax - 000-000-0000
Attention: President
If to DOE at:
U.S. Department of Energy
National Energy Technology Laboratory
X.X. Xxx 00000
Xxxxxxxxxx XX 00000
Attn: Chief Counsel
5. Third Party Beneficiary
NORIT agrees that DOE shall have the right of a third party beneficiary
to enforce the provisions of this agreement against NORIT in a court of
competent jurisdiction.
6. Effective Date
This Agreement is effective upon the effective date of the DOE
Repayment Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Repayment Agreement as of the day and year shown below.
Norit Americas Inc. ADA-ES, Inc. and ADA
Environmental Solutions LLC
By: /s/ Maarten Knuttel By: /s/ Xxxx X. McKinnnies
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Name:_Maarten Knuttel Name: Xxxx X. XxXxxxxxx
Title: Director Title: CFO
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Date: February 11, 2004 Date: February 18, 2004
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