Exhibit 10.3
MARKET DEVELOPMENT AGREEMENT
----------------------------
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 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇ - ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (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 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(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.
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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
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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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President Title: President
Date: July 3, 2001 Date: June 29, 2001
------------------------ ------------------------------
ADA Environmental Solutions, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Date: June 29, 2001
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