Exhibit 10.45

EXECUTION VERSION

Settlement Agreement Regarding

ADA-ES’ Indemnity Obligations

This Settlement Agreement Regarding ADA-ES’ Indemnity Obligations (this
“Agreement”) is dated as of November 28, 2011 and is made by and among the
Parties (as defined below). Unless otherwise noted, capitalized terms used, but
not defined herein have the meanings ascribed to such terms in the Amended and
Restated Limited Liability Company Agreement of ACS (the “ACS LLC Agreement”).

 

Parties

   ADA:   

•      ADA-ES, Inc., a Colorado Corporation and ADA Environmental Solutions,
LLC, a Colorado limited liability company (collectively, and including their
respective successors and assigns, “ADA”).

   ECP Defendants:   

•      Energy Capital Partners, LLC, a Delaware limited liability company;

  

•      Energy Capital Partners I, LP, a Delaware limited partnership;

  

•      Energy Capital Partners I-A, LP, a Delaware limited partnership;

  

•      Energy Capital Partners I-B IP, LP, a Delaware limited partnership; and

  

•      Energy Capital Partners I (Crowfoot IP), LP, a Delaware limited
partnership (collectively, and including their respective successors and
assigns, the “ECP Defendants”).

   AC Venture Defendants:   

•      ADA Carbon Solutions, LLC (f/k/a Crowfoot Development, LLC), a Delaware
limited liability company (“ACS”);

  

•      ADA Carbon Solutions (Red River), LLC (f/k/a Red River Environmental
Products, LLC), a Delaware limited liability company (“RREP”);

  

•      Morton Environmental Products, LLC, a Delaware limited liability company;

  

•      Underwood Environmental Products, LLC, a Delaware limited liability
company;

  

•      Crowfoot Supply Company, LLC, a Delaware limited liability company
(“Crowfoot Supply”); and

  

•      Five Forks Mining, LLC, a Delaware limited liability company
(collectively, and including their respective successors and assigns, the “AC
Venture Defendants”).

   ADA, the ECP Defendants and the AC Venture Defendants may be individually
referred to herein as a “Party” and collectively referred to herein as the
“Parties.”

 

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Representations and

Warranties

   Each Party represents and warrants to the other Parties that as of the date
of this Agreement:   

•      it has the power and authority to enter into this Agreement and to
perform its obligations hereunder, and that the persons executing this Agreement
on behalf of the Party are authorized to do so;

 

•      the execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly authorized by all necessary actions of the
Party;

 

•      this Agreement has been duly and validly executed and delivered by it and
is a legal, valid and binding obligation of it, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy laws and other laws affecting creditors’ rights generally, and
general principles of equity that restrict the availability of equitable
remedies; and

 

•      the execution and delivery of this Agreement and the performance by the
Party of any of its obligations hereunder do not and will not:

 

•      Conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the incorporation or organization documents of the
Party;

 

•      Conflict with or result in a violation or breach of any term or provision
of any statute, decree, order, rule, or regulation of any court or governmental
agency or body applicable to the Party or any of its assets and properties; and

 

•      (1) Conflict with or result in a material violation or breach of, (2)
constitute (with or without notice or lapse of time or both) a material default
or result in the imposition of any fees or penalties under, (3) give rise to any
right of termination, amendment, acceleration or cancellation of, (4) require
the Party to obtain any material consent, approval or action of, make any filing
(other than ADA’s obligation to file information with the Securities and
Exchange Commission regarding this agreement) with or give any notice to any
Person as a result or under the terms of, or (5) result in the creation or
imposition of any material Lien upon the Party or any of its assets or
properties under any contract, lease, mortgage, instrument or other document or
agreement or authorization of a governmental agency or body to which the Party
is a party or by which any of the Party’s assets and properties are bound.

 

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Indemnity Obligations

  

Disputes have arisen between ADA, on the one hand, and the ECP Defendants and
the AC Venture Defendants, on the other hand, regarding ADA’s obligations to
indemnify the ECP Defendants and

the AC Venture Defendants against Losses (as defined in the Joint Development
Agreement (“JDA”))resulting from, arising out of or relating to the following
actions (collectively, and together with all Actions and Proceedings (as defined
in the JDA) related thereto, the

“Norit Litigation”):

 

Texas Action: Norit Americas, Inc. (“Norit”) v. ADA-ES, Inc., No. 08-0673 (71st
Dist. Ct., Harris County, Tex.) (the “Texas Action”);

 

Arbitration: American Arbitration Association arbitration Case No.
30-192-Y-00718-09 (the “Arbitration Action”); and

 

New Jersey Action: Norit Americas Inc. v. Energy Capital Partners I, LP, No.
ESX-C-304-09 (N.J. Super. Ct. Ch. Div.) (the “New Jersey Action”).

 

In addition to the indemnification obligations of ADA in the section titled “ADA
Indemnification Obligations for Royalty Payments”, ADA acknowledges and agrees
that it shall indemnify the ECP Defendants and the AC Venture Defendants in
respect of, and hold each of them harmless from and against any and all Losses
(as defined in the JDA) suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
(1) any breach by ADA of the ADA/Norit Settlement Agreement, the Final Award
(except with respect to breaches by ADA of its obligations pursuant to the Final
Award to pay Norit any and all amount due with respect to the New Carbon
Facilities) and the Other Awards and (2) this Agreement (collectively, the “ADA
Indemnity Obligations”).

 

“ADA/Norit Settlement Agreement” means that certain Settlement Agreement dated
as of August 29, 2011 by and among ADA and Norit.

 

“ACS/Norit Settlement Agreement” means that certain Settlement Agreement dated
as of August 29, 2011 by and among the AC Venture Defendants, the ECP Defendants
and Norit (collectively with the ADA/Norit Settlement Agreement, the “Settlement
Agreements”).

 

“Final Award” means that certain Stipulated Partial Final Award regarding the
Corporate Parties (as defined therein) dated October 18, 2011 entered in the
Arbitration Action.

 

“Other Awards” means that certain Stipulated Partial Final Damages Award dated
October 18, 2011 entered in the Arbitration Action and the certain Final Damages
Award Against John Rectenwald and Stephen D. Young dated October 17, 2011
entered in the Arbitration Action.

 

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Amount of Incurred Legal Fees and Expenses    As of the date hereof (the “Legal
Fee Settlement Date”) the ECP Defendants and the AC Venture Defendants have
incurred an aggregate of approximately $33.1 million in legal fees, costs and
expenses that the ECP Defendants and the AC Venture Defendants contend resulted
from, arose out of or related to the Norit Litigation. These legal fees, costs
and expenses, together with any other legal fees, costs and expenses incurred by
the ECP Defendants and the AC Venture Defendants on or before the Legal Fee
Settlement Date that resulted from, arose out of or related to the Norit
Litigation, are collectively referred to herein as the “Incurred Legal Fees”.
Agreement Concerning Amount to be Paid for Incurred Legal Fees and Sufficiency
of Other Consideration   

As a compromise and in order to resolve the dispute among the Parties related to
ADA’s obligation to indemnify the ECP Defendants and the AC Venture Defendants
for the Incurred Legal Fees the ECP Defendants and the AC Venture Defendants
agree to accept, and ADA agrees that it is liable for and shall pay, as full and
final settlement, the amount of $29,163,273 provided that such amount is paid as
provided in the section titled “Payment of Settlement Fee Amount” below (the
“Settlement Fee Amount”).

 

In consideration of the promises and mutual agreements contained in this
Agreement, and for other good and valuable consideration (including the
Settlement Fee Amount), the receipt and sufficiency of which is hereby
acknowledged, the Parties agree to be bound by the other provisions of this
Agreement.

ADA Capital

Contributions to ACS

   As of the date hereof, ADA has made, in the aggregate, Capital Contributions
to ACS in the amount of $25,563,273 (the “Contribution Amount”). Payment of
Settlement Fee Amount   

ADA shall pay or provide the Settlement Fee Amount as follows:

 

Cash Payment to ACS: ADA shall pay in the aggregate $2.0 million in immediately
available funds to ACS on the business day immediately following the date of
this Agreement to an account specified in writing by ACS (the “Cash Payment”) in
partial satisfaction of the Incurred Legal Fees.

 

Periodic Cash Payments: In addition, on the business day immediately following
the date of this Agreement and then again on the first business day of each
month for an aggregate total of sixteen (16) installments, ADA shall pay to ACS
to an account specified in writing by ACS $100,000 per installment in partial
satisfaction of the Incurred Legal Fees, one-third of which shall be deemed to
be owed to each of ACS, RREP and Crowfoot Supply.

 

Relinquishment of Equity Interests: Effective upon the execution of this
Agreement by the Parties, ADA shall relinquish all of its Equity Interests in
ACS (which shall collectively be valued at the Contribution Amount) to ACS in
partial satisfaction of the Incurred Legal Fees. ADA shall take all actions and
to do, or cause to be done, all things necessary, proper or advisable to effect
such relinquishment.

 

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     IP License Agreement Amendment: ADA shall execute an amendment to the
Intellectual Property License
Agreement as detailed below upon execution of this Agreement.

Additional Legal Fees

and Expenses

  

Additional Legal Fees: Except as otherwise provided in this Section, ADA, on the
one hand, and the ECP Defendants and the AC Venture Defendants, on the other
hand, shall pay all their respective legal fees, costs and expenses they incur
arising after the Legal Fee Settlement Date resulting from, arising out of or
relating to the Norit Litigation, including without limitation, the Final Award
and the Settlement Agreements.

 

Control of Actions or Proceedings or Other Disputes: The ECP Defendants or the
AC Venture Defendants may, but shall not be obligated to, elect, at any time and
from time to time, to control any Action or Proceeding or other dispute
(including counterclaims) resulting from, arising out of or relating to the
Norit Litigation, including, without limitation the Final Award, the Other
Awards and the Settlement Agreements (the “Norit Matters”), involving any ECP
Defendant or AC Venture Defendant, which control shall include full authority to
settle the Norit Matters (the “Control Option”); provided, however, that if (1)
ADA is current with respect to its monetary obligations pursuant to this
Agreement, including to pay the Royalty Payments and with respect to the amount
of the Periodic LC (including, without limitation, all Litigation Postings) and
the Security LC and (2) to the extent any such settlement concerns Royalty
Payments, the settlement must be presented to ADA for its approval (the date
such proposal is delivered to ADA, the “Notification Date”), which approval
shall not be unreasonably withheld. The ECP Defendants and the AC Venture
Defendants shall keep ADA apprised of any settlement discussions that concern
potential Royalty Payments. Within five business days after the Notification
Date, ADA must (1) consent to the settlement or (2) increase the Periodic LC
(the terms of which are set forth below in the paragraph titled “Prepayment of
Periodic Royalty Amounts”) in the amount set forth below (each such amount, a
“Litigation Posting”).

 

•      Initial Litigation Posting: At the time ADA rejects any settlement
proposal, the Periodic LC amount shall be increased by an amount equal to the
difference between (1) the amount of Royalty Payments that have been made up to
such time pursuant to the Final Award and (2) the amount of Royalty Payments
that would have been due or made up to such time if Norit is granted the relief
it is requesting in such Norit Matters or if such Norit Matters are otherwise
decided in Norit’s favor.

 

•      Subsequent Litigation Postings: After the initial increase in the
Periodic LC to address a particular rejected settlement proposal, each forecast
prepared

  

 

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pursuant to the paragraph below titled “Good Faith Forecast of Periodic Royalty
Amount” during the pendency of the Norit Matters shall include an additional
amount equal to the difference between (1) the amount of Royalty Payments that
would be made pursuant to the Final Award during the period provided for in such
paragraph and (2) the amount of Royalty Payments that would be required to be
made during the period provided for in such paragraph if Norit is granted the
relief it is requesting in such Norit Matters or if such Norit Matters are
otherwise decided in Norit’s favor, and such amount shall be added as a separate
item in the Royalty Notice. In no event shall the subsequent Litigation Postings
include amounts duplicative with the initial Litigation Posting provided for in
the immediately preceding paragraph. Any amounts included in the Royalty Notice
on account of the Norit Matters shall be clearly set out in the Royalty Notice
as amounts to secure a disputed liability and such amounts shall be added to the
Periodic LC (the terms of which are set forth below in section titled
“Prepayment of Periodic Royalty Amounts”).

 

If within five business after the Notification Date, (1) ADA fails to reply
regarding whether it consents to the proposed settlement or (2) ADA notifies the
ECP Defendants and the AC Venture Defendants that it does not consent to the
settlement, but fails to make the Litigation Posting within five business days
after the Notification Date, then ADA shall automatically be deemed to have
consented to the settlement.

 

If (1) within five business day after the Notification Date ADA notifies the ECP
Defendants and the AC Venture Defendants that it does not consent to the
settlement and (2) within five business days after the Notification Date ADA
makes the Litigation Posting, then the ECP Defendants and the AC Venture
Defendants shall, within five business days of the later of such notification or
posting, notify ADA if (A) they elect to continue to control the Norit Matters
to which the settlement relates on their behalf (and not on behalf of ADA), in
which case the ECP Defendants and/or the AC Venture Defendants shall continue to
pay all the legal fees, costs and expenses they incur in connection with such
Norit Matters or (B) they elect to allow ADA to assume control of such Norit
Matters on behalf of the ECP Defendants and/or the AC Venture Defendants with
counsel of ADA’s choosing, in which case ADA shall pay all of the legal fees,
costs and expenses ADA incurs on behalf of the ECP Defendants and the AC Venture
Defendants in connection with such Norit Matters.

 

To the extent that the ECP Defendants and/or the AC Venture Defendants elect to
continue to control any such Norit Matters on

 

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their own behalf after ADA has withheld consent to a settlement, the ECP
Defendants and/or the AC Venture Defendants shall have sole authority over the
conduct of their prosecution or defense of such Norit Matters on their own
behalf, and ADA shall be from that point solely responsible for its prosecution
or defense of such Norit Matters on its own behalf and ADA shall pay all the
legal fees, costs and expenses it incurs in connection with such Norit Matters.
All parties shall be free in such case to settle such Norit Matters on its own
behalf without prejudice to the other parties.

 

To the extent that the ECP Defendants or the AC Venture Defendants do not elect
to exercise their Control Option at the initiation of a particular Norit Matter,
ADA may, but shall not be obligated to, elect to control such Norit Matter,
which control shall include full authority to settle such Norit Matter. Any
Party not controlling such Norit Matter may at any time retain separate counsel
to represent it at its sole cost and expense. The obligation of ADA to indemnify
the ECP Defendants and the AC Venture Defendants pursuant to the section titled
“ADA Indemnification Obligations for Royalty Payments” shall not be altered in
any manner as a result of any such Norit Matter (1) including if no Party elects
to control or otherwise defend such Norit Matter (in which case such
indemnification obligations shall include any default judgment or similar award
entered in such Norit Matter), (2) regardless of which Party, if any, controls
any such Norit Matter and (3) regardless of the outcome, including, without
limitation, the terms of any settlement (including, without limitation,
settlements that ADA is deemed to have automatically consented to pursuant to
the provisions of this section) of any such Norit Matter.

Losses Arising from

Royalty Payments

   ADA Indemnification Obligations for Royalty Payments: ADA agrees that,
notwithstanding the joint and several obligations of ADA, ACS and RREP set forth
in Sections 2 (Scope of Royalty), 3 (Royalty Terms and Rates), 4 (Payment), 6.d
(Audit Costs and Variances) and 7 (Late Payments) in the Final Award, as between
ADA on the one hand, and ACS and RREP on the other hand, ADA is obligated to (1)
pay Norit any and all amounts due pursuant to such sections of the Final Award
with respect to the existing activated carbon manufacturing facility located in
Coushatta, Louisiana consisting of four contiguous multi-hearth furnaces and the
related equipment (the “Red River Plant”) and the existing Natchitoches facility
(together with the Red River Plant, the “Existing Carbon Facilities”) (the
“Royalty Payments”) and (2) indemnify the ECP Defendants and the AC Venture
Defendants against all Losses suffered, incurred or sustained by any of them or
to which any of them becomes subject, resulting from, arising out of or relating
to ADA’s failure to make the Royalty Payments, all of which shall constitute
Losses (as defined in the JDA). The Parties further agree that in the event any
additional carbon production facilities are constructed or operated by the AC
Venture Defendants, or any Affiliates or Subsidiaries thereof, after the date of
this Agreement (hereinafter “New Carbon Facilities”), and

 

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  notwithstanding the joint and several obligations of ADA, ACS and RREP set
forth in Sections 2 (Scope of Royalty), 3 (Royalty Terms and Rates), 4
(Payment), 6.d (Audit Costs and Variances) and 7 (Late Payments) in the Final
Award, as between ADA on the one hand, and ACS and RREP on the other hand, ACS
and RREP (1) are obligated to pay Norit any and all amounts due pursuant to such
sections of the Final Award with respect to the New Carbon Facilities and (2)
ADA shall have no liability for, and no indemnity obligation with respect to,
any and all amounts due to Norit pursuant to such sections of the Final Award
with respect to the New Carbon Facilities.   Good Faith Forecast of Periodic
Royalty Amounts: On the fifth business day after the end of each calendar
quarter the AC Venture Defendants shall in good faith prepare an estimate (based
upon projected or actual customer shipments and deliveries for then-existing
contracts of the AC Venture Defendants and spot sales) of the amount of the
Royalty Payments related to the quarter just ended and shall deliver written
notice (each, a “Royalty Notice”) to ADA setting forth in reasonable detail the
amount and the basis for the forecast of the Royalty Payments (each, and as
adjusted by the true up mechanism detailed below, a “Periodic Royalty Amount”).
On the first business day of a month during which a Royalty Payment is due to
Norit, the AC Venture Defendants shall in good faith prepare a final statement
of the amount of such Royalty Payment (the “Final Quarterly Royalty Amount”) and
shall deliver written notice to ADA setting forth in reasonable detail the basis
for the Final Quarterly Royalty Amount and ADA shall pay such amount to Norit
pursuant to Section 4 of the Final Award.   The AC Venture Defendants shall
provide to ADA the royalty reports provided to Norit pursuant to Section 5 of
the Final Award substantially concurrently with when such reports are provided
to Norit. The AC Venture Defendants shall also provide to ADA and ADA shall
provide to the ECP Defendants and the AC Venture Defendants all documents and
information they exchange with Norit concerning or relating in any manner to the
Norit Litigation, including, but not limited to, the documents and information
exchanged relating to Norit’s exercise of its audit rights under the Final
Award. Such documents and information shall be provided substantially
concurrently with when such documents and information are exchanged with Norit.
Information that would otherwise be provided directly to ADA, the ECP Defendants
and the AC Venture Defendants, as applicable, pursuant to this paragraph may be
designated as “highly confidential” by ADA, the AC Venture Defendants and/or the
ECP Defendants, as applicable, and such highly confidential information shall be
disclosed in the case of ADA only to the Auditing Accountant and outside counsel
for ADA and in the case of the ECP Defendants and the AC Venture Defendants only
to their outside counsel and any outside audit firm retained by them. The
Auditing Accountant, such outside audit firm and such outside counsel shall
agree not to provide such information

 

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  to ADA, the ECP Defendants and the AC Venture Defendants, as applicable, their
respective Subsidiaries and other Affiliates and their respective directors,
officers, employees, servants, agents, trustees, insurers, co-insurers,
reinsurers, and shareholders. (i.e., “attorneys eyes only”), except as such
disclosure may be required by applicable law, in which case ADA, the ECP
Defendants and the AC Venture Defendants, as applicable, shall inform the other
parties of the disclosure.   If requested by ADA, the AC Venture Defendants
shall meet and confer with ADA, the Auditing Accountant and/or outside counsel,
as applicable, regarding the method and approach used by the AC Venture
Defendants to calculate the Royalty Payments in the statements and reports
prepared in accordance with the preceding two paragraphs. If ADA disagrees with
any such method or approach after meeting and conferring with the AC Venture
Defendants, ADA shall have the option, but not the obligation, to raise, at its
sole cost and expense, its objection to such calculation with any arbitration
panel empowered in the Arbitration Action to enforce the Final Award, and all
Parties shall be bound by any final determination of the amount of the Royalty
Payments due pursuant to the procedures set forth in the Final Award or as
otherwise determined by any panel in the Arbitration Action. Nothing in this
paragraph shall relieve ADA of its obligations pursuant to any provision of this
Agreement, including, without limitation, the obligation to fund the Periodic LC
with the Periodic Royalty Amount as detailed on the Royalty Notice delivered by
the AC Venture Defendants or to pay the Final Quarterly Royalty Amount as
determined by the AC Venture Defendants.  

Prepayment of Periodic Royalty Amounts: Within five(5) business days after
receipt of a Royalty Notice, ADA shall prepay the Periodic Royalty Amount and
any Litigation Posting by delivering (or revising an outstanding Periodic LC
amount) to the AC Venture Defendants an irrevocable standby letter of credit
(the “Periodic LC”) containing the following terms:

 

•      Stated Amount: Not less than the Periodic Royalty Amount (including the
amount of all Litigation Postings).

 

•      Beneficiaries: The AC Venture Defendants obligated to make Royalty
Payments, and, in the event of any Litigation Posting, the ECP Defendants and
the AC Venture Defendants that are parties to the particular Norit Matters for
which a Litigation Posting was made.

 

•      Issuing Institution: An Approved Institution (as herein defined).

 

•      Drawing: The beneficiaries may draw upon the letter of credit 8 business
days prior to the due date of any Royalty Payment not previously paid by

 

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ADA and may draw the full amount of such letter of credit at any time between
the 29th day prior to the expiration of the letter of credit and the date of the
expiration of the letter of credit if a new letter of credit has not been
provided with terms no less favorable than the existing letter of credit and, in
the event of any Litigation Posting, the beneficiaries may draw upon the letter
of credit upon the failure by ADA to pay any amounts due pursuant to this
Agreement related to the particular Norit Matters for which the Litigation
Posting was made.

 

•      Term: The Periodic LC delivered to the AC Venture Defendants as
prepayment of the Periodic Royalty Amount must be Continually in Place until the
later of (1) at least 120 days after the date the corresponding Royalty Payment
is due to Norit and (2) at least 30 days after the performance of all actions or
obligations of ADA, the AC Venture Defendants and the ECP Defendants related to
the particular Norit Matters for which the Litigation Posting was made. Amounts
in the Periodic LC attributable to the Periodic Royalty Amount shall remain a
part of the Periodic LC until 120 days after the date the corresponding Royalty
Payment is due to Norit and amounts in the Periodic LC attributable to a
Litigation Posting shall remain part of the Periodic LC until 30 days after the
performance of all actions or obligations of ADA, the AC Venture Defendants and
the ECP Defendants related to the particular Norit Matters for which the
Litigation Posting was made.

 

•      Prepayment: ADA may pay to the AC Venture Defendants and/or Norit any
Final Quarterly Royalty Amount at least 10 business days prior to its due date
in lieu of having the letter of credit drawn down, in which case the letter of
credit will roll over for subsequent Periodic Royalty Amounts.

  The Security LC and Periodic LC (including Litigation Postings) may, at ADA’s
discretion, be incorporated into a single letter of credit with a single bank
provided that all conditions of both the Security LC and the Periodic LC are
complied with and the necessary sums are aggregated in the stated amount.  

Any letter of credit provided by ADA pursuant to this Agreement may expire at
any time, but will be deemed to be “Continually in Place” only if such letter of
credit is renewed or replaced on terms no less favorable than the existing
letter of credit at least thirty days prior to the expiration date of the
existing letter of credit.

 

“Approved Institution” means a (1) financial institution of national

 

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  reputation and reasonably satisfactory to the AC Venture Defendants or (2) the
Bank of the West in Denver, Colorado; provided, that if the financial
institution issuing the letter of credit(s) suffers an Adverse Rating Event,
then within 10 business days of such Adverse Rating Event, ADA shall cause a new
Approved Institution selected in accordance with clause (1) to issue the
applicable letter of credit(s).   “Adverse Rating Event” means that the first to
occur of (1) a downgrade in the rating accorded to the financial institution or
the financial institution’s debt securities or long-term debt by any “nationally
recognized statistical rating organization”(as defined by the Securities and
Exchange Commission for purposes of Rule 436(g)(2) under the Securities Act of
1933, as amended) or (2) any such organization publicly announces that it has
under surveillance or review, with possible negative implications, its rating of
the financial institution or the financial institution’s debt securities or
long-term debt.   Initial Royalty Payment and Good Faith Estimate: Before the
date of this Agreement ADA paid Norit for all royalties past due pursuant to
Section 4 of the Final Award, which is through June 30, 2011. The parties have
agreed upon a written good faith forecast of the Periodic Royalty Amount related
to the third quarter of 2011, which shall be deemed the initial Periodic Royalty
Amount. No later than five business days after the execution of this Agreement,
ADA shall cause the stated amount of the Periodic LC to be no less than the
initial Periodic Royalty Amount.   Audit Election: Upon reasonable prior notice,
but in any event no more than once in any calendar year, until December 31,
2019, ADA may elect, at its sole costs and expense, to have a nationally or
regionally recognized U.S. independent public accountant reasonably satisfactory
to the ECP Defendants and the AC Venture Defendants (the “Auditing Accountant”)
conduct an audit to verify that the payments and reports made by ADA or the AC
Venture Defendants pursuant to the Final Award are accurate, complete, and in
compliance with the terms and conditions of the Final Award, and that, when
applicable, royalties have been paid on Gross Revenues (as defined in the Final
Award) for activated carbon in accordance with the terms of the Final Award (in
all cases, solely to determine the accuracy of the amount of such payments
related to the Existing Carbon Facilities and the division of such payments
between the Existing Carbon Facilities and the New Carbon Facilities). Such
examination shall occur at a location or locations on the AC Venture Defendants’
premises reasonably designated by the AC Venture Defendants and shall not
unreasonably interfere with the normal business operations of the AC Venture
Defendants. The AC Venture Defendants shall provide the Auditing Accountant with
access to all relevant information reasonably requested to conduct the audit.
Information received by the Auditing Accountant pursuant to this paragraph may
be designated as “highly

 

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  confidential” by the AC Venture Defendants and/or the ECP Defendants and such
highly confidential information shall be disclosed only to the Auditing
Accountant and outside counsel for ADA and the Auditing Accountant and outside
counsel shall agree not to provide such information to ADA, its Subsidiaries and
other Affiliates and their respective directors, officers, employees, servants,
agents, trustees, insurers, co-insurers, reinsurers, and shareholders., i.e.,
“attorneys eyes only.”   Auditing Accountant Selection: To maintain the
independence of the audit and the confidentiality of the AC Venture Defendants’
information subject to such audit, the Auditing Accountant selected by ADA (and
any persons working for such accountant) shall be bound to keep confidential the
details of the AC Venture Defendants’ operations (including, but not limited to,
their confidential information and trade secrets) subject to the audit and to
limit the disclosure of the results of any audit to ADA solely to the amount, if
any, of a payment adjustment that should be made and whether the adjustment is
required due to technical or financial concerns. Any Auditing Accountant
selected by ADA (and any persons working on the audit) shall not have worked for
ADA or any Affiliate of ADA other than as an Auditing Accountant (or as a person
working for such accountant) under this Agreement for at least 3 years and shall
not work for ADA or any Affiliate of ADA for at least 3 years after such audit
is completed.   Audit Variances and Misallocations: No action shall be taken
unless the audit identifies a variance with respect to an amount due to Norit or
a misallocation of the royalties paid pursuant to the Final Award between the
Existing Carbon Facilities and the New Carbon Facilities, in both cases, of more
than 5% of a Royalty Payment(s) made to Norit. In the event that an audit
identifies a variance of an amount due to Norit of greater than 5%, ADA shall
have the right, but not the obligation, to conduct an additional audit pursuant
to the procedures in the paragraph titled “Audit Election” in the calendar year
in which the discrepancy was discovered. In the event that the (1) variance
resulted from a purely arithmetic error by the AC Venture Defendants in
calculating the amount of a Royalty Payment(s) due to Norit (as reasonably
agreed by ADA and the AC Venture Defendants) or (2) the AC Venture Defendants
misallocated such royalty payment(s) to the Existing Carbon Facilities, in
either case, by more than 5%, the AC Venture Defendants shall pay the amount of
such arithmetic error or misallocation and interest on such amount at the
Interest Rate and any related collection efforts within 10 business days of
agreement on such amount or an adjudication thereof. The “Interest Rate,” for
purposes of this Agreement, means the rate per annum equal to the lesser of
(1) the prime rate as published by the Board of Governors of the Federal Reserve
System, as published in statistical release H. 15 or any publication that may
supersede it on the day that interest begins to accrue, plus 2 1/2%, and (2) the
maximum rate permitted by applicable law. In the event that the AC Venture
Defendants misallocated such royalty payments to

 

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the New Carbon Facilities by more than 5%, ADA shall pay the amount of such
misallocation and interest on such amount at the Interest Rate and any related
collection efforts within 10 business days of agreement on such amount or an
adjudication thereof. Notwithstanding the foregoing, if ADA is not current with
respect to its monetary obligations pursuant to this Agreement, including to pay
the Royalty Payments and with respect to the amount of the Periodic LC
(including, without limitation, all Litigation Postings) and the Security LC,
then any amounts due by the AC Venture Defendants to ADA pursuant to this
paragraph shall not be paid to ADA and shall instead be off-set against such ADA
obligations until the full amount of such ADA obligations are satisfied.

 

In the event that there is a dispute with Norit concerning the royalty amounts
due under the Final Award, and notwithstanding the results of any audit
undertaken pursuant to this Agreement, the Parties shall be bound by any final
determination of the amount of the Royalty Payments due pursuant to the
procedures set forth in the Final Award or as otherwise determined by any panel
in the Arbitration Action.

 

If the audit identifies any variances other than those resulting from purely
arithmetic errors with respect to the amount of royalty payments due to Norit
pursuant to the Final Award resulting from, arising out of or relating to the
Existing Carbon Facilities, ADA may, but shall not be obligated, to present the
results of such audit to Norit and request that an adjustment be made to the
payments made pursuant to the Final Award. The AC Venture Defendants subject to
the royalty payments in the Final Award shall provide reasonable cooperation to
ADA in presenting audit results to Norit and subsequently the panel in the
Arbitration Action if ADA cannot reach agreement with Norit and decides to
pursue the issue with such panel (which cooperation shall not require such AC
Venture Defendants to incur any out of pocket expenses). If ADA is current with
respect to its monetary obligations pursuant to this Agreement, including to pay
the Royalty Payments and with respect to the amount of the Periodic LC
(including, without limitation, all Litigation Postings) and the Security LC,
any amounts received from Norit as a result of such adjustment shall be paid to
ADA. If ADA is not so current, such amounts shall first be paid to the AC
Venture Defendants to cure all such deficiencies and then the remaining amount,
if any, shall be paid to ADA.

 

Notwithstanding the results or pendency of any (1) audit, (2) proceeding with or
decision by the panel in the Arbitration Action regarding a dispute over the
amount of royalty payments due to Norit pursuant to the Final Award or (3) the
adjudication of any miscalculation or misallocation, the Parties shall continue
to perform all their respective obligations pursuant to this Agreement,
including ADA’s obligations with respect to the Royalty Payments, the Periodic
LC (including, without limitation, all Litigation Postings) and the Security LC.

 

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Security for Royalty

Payments

   Additional Security for Royalty Payments: As additional security for the
prompt and complete performance when due of the Royalty Payments, ADA shall
post, in accordance with, and subject to the limitations of, this section, a
letter of credit benefiting the AC Venture Defendants obligated to make Royalty
Payments (the “Security LC”) containing the following terms:   

•      Stated Amount: Calculated pursuant to this provisions of this section.

 

•      Beneficiaries: The AC Venture Defendants obligated to make Royalty
Payments.

 

•      Issuing Institution: An Approved Institution.

 

•      Drawing: The beneficiaries may draw upon the letter of credit 5 business
days after the due date of any Royalty Payment not previously paid by ADA and
may draw the full amount of the letter of credit at any time between the 29th
day prior to the expiration of the letter of credit and the date of the
expiration of the letter of credit if a new letter of credit has not been
provided with terms no less favorable than the existing letter of credit.

 

•      Term: The Security LC must be Continually in Place until at least the 1
year anniversary of the date the final Royalty Payment is due.

   This Security LC is in addition to the letter of credit established by ADA
for the Periodic Royalty Amount as set forth above under the heading “Prepayment
of Periodic Royalty Amount.”   

1. Amount of Security LC: ADA shall establish the Security LC in the minimum
aggregate amounts set forth below (the “Minimum Security LC Amount”) on or
before the dates noted. For the avoidance of doubt, amounts stated below are
aggregate amounts of the Security LC on such date and are not additional amounts
to any existing Security LC.

 

Date    Amount   September 30, 2012    $ 1,000,000    March 31, 2013    $
1,500,000    September 30, 2013    $ 2,000,000    March 31, 2014    $ 2,500,000
   September 30, 2014    $ 3,500,000    March 31, 2015    $ 4,500,000   
September 30, 2015    $ 5,000,000    March 31, 2017    $ 3,500,000    September
30, 2017    $ 2,500,000   

 

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At any time when the stated amount of the Security LC exceeds $5,000,000, the
stated amount of the Security LC may be reduced by the amount, if any, of the
New Investment Security Amount; provided that in no event shall such reduction
cause the stated amount of the Security LC to be less than $5,000,000. By way of
example, if the stated amount of the Security LC equals $6,000,000 and ADA makes
a Passive Investment such that the New Investment Security Amount is $2,000,000,
ADA may, at its election, reduce the stated amount of the Security LC to
$5,000,000 for so long as the New Investment Security Amount equals or exceeds
$1,000,000. The foregoing notwithstanding, if at any date the amount of the
Periodic LC and the Security LC when combined exceeds the Remaining Royalty
Estimate, ADA may cause the amount of the Security LC to be reduced such that
the amount of the Periodic LC and the Security LC when combined equals or
exceeds the Remaining Royalty Estimate.

 

 

2. Special Proceeds. Sales of equity in ADA are expressly excluded from this
section and “Special Proceeds” as defined below. Subject to the foregoing
exclusion and in addition to the above Minimum Security LC Amounts set forth in
paragraph 1, within two (2) business days of receipt by ADA of any net cash and
cash equivalent proceeds from (1) the sale, assignment, transfer, conveyance
lease, or other disposal (each, a “Sale Transaction”) of any interest in the
Refined Coal Business, (2) any distributions or portion of distributions from
the Refined Coal Business resulting from a Sales Transaction of any asset or
assets of the Refined Coal Business in one or a series of related transactions
for an amount in excess of $500,000 other than in the ordinary course of
business (for purposes of this item (2),“ordinary course of business” shall
include the sale or lease of equipment in the Refined Coal Business) and (3) any
Sales Transaction of any asset or assets (including equity interests in any
direct or indirect subsidiary, other than the Refined Coal Business, which is
addressed in clause (1) above) in one or a series of related transactions for an
amount in excess of $1,000,000 other than in the ordinary course of business,
ADA shall apply any and all such net amounts (collectively, the “Special
Proceeds”) as follows:

 

(A) first, 100% to the AC Venture Defendants until the AC Venture Defendants
have been reimbursed for the aggregate amount of all Royalty Payments funded out
of pocket by any of them, or on behalf of any of them, through the date of such
allocation (other than via draws upon the Periodic LC or the Security LC
provided by ADA under this Agreement) plus interest on each such payment made by
the AC Venture Defendants at the Interest Rate;

 

(B) second, 100% to fund the Periodic LC (including, without limitation, all
Litigation Postings) to the then- required amount to the extent not yet funded
as required by this Agreement;

 

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(C) third, 100% to fund/replenish the Security LC to the then-required amount to
the extent not yet funded as required by this Agreement;

 

(D) fourth, 50% to increase the stated amount of the Security LC until the
aggregate total of all contributions pursuant to this subparagraph (D) equals
$10,000,000 or, at any time when the stated amount of the Security LC exceeds
$5,000,000, $10,000,000 minus the New Investment Security Amount (by way of
example, if on a certain date, the stated amount of the Security LC equals
$6,000,000 and the New Investment Security Amount is $1,000,000, then the
Special Proceeds shall be applied pursuant to this subpart (D) until the
aggregate total of all contributions pursuant to this subparagraph (D) equals
$9,000,000); provided, that if such increase would cause the stated amount of
the Periodic LC and the Security LC when combined to exceed the Remaining
Royalty Estimate, only such portion of such increase shall be made as is
necessary to cause such stated aggregate amount to equal the Remaining Royalty
Estimate; and

 

(F) fifth, any remaining Special Proceeds shall be retained 100% by ADA to be
used in its sole discretion.

  Notwithstanding the foregoing, if any Special Proceeds are derived from the
sale of a portion (but not all) of the equity interests in any direct or
indirect subsidiary of ADA pursuant to clause (3) above up to a maximum of
$5,000,000 and such amounts are retained in such direct or indirect subsidiary
of ADA to capitalize such joint venture between ADA and one or more third
parties and such amounts are retained in such entity to further the business of
such entity, subparagraph (D) shall not apply with respect to such Special
Proceeds. For the avoidance of doubt, to the extent the amount of such Special
Proceeds exceeds $5,000,000, subparagraph (D) shall still apply with respect to
the amount of such Special Proceeds in excess of $5,000,000.  

3. Supplemental Security LC Increases Arising from Cash Distributions and
Profits of ADA. In the event that ADA declares or otherwise issues a dividend to
any or all of its shareholders or repurchases any equity security from any or
all of its shareholders prior to January 1, 2018 (other than repurchases of
common stock under employee stock plans), ADA shall, within two business days of
such dividend or repurchase, make a supplemental increase in the stated Security
LC amount in an amount equal to 50% of the aggregate fair market value of such
dividends or amount spent to repurchase such equity securities (the “Cash
Distribution LC Amount”), such Cash Distribution LC Amount not to exceed

 

16

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  $7,500,000 in the aggregate. Further, the first time that ADA achieves in a
fiscal year ending prior to January 1, 2018 total earnings in excess of
$20,000,000 as reported in its audited year end financial report, ADA shall,
within 48 hours of the public disclosure of such earnings, make a one time
supplemental increase in the stated Security LC amount of $5,000,000 (the
“Profit LC Amount”); provided, however, that in no event shall the aggregate
increase of the stated Security LC amount from all Cash Distribution LC Amount
increases and the Profit LC Amount exceed $7,500,000; provided, further, that if
any increase in the Security LC amount provided under this paragraph 3 would
cause the aggregate stated amount of the Periodic LC and the Security LC when
combined to exceed the Remaining Royalty Estimate, only such portion of such
increase to the Security LC shall be made as is necessary to cause such stated
aggregate amount to equal the Remaining Royalty Estimate. For the avoidance of
doubt, the aggregate maximum amount of the Security LC is $22,500,000, comprised
of the maximum of $5,000,000 required under paragraph 1 as of August 31, 2015,
plus the maximum Security LC increase of $10,000,000 in connection with “Special
Proceeds” increases, plus the maximum increase of $7,500,000 required under this
paragraph.  

4. New Investment Security. If ADA makes a Passive Investment in any New
Investment, ADA (1) shall grant the AC Venture Defendants a lien and security
interest on, and shall pledge to the AC Venture Defendants all right, title and
interest, whether then owned or thereafter acquired in, to and under, whatever
interests ADA receives in connection with such Passive Investment in such New
Investment as additional security for the prompt and complete payment and
performance when due of the Royalty Payments, provided that such lien and
security shall be released within 10 days after receipt by the AC Venture
Defendants of a written request by ADA, which written request shall be delivered
to the AC Venture Defendants no earlier than the date on which the amount of the
Periodic LC and the Security LC when combined first equals or exceeds the
Remaining Royalty Estimate and (2) the agreements or other documents governing
such Passive Investment in such New Investment shall (A) provide that whenever
ADA is to be paid any sum with respect to such Passive Investment in such New
Investment, any amounts owed by ADA to the AC Venture Defendants pursuant to
this Agreement shall be deducted from that sum before payment and (B) include a
provision substantively similar to Section 12.2(f) (Remedies Upon Indemnity
Default) of the ACS LLC Agreement as it exists as of the date of this Agreement.

 

5. Drawings on the Security LC. The AC Venture Defendants shall only draw on the
Security LC to make Royalty Payments due that have not been made by ADA. Within
10 business days of any drawing on the Security LC by any AC Venture

 

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Defendant, ADA shall immediately use its best efforts to replenish such
security; provided, however, if the aggregate amount available to the AC Venture
Defendants pursuant to the combined Periodic LC and the Security LC stated
amounts after such drawing exceeds the aggregate amount of all Royalty Payments
to be paid pursuant to the Final Award in the next 12 months, as reasonably
estimated by the AC Venture Defendants, then ADA shall have no less than 120
days to replenish the Security LC.

 

6. Nothing in this Section shall relieve ADA of its obligations pursuant to any
other provision of this Agreement or any other agreement or limit the remedies
available to the AC Venture Defendants or the ECP Defendants pursuant to any
other provision of this Agreement or any other agreement.

“New Investment Security Amount” means an amount equal to (1) 50% times (2) the
aggregate amount of all Passive Investments in New Investments owned by ADA on a
particular date.

“Remaining Royalty Estimate” means the aggregate amount of all Royalty Payments
remaining to be paid pursuant to the Final Award, as reasonably estimated by the
AC Venture Defendants to be provided by ACS to ADA when reasonably requested on
no more than a quarterly basis.

“Refined Coal Business” means the development, sale, lease or operation of
equipment for the control of mercury and NOx in cyclone boilers that qualifies
for section 45 tax credits as the business is currently conducted by, or as may
be conducted by, Clean Coal Solutions, LLC.

Extraordinary Transactions    Extraordinary Transactions: In the event that ADA
(or any of its successors, assigns or direct or indirect subsidiaries in which
ADA holds directly or indirectly at least a fifty percent equity interest
(collectively, “Related Parties”)) (1) consolidates with or merges into any
other Person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger, (2) enters into a Sales Transaction for all or
substantially all of its assets with any Person or Persons acting together or
constituting a “group” under Section 13(d) of the Exchange Act (a “Group”), (3)
enters into a Sale Transaction for a material portion of its assets with any
Person or Group under direct or indirect common control with ADA or any Related
Party or (4) undertakes any reorganization, consolidation, restructuring,
recapitalization or other change in its ownership whereby a Person or Group
controls more than 50% of ADA’s or any Related Party’s voting securities then,
and in each such case, such Related Parties (and their respective successors,
assigns and direct and indirect subsidiaries) shall deliver to the ECP
Defendants and the AC Venture Defendants a duly executed joinder or similar
binding written undertaking to assume, on a joint and several basis with ADA and
any other such Related Party (and their respective successors, assigns and
direct and indirect subsidiaries), the obligations of ADA and the applicable
Related Parties under this Agreement.

 

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Release of Certain Known Claims Related to the Existing Actions    ECP/ACS
Release: In consideration of ADA’s promises in this Agreement, effective
immediately, the ECP Defendants and the AC Venture Defendants, each on their own
behalf and on behalf of their predecessors, successors, assigns, parent
entities, Subsidiaries, and Affiliates, and each of its past and present
directors, officers, partners, members, employees, servants, agents, trustees,
insurers, co-insurers, reinsurers, attorneys, and shareholders (collectively and
individually the “ECP/ACS Releasors”) releases, waives, and forever discharges
ADA and each of their predecessors, successors, assigns, parent companies,
Subsidiaries, and Affiliates, and each of their past and present directors,
officers, partners, members, employees, servants, agents, trustees, insurers,
co-insurers, reinsurers, attorneys, and shareholders (collectively, the “ADA
Releasees”) from and against all actions, causes of action, suits, debts, dues,
sums of money, accounts, controversies, agreements, promises, injunctive relief,
fees, variances, trespasses, damages, judgments, abstracts of judgments, liens,
extents, executions, claims, demands, liabilities, costs, expenses, obligations,
contracts, rights to subrogation, rights to contribution, and remedies of any
nature whatsoever, in law, admiralty, or equity, in any kind of forum, whether
sounding in contract, tort, or otherwise, that are known or reasonably should
have been known by them (collectively, “Claims”), which Claims any or all of the
ECP/ACS Releasors ever had, now have or that reasonably should have been known
by them (but specifically excluding those actions, causes of action, suits,
debts, dues, sums of money, accounts, controversies, agreements, promises,
injunctive relief, fees, variances, trespasses, damages, judgments, abstracts of
judgments, liens, extents, executions, claims, demands, liabilities, costs,
expenses, obligations, contracts, rights to subrogation, rights to contribution,
and remedies of any nature whatsoever, in law, admiralty, or equity, in any kind
of forum, whether sounding in contract, tort, or otherwise, that were not known
or that may not reasonably have been known by them (collectively, “Unknown
Claims”)) against any or all of the ADA Releasees, from the beginning of the
world until the date of this Agreement, arising from the Texas Action, the
Arbitration Action and the New Jersey Action; provided, however, that the
ECP/ACS Releasors do not release ADA from any Claim resulting from, arising out
of or relating to (1) the ADA Indemnity Obligations or (2) any obligation ADA or
its Affiliates has pursuant to the ADA/Norit Settlement Agreement, the Final
Award (except with respect to breaches by ADA of its obligations pursuant to the
Final Award to pay Norit any and all amount due with respect to the New Carbon
Facilities, which shall be ECP/ACS Release Claims Released Claims), the Other
Awards or this Agreement (collectively, the “ECP/ACS Released Claims”). Nothing
herein shall release or discharge any Claims that any Party may have in the
future for

 

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  failure to comply with this Agreement. Notwithstanding the foregoing paragraph
and the section titled “Additional Legal Fees”, automatically upon the breach
and failure to cure within two business days by ADA of its obligations pursuant
to this Agreement with respect (1) to making the Royalty Payments or (2) to
funding the Security LC or the Periodic LC (including, without limitation, all
Litigation Postings), the ECP Defendants and the AC Venture Defendants may bring
Claims pursuant to the terms of the JDA and this Agreement for Losses (as
defined in the JDA) (including, without limitation, any indirect, incidental,
punitive, special or consequential damages whatsoever which in any way arise out
of, relate to or are a consequence of such breach by ADA) suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to such breach by ADA regardless of when such
Losses first arose and the foregoing release shall be deemed null and void ab
initio with respect to such Losses (collectively, “Breach Claims”).  

ADA Release: In consideration of the ECP Defendants’ and the AC Venture
Defendants’ promises in this Agreement, effective immediately, ADA, on its own
behalf and on behalf of its

predecessors, successors, assigns, parent entities, Subsidiaries, and
Affiliates, and each of its past and present directors, officers, partners,
members, employees, servants, agents, trustees, insurers, co-insurers,
reinsurers, attorneys, and shareholders (collectively and individually the “ADA
Releasors”) releases, waives, and forever discharges the ECP Defendants and the
AC Venture Defendants and each of their predecessors, successors, assigns,
parent companies, Subsidiaries, and Affiliates, and each of their past and
present directors, officers, partners, members, employees, servants, agents,
trustees, insurers, co-insurers, reinsurers, attorneys, and shareholders
(collectively, the “ECP/ACS Releasees”) from and against all Claims, which
Claims any or all of the ADA Releasors ever had, now have or reasonably should
have known they had (but specifically excluding the Unknown Claims) against any
or all of the ECP/ACS Releasees, from the beginning of the world until the date
of this Agreement, arising from the Texas Action, the Arbitration Action and the
New Jersey Action; provided, however, that the ADA Releasors do not release the
ECP Defendants or the AC Venture Defendants from any obligation the ECP
Defendants, the AC Venture Defendants and their respective Affiliates has
pursuant to the ACS/Norit Settlement Agreement, the Final Award (except with
respect to breaches by ACS or RREP of their obligations pursuant to the Final
Award to pay Norit any and all amount due with respect to the Existing Carbon
Facilities, which shall be ADA Released Claims) or this Agreement (collectively,
the “ADA Released Claims”). Nothing herein shall release or discharge any Claims
and any Party may have in the future for failure to comply with this Agreement.

  Bar: (1) The ECP/ACS Releasors agree, effective immediately, to

 

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forever waive and forego any right to commence, prosecute, or assert, on their
own behalf or on behalf of another, any claims, cross-claims, or counterclaims
in any court or other forum in the United States or elsewhere, against the ADA
Releasors, whether arising under state, federal, or foreign law, arising from
the ECP/ACS Released Claims and (2) the ADA Releasors agree, effective
immediately, to forever waive and forego any right to commence, prosecute, or
assert, on their own behalf or on behalf of another, any claims, cross-claims,
or counterclaims in any court or other forum in the United States or elsewhere,
against the ADA Releasors, whether arising under state, federal, or foreign law,
arising from the ADA Released Claims; provided, however, in the case of both
clause (1) and (2) above, the ECP/ACS Releasors and the ADA Releasors
(collectively, the “Releasors”) do not waive and forego any right to commence,
prosecute, or assert any claim, cross-claims, or counter-claims in any court or
other forum in the United States or elsewhere, on their own behalf or on behalf
of another, whether arising under state, federal, or foreign law, relating to or
arising from this Agreement or any other agreement among any of the Releasors.
The Releasors agree that this provision may be enforced by injunction (including
an antisuit injunction) by any ECP/ACS Releasee or ADA Releasee, that the damage
caused by such unauthorized claims are incapable of being calculated with
certainty, and thus appropriate for injunctive relief. If any court or
regulatory body fails to dismiss the actions or enter the consent judgments as
contemplated herein or otherwise modifies the orders of dismissal or consent
judgments attached hereto in a manner that changes the legal rights and
obligations of the Parties, the release and bar provided for herein shall
operate so as to only permit the Parties to pursue their rights and obligations
consistent with this Agreement.

 

Other Losses: Except as expressly set forth in this Agreement regarding Breach
Claims, (1) this Agreement supersedes and completely replaces the Parties’
respective rights and obligations with respect to Losses incurred and
indemnification regarding the Norit Litigation under the JDA and the LLC
Agreement and (2) nothing in this Agreement shall expand or limit the Parties’
respective indemnification rights and obligations pursuant to the JDA or the ACS
LLC Agreement for matters other than the Norit Litigation.

Tolling Arrangement    Tolling of Limitations Periods: Any and all statutes of
limitations, statutes of repose, contractual time limitations, and any other
limitations related to the passage of time, including, without limitation,
laches, estoppel and waiver, applicable to any Breach Claims under common law or
under federal, state and/or local statutory law shall be tolled for a period of
time commencing on the date hereof and ending on the expiration of the one year
anniversary of the obligations to pay Norit royalties pursuant to the Final
Award (the “Tolling Period”). The running of any period of time under any
applicable statute of limitations or any other time-related

 

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   defense applicable to any Breach Claims shall commence again after the end of
the Tolling Period, unless there is an extension of the Tolling Period executed
in writing by and on behalf of the Parties. The Tolling Period shall not be
considered in computing any period of time under any applicable statute of
limitations or any other time-related defense. The Parties shall not to assert
any defense under any applicable statute of limitations or any other
time-related defense except to the extent that such defense is based on periods
of time that are not tolled pursuant to this Agreement or any previous tolling
agreement among any of the Parties. ADA shall not assert that the failure of the
ECP Defendants or the AC Venture Defendants to commence a proceeding during the
Tolling Period gives it any additional grounds for any defense or avoidance with
respect to any Breach Claims. By entering into this Agreement, none of the
Parties makes any admissions or representations with regard to the date or dates
on which any applicable statute of limitations or other time-related defense may
expire or may have expired. This paragraph may not be used as evidence in any
proceeding for any purpose other than to prove that the Parties agreed to a
tolling of time-based defenses, as provided herein. Nothing herein does or shall
be deemed to preclude the ECP Defendants or the AC Venture Defendants from
taking any action with respect to the Norit Litigation, including, without
limitation, the defense and settlement thereof. Option to Participate in New
Projects and Investments   

Notice of New Project or Investment: If the ECP Defendants, the AC Venture
Defendants or their respective Affiliates and Subsidiaries seek to pursue any
new Project (as defined in the JDA) or other investment in which all or a
substantial portion of the revenues are derived from the manufacture and sale of
activated carbon (a “New Investment”), such Person shall present such proposed
New Investment to ADA, including a reasonable description of the proposed New
Investment and the amount of the proposed investment for an equity or other
interest in such New Investment. ADA shall have the option to make a passive
investment in such New Investment as provided below.

 

ADA Option for Passive Investment: ADA shall have the option to elect, by
written notice to the Person proposing such New Investment delivered no more
than 30 days from the date on which the proposed New Investment was first
presented to ADA to make (directly or through a wholly-owned subsidiary) a
corresponding passive investment on an economic 49.9%/50.1% (with ADA having the
minority interest) basis and in the same form (e.g., common stock, preferred
equity or convertible debt) except with respect to voting, control or similar
rights, or in such lesser amount determined by ADA, but in any event not less
than 25% of the total economic investment to be made by the Person proposing the
proposed New Investment (a “Passive Investment”). For the avoidance of doubt,
ADA shall not obtain any voting, control or similar rights in the proposed New
Investment but shall have the option to participate oneconomic terms
proportional to the Person proposing the investment.

 

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   Failure to Respond: If ADA fails to affirmatively elect to invest in such
proposed New Investment within such 30-day period, ADA shall be deemed to have
affirmatively declined to participate in such New Investment and the presenting
Person shall be free to pursue such proposed New Investment independently or
with any other Person.    Exclusions from Option: This option and the notice
provisions of this section shall not apply to the first facility associated with
the Vortex Project.    Option is Non-Transferable: ADA shall not assign the
option to make a passive investment in a New Investment and any attempt to do so
shall be void ab initio.    Termination of Option: ADA’s option to make a
passive investment in New Investments shall expire upon the earliest to occur of
(the “Expiration Date”):   

•      October 1, 2015;

  

•      A Change of Control of ACS; and

  

•      A Change of Control of ADA.

   In addition, ADA’s option to make a passive investment in New Investments
shall expire upon the earliest to occur of a Bankruptcy Event or a Failure to
Pay occurring prior to the Expiration Date; provided, however, that within 60
days of the occurrence of any Failure to Pay, ADA’s option shall be reinstated
if ADA fulfills its obligations that resulted in the Failure to Pay within 60
days of the occurrence of any Failure to Pay.    “Change of Control” means, with
respect to any Person, (a) the sale of all or substantially all of such Person’s
assets in one transaction or series of related transactions, (b) a merger,
consolidation, refinancing or recapitalization as a result of which the holders
of such Person’s issued and outstanding voting securities immediately before
such transaction own or control less than a majority of the voting securities of
the continuing or surviving entity immediately after such transaction and/or
(c) the acquisition (in one or more transactions) by any Person or Persons
acting together or constituting a “group” under Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) together with any
Affiliates thereof (other than equity holders of such Person as of the date
hereof and their respective Affiliates) of beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) or control, directly or indirectly, of at
least a majority of the total voting power of all classes of securities entitled
to vote generally in the election of such Person’s board of directors or similar
governing body.    “Bankruptcy Event” means, with respect to ADA, the occurrence
of one or more of the following events: (a) ADA (i) admits in

 

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writing its inability to pay its debts as they become due, (ii) files, or
consents or acquiesces by answer or otherwise to the filing against it of, a
petition for relief or reorganization or rearrangement, readjustment or similar
relief or any other petition in bankruptcy, for liquidation or to take advantage
of any bankruptcy, insolvency, dissolution, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment for the benefit of
its creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with respect
to any substantial part of its property, (v) is adjudicated as bankrupt or as
insolvent or to be liquidated, (vi) gives notice to any governmental authority
of insolvency or pending insolvency, or (vii) takes corporate action for the
purpose of any of the foregoing; or (b) a court of competent jurisdiction enters
an order appointing, without consent by ADA, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of ADA, or any such petition shall be filed against ADA and is not
dismissed within 60 days.

 

“Failure to Pay” means, with respect to ADA, the failure to pay any payment or
provide any indemnification required pursuant to this Agreement, including,
without limitation, any Royalty Payment, when due or the failure to post or
replenish any letter of credit required pursuant to this Agreement when due,
provided that a “Failure to Pay” shall not occur if ADA makes such payment,
provides such indemnification or posts or replenishes such letter of credit
within 30 days of any such failure.

Drag-Along /Tag-Along

Rights

   Drag-Along and Tag-Along Rights: ADA’s passive investment in any New
Investment shall be subject to and shall benefit from drag-along and tag-along
rights and obligations (including indemnification) substantially similar to the
rights and obligations of Carbon Solutions Management, LLC as of the date of
this Agreement in the ACS LLC Agreement; provided that ADA shall be obligated to
make representations and warranties in any transaction subject to the drag-along
and tag-along rights only to the extent commensurate with ADA’s level of
economic interest in and knowledge of a particular investment. These rights and
obligations shall also apply if there is a Change in Control of ACS. Structure
of New Projects and Investments   

Special Purpose Entity: A special purpose entity, which may, but need not, be a
Subsidiary of ACS, shall be formed for each New Investment. ADA’s passive
economic participation for each New Investment shall be limited to the special
purpose entity formed for the particular New Investment.

 

Relationship Among Projects: The ECP Defendants and the AC Venture Defendants,
at their sole discretion, shall determine from

 

24

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time to time and at any time which Project, including, without limitation, New
Investments, shall be utilized to fulfill particular offtake or other similar
supply contracts and ADA waives any and all claims it may have with respect to
such decisions and the operations of the AC Venture Defendants and any special
purpose entity formed as a result of a New Investment; provided that the limited
liability company agreement or similar document of such special purpose entity
shall not be amended without ADA’s consent in a manner that:

 

•      Modifies the limited liability of ADA;

 

•      Disproportionately and adversely affects the economic interest of ADA in
such entity; or

 

•      Increases ADA’s obligation to commit capital to such entity beyond the
commitment ADA undertakes pursuant to the option provided in this Agreement.

 

Non-Compete

Obligations

  

ADA Non-Compete Obligations: Until the Expiration Date, ADA shall not:

 

•      Compete with the AC Venture Defendants and their Affiliates by selling
activated carbon (other than in conjunction with the AC Venture Defendants and
their Affiliates);

 

•      Other than to Alstom, Siemens or their successors and assigns, sell
activated carbon injection (“ACI”) equipment and systems to any Person that
manufactures, produces or supplies activated carbon to third Persons;

 

•      In connection with selling ACI equipment and systems, enter into any
agreement, arrangement or understanding, including, without limitation, any
joint marketing agreement, license or similar agreement with any Person whereby
ADA or such Person markets or sells such Person’s activated carbon;

 

•      Sell, exchange, lease, license, assign, transfer or otherwise provide any
Intellectual Property of ADA or any of its Affiliates to any Person (other than
to ACS and its Affiliates) to be used in connection with the manufacture,
production, processing and/or supply of activated carbon;

 

•      Except as expressly provided in this Agreement, make any new debt, equity
or other investment in an activated carbon production or supply Project, venture
or company or undertake an investment opportunity in which all or a substantial
portion of the revenues are derived from the manufacture, processing or sale of
activated carbon; and

 

•      Provide consulting or other services to any Person (other than the AC
Venture Defendants and their Affiliates) relating to the manufacture,
production, processing and/or supply of activated carbon.

 

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  Limitation of ADA Non-Compete Obligations: The foregoing notwithstanding,
unless expressly provided below, the non-compete obligations shall not:  

•       Prohibit ADA from selling its ACI equipment and other emission control
systems (as opposed to manufacturing, producing, processing and/or supplying
activated carbon) in transactions not involving the sale or supply of activated
carbon, including, without limitation, to other equipment or systems suppliers.
Notwithstanding the foregoing, the restrictions in the second bullet under the
heading “Non-Compete Obligations” shall still apply.

 

•       Prohibit ADA from providing consulting services to any end user of ACI
or other emissions control equipment or systems (other than such end users that
manufacture, produce, process and/or supply activated carbon) relating to the
manufacture, production, processing and/or supply of activated carbon.

 

•       Prohibit ADA from developing technology primarily for injection of
activated carbon (as opposed to manufacturing, producing, processing and/or
supplying activated carbon) for ADA’s ongoing ACI business;

 

•       Prohibit ADA from processing activated carbon provided by a Person who
acquired an ACI system from ADA or otherwise retained the services of ADA at
such Person’s facility; provided that ADA receives no compensation from any
Person related to the supply of such activated carbon;

 

•       Limit or restrict in any manner ADA’s right to develop new technologies
for applications other than mercury control, including, without limitation,
development of CO2 sequestration technologies that use activated carbon; and

 

•       In connection with selling ACI equipment and systems, prohibit ADA from:

 

•       on any individual project where activated carbon and ACI equipment or
systems are being jointly solicited by a customer, bidding on such equipment or
system project alongside a bid by the AC Venture Defendants and their Affiliates
to supply the activated carbon for such project; or

 

•       purchasing and providing activated carbon to an ADA customer as a backup
for a performance guarantee or otherwise in connection with the sale of an ADA
mercury removal technology other than injection of activated carbon (e.g., sale
of CyClean technology); provided that

 

•       if the AC Venture Defendants and their Affiliates have not committed to
sell 85% of

 

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their then existing capacity, ADA shall purchase and provide such carbon from
the AC Venture Defendants and their Affiliates and the AC Venture Defendants and
their Affiliates agree to quote ADA the lowest price and best terms they have
quoted any customer for comparable activated carbon within the previous 6
months; or

  

•      if the AC Venture Defendants and their Affiliates have committed to sell
85% of their then-existing capacity, ADA may, at its option (i) accept prices
and terms from the AC Venture Defendants and their Affiliates determined in
accordance with the immediately preceding bullet or (ii) obtain a quote on price
and terms from another activated carbon supplier and present that quote to the
AC Venture Defendants and their Affiliates which will have 10 business days to
match such quote whereupon ADA shall be obligated to purchase such carbon from
the AC Venture Defendants and their Affiliates, or, if the AC Venture Defendants
and their Affiliates do not match such quote, ADA may purchase such carbon from
such other supplier on the prices and terms in such other supplier’s quote.

   Joint Marketing Efforts and AC Venture Defendants Non-Compete Obligations:
Until the earlier of (1) the six month anniversary of the date of this Agreement
and (2) the occurrence of any Bankruptcy Event or Failure to Pay (a) the AC
Venture Defendants shall work with ADA and vice versa to jointly market ACI
equipment and systems and activated carbon in the North American coal-fired
utility market and (b) the AC Venture Defendants shall not, in connection with
selling activated carbon, enter into any agreement, arrangement or
understanding, including, without limitation, any joint marketing agreement,
license or similar agreement with any Person whereby the AC Venture Defendants
or such Person markets or sells such Person’s ACI equipment and systems to any
customer in the North American coal-fired utility market.   

The foregoing notwithstanding, the AC Venture Defendants Non-Compete Obligations
shall not:

  

•    Prohibit the AC Venture Defendants from entering into any agreement,
arrangement or understanding, including, without limitation, any joint marketing
agreement, license or similar agreement with any Person whereby the AC Venture
Defendants or such Person markets or sells such Person’s ACI equipment and
systems to customers outside of the North American coal-fired utility market,
including without limitation, the industrial boiler market (including any such
facilities that are used to generate electricity).

 

27

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•    Prohibit the AC Venture Defendants from entering into any agreement,
arrangement or understanding, including, without limitation, any joint marketing
agreement, license or similar agreement with any Person whereby the AC Venture
Defendants or such Person markets or sells such Person’s ACI equipment and
systems to a customer in the North American coal-fired utility market if such
customer specifies the ACI equipment and systems of such Person to the exclusion
of ADA ACI equipment and systems.

 

•    Prohibit the AC Venture Defendants from selling activated carbon in
transactions not involving the sale or supply of ACI equipment and other
emission control systems, including, without limitation, to other activated
carbon manufactures.

Non-Disparagement

   Until the Expiration Date, no Party shall take any action which is intended,
or would reasonably be expected, to harm any other Party’s reputation or which
would reasonably be expected to lead to unwanted or unfavorable publicity to
such Party provided that nothing herein shall prevent any Party from testifying
truthfully in connection with any litigation, arbitration or administrative
proceeding when compelled by subpoena, regulation or court order to do so or
from asserting any right that any Party may have against any other Party in any
litigation, arbitration or administrative proceeding or making any assertion
with respect to any other Party in the Norit Litigation.

Intellectual Property

License Agreement

Amendment

   Concurrently with the execution of this Agreement, ADA and ACS shall execute
an amendment to the Intellectual Property License Agreement in substantially the
form attached hereto as Exhibit A.

Confidentiality

   Confidentiality Obligations: Each Party (as the “Receiving Party”) agrees
that any Confidential Information of the other Party (as the “Disclosing Party”)
received or otherwise obtained in the course of performance under this Agreement
shall be kept strictly confidential by the Receiving Party and only disclosed
(1) to those employees of the Receiving Party who have a need to know in order
to perform the Receiving Party’s obligations hereunder, except that the
Receiving Party may disclose the Disclosing Party’s Confidential Information to
any Affiliate of the Receiving Party for the sole purpose of performing the
Receiving Party’s obligations hereunder and administering and enforcing this
Agreement, (2) to the Parties’ respective attorneys, accountants, professional
advisers, lendors, potential lendors, insurers, trustees and/or other agents who
are required to know of the Settlement Agreement or its terms to carry on the
Parties’ business affairs, including, without limitation, any litigation or
other actions concerning this Agreement (3) solely with respect to the terms and
conditions of this Agreement, to the limited partners and prospective investors
and purchasers of ADA, the ECP

 

28

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  Defendants or the AC Venture Defendants or their respective subsidiaries or
affiliates and (4) as necessary to comply with any Party’s obligation for public
disclosure as a public company; provided that in all cases of (1), (2) and (3),
the Parties shall ensure that any such person is bound by duties or written
obligations of confidentiality. The obligation to maintain the confidence of
Confidential Information shall last for 3 years from the date such information
was provided to the receiving party except with respect to trade secrets of the
disclosing party (which trade secrets will be clearly identified as such), which
obligation shall remain in effect for so long as such information constitutes a
trade secret under applicable law. The Receiving Party shall be responsible for
any of its Affiliates maintaining (or any failure to maintain) the
confidentiality of such Confidential Information of the Disclosing Party. The
Receiving Party further agrees to take the same care with the Disclosing Party’s
Confidential Information as it does with its own. Notwithstanding any of the
foregoing, the Disclosing Party’s Confidential Information does not include
information that the Receiving Party shows: (x) is or becomes public knowledge
without any action by, or involvement of, the Receiving Party or its Affiliates
or agents; (y) is independently developed by the Receiving Party without
reference or access to the Confidential Information of the Disclosing Party and
is so documented or (z) is obtained by the Receiving Party without restrictions
on use or disclosure from a third party who did not receive it, directly or
indirectly, from the Disclosing Party. If the Receiving Party is requested to
disclose any of the Disclosing Party’s Confidential Information pursuant to any
judicial or governmental order, the Receiving Party will promptly notify the
Disclosing Party (unless such notice is prohibited under applicable law or
order) of such order so that the Disclosing Party, in its sole discretion, may
seek an appropriate protective order and/or take any other action to prevent or
minimize the breadth of such disclosure; provided that if the Disclosing Party
is not successful in precluding the requesting legal body from requiring the
disclosure of such Confidential Information, the Receiving Party will furnish
only that portion of such Confidential Information that is legally required and
will exercise all reasonable efforts to obtain reliable assurances that
confidential treatment will be accorded such Confidential Information. Further,
the Receiving Party will provide the Disclosing Party with reasonable
cooperation and assistance in the Disclosing Party’s pursuit of a protective
order or other actions to minimize the breadth of such disclosure.  
“Confidential Information” means (1) all non-public information and material of
any Person, including all trade secrets, confidential information, business and
financial information (including pricing information, business and marketing
plans and proposals, forecasts, revenues, expenses, earnings projections,
customer and supplier lists and information, and sales data), know-how
(including manufacturing and production processes and techniques), research and
development information (including discoveries, ideas,  

 

29

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  inventions, processes, test data, layouts, designs, tools, samples, formulae,
methods, schematics, plans, drawings, data reports, compositions and research
records) and (2) the terms and conditions of this Agreement.   Press Releases:
Notwithstanding the confidentiality obligations in this Section, upon the
execution of this agreement ADA may issue the press release attached hereto as
Exhibit B.

Miscellaneous

Notices. All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission, or if mailed (first class postage prepaid) or
deposited with a reputable overnight courier for next day delivery, to the
Parties at the following addresses or facsimile numbers:

If to ADA-ES, to:

ADA-ES, Inc.

8100 SouthPark Way

Unit B

Littleton, Colorado 80120

Facsimile No.: (303) 734-0330

Attn: President

CC: Corporate Counsel

with a copy (which shall not constitute notice to ADA-ES), to:

Fox Rothschild LLP

997 Lenox Drive

Building 3

Lawrenceville, New Jersey 08543-5231

Facsimile No.: (609) 896-1469

Attn: Jonathan R. Lagarenne

If to any ECP Defendant, to:

Energy Capital Partners, LLC

51 John F. Kennedy Parkway

Suite 200

Short Hills, New Jersey 07078

Facsimile No.: (973) 671-6101

Attn: Tyler Reeder, Vice President

CC: General Counsel

 

30

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with a copy (which shall not constitute notice to the ECP Party), to:

Latham & Watkins LLP

885 Third Avenue

Suite 1000

New York, New York 10022-4834

Facsimile No.: (212) 751-4864

Attn: David A. Kurzweil & David B. Rogers

If to any AC Venture Defendant, to:

ADA Carbon Solutions, LLC

8100 SouthPark Way

Unit A-2

Littleton, Colorado 80120

Facsimile No.: (303) 734-0330

Attn: General Counsel

with a copy (which shall not constitute notice to the ECP Party), to:

Latham & Watkins LLP

885 Third Avenue

Suite 1000

New York, New York 10022-4834

Facsimile No.: (212) 751-4864

Attn: David A. Kurzweil & David B. Rogers

All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this paragraph, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this paragraph, be deemed given upon receipt and (iii) if delivered
by mail or reputable overnight courier in the manner described above to the
address as provided in this paragraph, be deemed given upon receipt (in each
case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this paragraph). Any Party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that Party by giving notice specifying such change to
the other Parties hereto.

Waiver. Any term or condition of this Agreement may be waived at any time by the
Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the Party waiving such term or condition. No waiver by any Party of any term
or condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.

 

31

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Amendment. This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each of the Parties.

Specific Performance. Notwithstanding anything contained herein to the contrary,
each Party to this Agreement acknowledges and agrees that the other Parties
would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each Party to this Agreement agrees that the other
Parties shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the Parties and the
matter in addition to any other remedy to which it may be entitled, at law or in
equity.

No Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of the Parties hereto and their respective
successors or permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights upon any other Person other than any
Person entitled to indemnification pursuant to this Agreement.

No Assignment; Binding Effect. Neither this Agreement nor any right, interest or
obligation hereunder may be assigned by any Party hereto without the prior
written consent of the other Parties hereto and any attempt to do so will be
void, except (i) for assignments and transfers by operation of law and (ii) a
Party may assign any or all of its rights, interests and obligations hereunder
to a wholly-owned Subsidiary, provided that any such Subsidiary agrees in
writing to be bound by all of the terms, conditions and provisions contained
herein, but no such assignment referred to in clause (ii) shall relieve such
Party of its obligations hereunder. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
Parties hereto and their respective successors and assigns.

Headings. The headings used in this Agreement have been inserted for convenience
of reference only and do not define or limit the provisions hereof.

Mutual Drafting. The Parties are sophisticated and have been represented by
attorneys throughout the transactions contemplated hereby who have carefully
negotiated the provisions hereof. As a consequence, the Parties do not intend
that the presumptions of laws or rules relating to the interpretation of
contracts against the drafter of any particular clause should be applied to this
Agreement or any agreement or instrument executed in connection herewith, and
therefore waive their effects.

Governing Law. This Agreement shall be governed by and construed in accordance
with the Laws of the State of Delaware, without giving effect to the conflicts
of laws principles (whether of the State of Delaware or otherwise) that would
result in the application of the laws of any other jurisdiction.

Consent to Jurisdiction and Service of Process; Appointment of Agent for Service
of Process. EACH PARTY TO THIS AGREEMENT HEREBY CONSENTS TO THE JURISDICTION OF
ANY UNITED STATES DISTRICT COURT OR THE STATE COURTS OF DELAWARE LOCATED IN
WILMINGTON, DELAWARE AND IRREVOCABLY

 

32

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AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER SUCH ACTIONS OR
PROCEEDINGS ARE BASED IN STATUTE, TORT, CONTRACT OR OTHERWISE), SHALL BE
LITIGATED IN SUCH COURTS. EACH PARTY (1) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF SUCH COURTS FOR SUCH ACTIONS OR PROCEEDINGS, (2) AGREES
THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION
OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT AND (3) AGREES THAT IT WILL NOT
BRING ANY SUCH ACTION OR PROCEEDING IN ANY COURT OTHER THAN SUCH COURTS. EACH
PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE AND IRREVOCABLE JURISDICTION AND VENUE OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH ACTIONS OR PROCEEDINGS. A COPY OF ANY SERVICE OF PROCESS SERVED UPON
THE PARTIES SHALL BE MAILED BY REGISTERED MAIL TO THE RESPECTIVE PARTY EXCEPT
THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY A
PARTY REFUSES TO ACCEPT SERVICE, EACH PARTY AGREES THAT SERVICE UPON THE
APPROPRIATE PARTY BY REGISTERED MAIL SHALL CONSTITUTE SUFFICIENT SERVICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.

Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY TO THIS
AGREEMENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS
AMONG THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP
THAT IS BEING ESTABLISHED. EACH PARTY ALSO WAIVES ANY BOND OR SURETY OR SECURITY
UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER
PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A SETTLEMENT, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO

 

33

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THE TRANSACTION CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Limitation on Damages. EXCEPT AS PROVIDED IN THE SECTION TITLED “RELEASE OF
CERTAIN KNOWN CLAIMS RELATED TO THE EXISTING ACTIONS”, NO PARTY SHALL BE
RESPONSIBLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES WHATSOEVER WHICH IN ANY WAY ARISE OUT OF, RELATE TO OR ARE A CONSEQUENCE
OF, THE PERFORMANCE OR NONPERFORMANCE BY SUCH PARTY UNDER THIS AGREEMENT, EVEN
IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES EXCEPT IN THE CASE OF FRAUD OR TO
THE EXTENT SUCH DAMAGES WERE AWARDED TO ANY THIRD PARTY IN CONNECTION WITH A
THIRD PARTY CLAIM.

Counterparts. This Agreement may be executed in any number of counterparts, any
of which may be delivered via facsimile or PDF, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.

[Separate Signature Page Attached]

 

34

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by a
duly authorized signature of each Party as of the date first above written.

 

ADA-ES, INC.     ADA ENVIRONMENTAL SOLUTIONS, LLC By:   /s/ C. Jean Bustard    
By:   /s/ C. Jean Bustard Name:   C. Jean Bustard     Name:   C. Jean Bustard
Title:   Chief Operating Officer     Title:   Chief Operating Officer

 

ENERGY CAPITAL PARTNERS, LLC By:     Name:   Peter Labbat Title:   Managing
Member

 

ENERGY CAPITAL PARTNERS I, LP     ENERGY CAPITAL PARTNERS I (CROWFOOT IP), LP
By:   Energy Capital Partners GP I, LLC, its general partner     By:   Energy
Capital Partners GP I, LLC, its general partner By:   Energy Capital Partners,
LLC, its managing member     By:   Energy Capital Partners, LLC, its managing
member By:         By:     Name:   Peter Labbat     Name:   Peter Labbat Title:
  Managing Member     Title:   Managing Member

 

ENERGY CAPITAL PARTNERS I-A, LP     ENERGY CAPITAL PARTNERS I-B IP, LP By:  
Energy Capital Partners GP I, LLC, its general partner     By:   Energy Capital
Partners GP I, LLC, its general partner By:   Energy Capital Partners, LLC, its
managing member     By:   Energy Capital Partners, LLC, its managing member By:
        By:     Name:   Peter Labbat     Name:   Peter Labbat Title:   Managing
Member     Title:   Managing Member

 

ADA CARBON SOLUTIONS, LLC     ADA CARBON SOLUTIONS (RED RIVER), LLC       By:  
ADA Carbon Solutions, LLC, its sole member By:         By:     Name:   Peter O.
Hansen     Name:   Peter O. Hansen Title:   General Counsel     Title:   General
Counsel

[Signature Page to Settlement Agreement Regarding

ADA-ES’ Indemnity Obligations]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by a
duly authorized signature of each Party as of the date first above written.

 

ADA-ES, INC.     ADA ENVIRONMENTAL SOLUTIONS, LLC By:         By:     Name:    
  Name:  

Title:

     

Title:

 

 

ENERGY CAPITAL PARTNERS, LLC By:   /s/ Peter Labbat Name:   Peter Labbat Title:
  Managing Member

 

ENERGY CAPITAL PARTNERS I, LP     ENERGY CAPITAL PARTNERS I (CROWFOOT IP), LP
By:   Energy Capital Partners GP I, LLC, its general partner     By:   Energy
Capital Partners GP I, LLC, its general partner By:   Energy Capital Partners,
LLC, its managing member     By:   Energy Capital Partners, LLC, its managing
member By:   /s/ Peter Labbat     By:   /s/ Peter Labbat Name:   Peter Labbat  
  Name:   Peter Labbat Title:   Managing Member     Title:   Managing Member

 

ENERGY CAPITAL PARTNERS I-A, LP     ENERGY CAPITAL PARTNERS I-B IP, LP By:  
Energy Capital Partners GP I, LLC, its general partner     By:   Energy Capital
Partners GP I, LLC, its general partner By:   Energy Capital Partners, LLC, its
managing member     By:   Energy Capital Partners, LLC, its managing member By  
/s/ Peter Labbat     By:   /s/ Peter Labbat Name:   Peter Labbat     Name:  
Peter Labbat Title   Managing Member     Title   Managing Member

 

ADA CARBON SOLUTIONS, LLC     ADA CARBON SOLUTIONS (RED RIVER), LLC       By:  
ADA Carbon Solutions, LLC, its sole member By:         By:     Name:   Peter O.
Hansen     Name:   Peter O. Hansen Title:   General Counsel     Title:   General
Counsel

[Signature Page to Settlement Agreement Regarding ADA-ES’ Indemnity Obligations]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by a
duly authorized signature of each Party as of the date first above written.

 

ADA-ES, INC.     ADA ENVIRONMENTAL SOLUTIONS, LLC By:         By:     Name:    
  Name:  

Title:

     

Title:

 

 

ENERGY CAPITAL PARTNERS, LLC By:     Name:   Peter Labbat Title:   Managing
Member

 

ENERGY CAPITAL PARTNERS I, LP     ENERGY CAPITAL PARTNERS I (CROWFOOT IP), LP
By:   Energy Capital Partners GP I, LLC, its general partner     By:   Energy
Capital Partners GP I, LLC, its general partner By:   Energy Capital Partners,
LLC, its managing member     By:   Energy Capital Partners, LLC, its managing
member By:         By:     Name:   Peter Labbat     Name:   Peter Labbat Title:
  Managing Member     Title:   Managing Member

 

ENERGY CAPITAL PARTNERS I-A, LP     ENERGY CAPITAL PARTNERS I-B IP, LP By:  
Energy Capital Partners GP I, LLC, its general partner     By:   Energy Capital
Partners GP I, LLC, its general partner By:   Energy Capital Partners, LLC, its
managing member     By:   Energy Capital Partners, LLC, its managing member By:
        By:     Name:   Peter Labbat     Name:   Peter Labbat Title:   Managing
Member     Title:   Managing Member

 

ADA CARBON SOLUTIONS, LLC     ADA CARBON SOLUTIONS (RED RIVER), LLC       By:  
ADA Carbon Solutions, LLC, its sole member By:   /s/ Peter O. Hansen     By:  
/s/ Peter O. Hansen Name:   Peter O. Hansen     Name:   Peter O. Hansen Title:  
General Counsel     Title:   General Counsel

[Signature Page to Settlement Agreement Regarding

ADA-ES’ Indemnity Obligations]

--------------------------------------------------------------------------------

 

MORTON ENVIRONMENTAL PRODUCTS, LLC     UNDERWOOD ENVIRONMENTAL PRODUCTS, LLC By:
  ADA Carbon Solutions, LLC, its sole member     By:   ADA Carbon Solutions,
LLC, its sole member By:   /s/ Peter O. Hansen     By:   /s/ Peter O. Hansen
Name:   Peter O. Hansen     Name:   Peter O. Hansen Title:   General Counsel    
Title:   General Counsel

 

CROWFOOT SUPPLY COMPANY, LLC     FIVE FORKS MINING, LLC By:   ADA Carbon
Solutions, LLC, its sole member     By:   ADA Carbon Solutions, LLC, its sole
member By:   /s/ Peter O. Hansen     By:   /s/ Peter O. Hansen Name:   Peter O.
Hansen     Name:   Peter O. Hansen Title:   General Counsel     Title:   General
Counsel

[Signature Page to Settlement Agreement Regarding

ADA-ES’ Indemnity Obligations]

--------------------------------------------------------------------------------

Exhibit A

Amendment No. 1 to Intellectual Property License Agreement

(see attached)

 

A - 1

--------------------------------------------------------------------------------

EXECUTION VERSION

AMENDMENT NO. 1 TO INTELLECTUAL PROPERTY LICENSE AGREEMENT

THIS AMENDMENT NO. 1 TO INTELLECTUAL PROPERTY LICENSE AGREEMENT (this
“Amendment”), entered into this 28th day of November, 2011, is made by and
between the undersigned and amends that certain Intellectual Property License
Agreement, dated as of October 1, 2008 (the “License Agreement”), by and between
ADA-ES, Inc. and ADA Carbon Solutions, LLC (f/k/a Crowfoot Development Company,
LLC) (individually, a “Party,” and, collectively, the “Parties”). Capitalized
terms used and not otherwise defined in this Amendment will have the meanings
set forth in the License Agreement, including as incorporated by reference
therein.

RECITALS

WHEREAS, the Parties have heretofore entered into the License Agreement and
desire to amend the License Agreement in accordance with Section 7.3 thereof as
more fully set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:

1. Amendments. The License Agreement is hereby amended as follows:

(a) Section 1.1 of the License Agreement is hereby amended by adding the
following definitions such that the new definitions are incorporated in
alphabetical order:

“Expanded Field” means the manufacture, production or formulation of
(i) activated carbon or (ii) any activated carbon/additive mixture, in the case
of (i) and (ii), for any market other than the Field.

“New Expanded Field IP” means the Intellectual Property of Licensor and its
Affiliates other than Excluded Affiliates acquired or developed during the
Future Licensing Period that (i) could have been used, (ii) was used or
(iii) based on any future change in circumstance (such as a technological
improvement), could have been used if such change in circumstance was in
existence during the Future Licensing Period, in the case of (i), (ii) and
(iii), in the Expanded Field. For the avoidance of doubt, the New Expanded Field
IP expressly excludes any technology of Licensor for treating coal with
additives prior to or in a combustion chamber for the purpose of reducing
mercury emissions or other pollutant emissions from the combustion of the coal.

(b) Section 1.1 of the License Agreement is hereby amended by amending and
restating the following definitions to read in their entirety as follows:

“Excluded Affiliates” means any Affiliate that is (i) a natural person, (ii) an
upstream Affiliate of Licensor that holds directly or indirectly less than Fifty

--------------------------------------------------------------------------------

Percent, or (iii) a downstream Affiliate of Licensor of which Licensor holds
directly or indirectly less than Fifty Percent, including Clean Coal Solutions,
LLC and its subsidiaries. “Fifty Percent” means 50% of the total number of
outstanding common or other equity interests (however denominated) of such
Person, 50% of the total voting power of all outstanding equity interests of
such Person which are entitled to vote in the election of directors, managers or
other persons performing similar functions for and on behalf of such Person, 50%
of the dividends paid and other distributions made by such Person prior to
liquidation or 50% of the assets of such Person or proceeds from the sale
thereof upon liquidation.

“Future Licensing Period” means the period commencing after the Closing and
ending on November 28, 2011.

“Licensed Intellectual Property” means (i) the Intellectual Property of Licensor
and its Affiliates as of the Closing used or held for use in connection with the
Business or otherwise relating to the ADA-ES Contributed Assets and/or the
Underlying Assets, including (x) the Intellectual Property listed on Schedule A
attached hereto, and (y) After-Filed Patents, (ii) the New IP and (iii) the New
Expanded Field IP; provided, however, that “Licensed Intellectual Property”
shall not include any (A) Transferred Intellectual Property, or (B) any
Trademarks.

None of the definitions in paragraphs (a) or (b) of this Amendment shall be
relied upon by any Party to this Amendment or the License Agreement to construe
or otherwise interpret any other definition in the License Agreement.

(c) Section 2.1 of the License Agreement is hereby amended and restated in its
entirety to read as follows:

Effective as of the Closing, on the terms and conditions set forth herein,
Licensor hereby grants to Licensee and its Affiliates a perpetual, worldwide,
royalty-free, fully paid up, exclusive license to use the Licensed Intellectual
Property (other than the New IP and the New Expanded Field IP) in the Field.
Effective as of the Closing, on the terms and conditions set forth herein,
Licensor hereby grants to Licensee and its Affiliates a perpetual, worldwide,
royalty-free, fully paid up, non-exclusive license to use the Licensed
Intellectual Property (other than the New IP and the New Expanded Field IP) in
the Expanded Field. Effective as of the date of acquisition or development of
any New IP, on the terms and conditions set forth herein, Licensor hereby grants
to Licensee and its Affiliates a perpetual, worldwide, royalty-free, fully paid
up, exclusive license to use such New IP in connection with the Field. Effective
as of the date of acquisition or development of any New IP or New Expanded Field
IP, on the terms and conditions set forth herein, Licensor hereby grants to
Licensee and its Affiliates a perpetual, worldwide, royalty-free, fully paid up,
non-exclusive license to use such New IP and New Expanded Field IP in connection
with the Field and the Expanded Field. The foregoing licenses include the right
(a) to make, have made, use, import, export, distribute, offer to sell and sell
products

 

2

--------------------------------------------------------------------------------

under the Licensed Intellectual Property, and (b) to publish, display,
reproduce, copy, modify, improve, create derivative works of, enhance, and
otherwise exploit such Licensed Intellectual Property. Licensee and its
Affiliates may sublicense the Licensed Intellectual Property (x) to any Person
owning a Project (each, a “Project Company”) and (y) solely as is reasonably
necessary in connection with (A) the receipt of goods and services by, or
(B) the use of activated carbon sold or otherwise transferred by, Licensee, any
of its Affiliates and/or any Project Company, but are not otherwise
sublicensable. Licensor shall promptly advise Licensee in writing of any
acquisition or development of any New IP. For the avoidance of doubt, nothing in
this Agreement shall prohibit Licensor from using the Licensed Intellectual
Property for applications or other uses that are outside the Field.

(d) Section 2.2 of the License Agreement is hereby amended by deleting the last
sentence of such section and replacing it with the following:

Licensee shall have the right to commence, on or prior to November 28, 2012,
upon reasonable notice to Licensor and during normal business hours, a
confidential audit and inspection of the books and records of Licensor and its
Affiliates (other than Excluded Affiliates) (and to make confidential copies
thereof) relating to the acquisition and development of New IP, Additional IP
and New Expanded Field IP, and, in connection therewith, shall be provided on a
confidential basis (at Licensee’s option, either in electronic (to the extent
available) or hard copy) (i) copies of all documentation that is in Licensor’s
or any of its Affiliate’s (other than Excluded Affiliates) possession or control
and constitutes such Licensed Intellectual Property and/or is reasonably
necessary for the use of such Licensed Intellectual Property and (ii) tangible
embodiments of such Licensed Intellectual Property (including copies of all
Software included in such Licensed Intellectual Property) that is in Licensor’s
or any of its Affiliate’s (other than Excluded Affiliates) possession or
control; provided, however, that if any Member of Licensee is a Competitor, no
such right of audit shall apply. For the avoidance of doubt, any confidential
information provided to Licensee pursuant to this Section 2.2 shall be subject
to Article V and may be provided to Licensee’s Affiliates, directors, officers,
employees, agents, auditors, consultants, financial advisors, financing sources
(whether actual or potential) and permitted sublicensees, in each case, subject
to Article V.

(e) Section 2.3(a) of the License Agreement is hereby amended by deleting the
words “last sentence” from the last sentence of such subsection and adding the
following sentence to the end of such subsection:

For the avoidance of doubt, any confidential information provided to Licensee
pursuant to this Section 2.3(a) shall be subject to Article V and may be
provided to Licensee’s Affiliates, directors, officers, employees, agents,
auditors, consultants, financial advisors, financing sources (whether actual or
potential) and permitted sublicensees, in each case, subject to Article V.

 

3

--------------------------------------------------------------------------------

(f) Section 2.3 of the License Agreement is hereby amended by adding the
following subsection (d):

(d) The Parties agree that, notwithstanding anything to the contrary in this
Section 2.3, any license to use Additional IP entered into between the Parties
pursuant to this Section 2.3 will provide that the Licensee and its Affiliates
may sublicense the Licensed Intellectual Property (x) to any Project Company and
(y) solely as reasonably necessary in connection with (A) the receipt of goods
and services by, or (B) the use of activated carbon sold or otherwise
transferred by, Licensee, any of its Affiliates and/or any Project Company, but
is not otherwise sublicensable.

(g) A new Section 2.4 of the License Agreement is hereby added as follows:

Section 2.4 No Alteration of Rights. The license granted with respect to the New
Expanded Field IP pursuant to Section 2.1 in no way expands, limits or otherwise
alters the rights and obligations of the Parties pursuant to Section 2.3.

(h) Section 6.1 of the License Agreement is hereby amended by deleting the
heading and the first sentence of such section and replacing it with the
following:

Section 6.1 Warranties and Excluded Warranties. LICENSOR WARRANTS THAT: (A) IT
HAS THE RIGHT TO GRANT THE LICENSES AND RIGHTS GRANTED HEREIN AND TO ENTER INTO
THIS AGREEMENT; (B) THAT DURING THE FUTURE LICENSING PERIOD IT HAS NOT SOLD,
ASSIGNED OR TRANSFERRED ANY LICENSED INTELLECTUAL PROPERTY TO AN EXCLUDED
AFFILIATE OTHER THAN LICENSEE; AND (C) ITS ONLY DOWNSTREAM EXCLUDED AFFILIATES
DURING THE FUTURE LICENSING PERIOD ARE CLEAN COAL SOLUTIONS, LLC, CLEAN COAL
SOLUTIONS SERVICES, LLC, LICENSEE AND EACH OF THEIR RESPECTIVE DIRECT AND
INDIRECT SUBSIDIARIES.

The remainder of Section 6.1 is unchanged.

(i) Section 7.13 of the License Agreement is hereby amended and restated in its
entirety to read as follows:

Section 7.13 Binding on Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and Licensee’s Affiliates and
permitted sublicensees, and their respective successors and permitted assigns
including, without limitation, an Excluded Affiliate if, and to the extent, it
succeeds to Licensor’s ownership rights in or to use any Licensed Intellectual
Property; .

(j) The address of Licensee in Section 7.1 of the License Agreement is hereby
amended and restated in its entirety to read as follows:

 

4

--------------------------------------------------------------------------------

ADA Carbon Solutions, LLC

8100 SouthPark Way

Unit A-2

Littleton, Colorado 80120

Facsimile No.: (303) 734-0330

Attention: General Counsel

and concurrently to:

ADA Carbon Solutions, LLC

c/o Energy Capital Partners, LLC

51 John F. Kennedy Parkway

Suite 200

Short Hills, New Jersey 07078

Facsimile No.: (973) 671-6101

Attn: Tyler Reeder, Vice President

CC: General Counsel

with a copy (which shall not constitute notice to Licensee), to:

Fox Rothschild LLP

997 Lenox Drive

Building 3

Lawrenceville, New Jersey 08543-5231

Facsimile No.: (609) 896-1469

Attn: Jonathan R. Lagarenne

with a copy (which shall not constitute notice to Licensee), to:

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022-4834

Facsimile No.: (212) 751-4864

Attn: David B. Rogers & David A. Kurzweil

(k) Article VII of the License Agreement is hereby amended by adding the
following Section 7.14:

Section 7.14 Licensed Rights. The Parties acknowledge and agree that any and all
rights licensed pursuant to this Agreement shall be deemed to be a license of
rights to “intellectual property” as defined under §101 of the U.S. Bankruptcy
Code and, in connection therewith, §365(n) of the U.S. Bankruptcy Code shall be
implicated by any rejection or proposed rejection of this Agreement in any
bankruptcy proceeding.

2. Effectiveness of this Amendment. This Amendment is effective immediately;
provided, however, that if that certain Settlement Agreement executed
substantially concurrently

 

5

--------------------------------------------------------------------------------

with this Amendment by and among certain parties to American Arbitration
Association arbitration Case No. 30-192-Y-00718-09 is rendered null and void ab
initio pursuant to Section 9(a) thereof, this Amendment shall be null and void
ab initio, no Party shall have any rights or obligations hereunder and the
License Agreement shall be deemed to have never been amended and shall remain in
full force and effect.

3. Miscellaneous.

(a) Except as specifically amended by this Amendment, the terms and conditions
of the License Agreement shall remain in full force and effect.

(b) This Amendment shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to a contract executed and performed in
such State, without giving effect to conflicts of laws principles (whether of
the State of Delaware or otherwise) that would result in the application of the
laws of any other state.

. (c) This Amendment may be executed in any number of counterparts, any of which
may be delivered via facsimile or PDF, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument.

(d) Each Party hereto agrees to execute and deliver, or cause to be executed and
delivered, such further instruments or documents or take such other actions as
may be reasonably necessary to consummate the transactions contemplated by this
Amendment.

[Signature Page Follows]

 

6

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned have executed this Amendment, effective as
of the date first written above.

 

ADA-ES, INC. By:     Name:   Title:  

 

ADA CARBON SOLUTIONS, LLC By:     Name:   Peter O. Hansen Title:   General
Counsel

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO INTELLECTUAL PROPERTY LICNESE AGREEMENT]

--------------------------------------------------------------------------------

Exhibit B

ADA Press Release

(see attached)

 

B—1

--------------------------------------------------------------------------------

 

LOGO [g280680g97b45.jpg]

FOR IMMEDIATE RELEASE

ADA-ES ANNOUNCES SETTLEMENT WITH ENERGY CAPITAL PARTNERS

Company Relinquished Equity in Activated Carbon Plant and Will Make Cash
Payments of $3.6 Million

to Satisfy Over $30 Million in Claimed Indemnity Obligations

Littleton, CO—November 28, 2011—ADA-ES, Inc. (NASDAQ:ADES) (“ADA” or “Company”)
today announced that it has entered into an Indemnity Settlement Agreement with
Energy Capital Partners LP and its affiliates (“ECP”) and ADA Carbon Solutions,
LLC (“ACS”) and certain of ACS’ affiliates (together the “AC JV Entities”)
pursuant to which the parties have agreed to settle certain indemnity claims
arising out of the litigation between Norit Americas, Inc. and Norit
International N.V. f/k/a Norit N.V. (collectively “Norit”), ECP and the AC JV
Entities in Texas and New Jersey and the related arbitration (collectively, the
“Norit Litigation”) based on ADA’s indemnity obligations under the Joint
Development Agreement between ADA and ECP dated as of October 1, 2008. The
primary litigation took place before an arbitration panel, which rendered its
Final Award in October 2011, confirming the prior settlement agreements reached
with Norit.

Pursuant to the Indemnity Settlement Agreement, ADA agreed to settle certain
indemnity claims asserted against the Company for legal fees, costs and expenses
arising out of the Norit Litigation in the amount of approximately $33 million
and certain other losses. To settle the claims, ADA paid certain AC JV Entities
a cash payment of $2.1 million on November 28, 2011, agreed to $1.5 million in
additional payments, agreed to secure the payment of future royalty amounts due
to Norit under the Final Award and settlement agreements with Norit through
letters of credit and relinquished all of its 21.3% equity interests in the AC
JV Entities which operate an activated carbon (“AC”) plant located in Red River,
Louisiana.

In its Form 10-Q for the quarter ended September 30, 2011, ADA reported a net
investment in ACS of $7.7 million as of that date and equity interest in ACS’
net loss for the nine months then ended totaling $5.9 million. ADA expects to
record in the fourth quarter of 2011 the transactions resulting from the
Indemnity Settlement Agreement for the satisfaction of the indemnity obligations
and the relinquishment of its interest in ACS, which will result in other income
of approximately $18.7 million.

As part of the agreement, ADA preserves the right for a 49.9% participation, on
a passive basis, in AC production lines that ACS may build in the future. The
Company believes that the new Federal regulations to limit mercury emissions
from coal-fired boilers, which are scheduled to be made final in December of
this year, will create a significant market for additional AC production lines.

Dr. Michael D. Durham, President and CEO of ADA, commented, “We are pleased with
the results of this settlement agreement as it allows us to focus our efforts on
the exciting opportunities we have with two different Refined Coal technologies
and rapidly developing new markets for our emissions control systems. In
response to new and pending regulations, we are submitting a number of bids for
AC injection systems and dry sorbent injection (DSI) equipment. In addition, the
option to participate in future AC production plants with ACS and ECP creates an
opportunity to further profit from our position in the mercury control market.”

--------------------------------------------------------------------------------

ADA-ES News Release

November 28, 2011

About ADA-ES

ADA-ES is a leader in clean coal technology and the associated specialty
chemicals, serving the coal-fueled power plant industry. Our proprietary
environmental technologies and specialty chemicals enable power plants to
enhance existing air pollution control equipment, minimize mercury, CO2 and
other emissions, maximize capacity, and improve operating efficiencies, to meet
the challenges of existing and pending emission control regulations.

With respect to mercury emissions:

 

  •  

We supply activated carbon (“AC”) injection systems, mercury measurement
instrumentation, and related services.

 

  •  

Under an exclusive development and licensing agreement with Arch Coal, we are
developing and commercializing an enhanced Powder River Basin (“PRB”) coal with
reduced emissions of mercury and other metals.

 

  •  

Through our consolidated subsidiary, Clean Coal Solutions, LLC (“CCS”), we
provide our patented refined coal technology, CyClean, to enhance combustion of
and reduce emissions from burning PRB coals in cyclone boilers and expect to
provide our patent pending refined coal technology M-45 which both reduce
emissions of NOx and mercury in coal fired boilers.

In addition, we are developing CO2 emissions technologies under projects funded
by the U.S. Department of Energy (“DOE”) and industry participants.

This press release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, which provides a “safe
harbor” for such statements in certain circumstances. The forward-looking
statements include statements or expectations regarding the creation of
additional markets for AC through Federal regulation, timing of finalization of
the Federal regulations to limit mercury emissions from coal-fired boilers,
expected accounting treatment of the settlement and the opportunity for future
profits from participation in future AC production plants and our position in
the mercury control market. Actual events or results could differ materially
from those discussed in the forward-looking statements as a result of various
factors, including but not limited to, changes in laws and regulations,
availability of government funding, prices, economic conditions and market
demand, timing and impact of new and pending laws and regulations and any legal
challenges to them, the impact of competition, availability, cost of and demand
for alternative energy sources and other technologies, technical, start-up and
operational difficulties, inability to commercialize our technologies on
favorable terms; our inability to ramp up our operations to effectively address
expected growth in our target markets, availability of raw materials and
equipment for our businesses; loss of key personnel, intellectual property
infringement claims from third parties; and other factors that we discuss in
greater detail in our filings with the Securities and Exchange Commission (SEC).
You are cautioned not to place undue reliance on our forward-looking statements
and to consult filings we make with the SEC for additional risks and
uncertainties that may apply to our business and the ownership of our
securities. Our forward-looking statements are presented as of the date made,
and we disclaim any duty to update such statements unless required by law to do
so.

 

Contacts:    ADA-ES, Inc.    Investor Relations Counsel Michael D. Durham,
Ph.D., MBA, President & CEO    The Equity Group Inc. Mark H. McKinnies, CFO   
www.theequitygroup.com (303)734-1727    Devin Sullivan www.adaes.com   
(212)836-9608    DSullivan@equityny.com

 

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