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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action
No. 14-cv-01243-CMA-KMT (Consolidated for all purposes with Civil Action No.
14-cv-01402-CMA-KMT) UNITED FOOD AND COMMERCIAL WORKERS UNION AND PARTICIPATING
FOOD INDUSTRY EMPLOYERS TRI-STATE PENSION FUND, Individually and on behalf of
all others similarly situated, Plaintiff, v. ADVANCED EMISSIONS SOLUTIONS, INC.,
et al., Defendants.
______________________________________________________________________
STIPULATION AND AGREEMENT OF SETTLEMENT
______________________________________________________________________

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2 This Stipulation and Agreement of Settlement (“Settlement”) is made and
entered into by and among (i) Lead Plaintiff, on behalf of itself and each of
the Class Members, by and through Lead Counsel; and (ii) Defendants, by and
through their counsel. This Settlement is intended by the Settling Parties to
fully, finally and forever compromise, resolve, discharge and settle the
Released Claims and result in the complete dismissal of this Action with
prejudice, upon and subject to the approval of the Court and the terms and
conditions herein, without any admission or concession as to the merits of any
of the Settling Parties’ claims or defenses.1 WHEREAS: A. All terms with initial
capitalization shall have the meanings ascribed to them in Paragraph 1 below or
as otherwise defined herein. B. On May 1, 2014, plaintiff Karen Barnwell filed a
class action complaint, Civil Action No. 14-cv-01243 (Dkt. 1), against Advanced
Emissions Solutions, Inc. (“ADES” or the “Company”), and five of its current or
former officers, Michael D. Durham, Mark H. McKinnies, C. Jean Bustard, Sharon
M. Sjostrom, and Christine B. Amrhein (the “Individual Defendants”), in the
United States District Court for the District of Colorado (the “Court” or
“District Court”), on behalf of a putative class comprising purchasers of the
Company’s common stock between March 14, 2013 and March 12, 2014, asserting
claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
(the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 1 The terms
Lead Plaintiff, Class Members, Lead Counsel, Defendants, Settling Parties,
Released Claims, and Action are defined herein.

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3 promulgated thereunder by the Securities and Exchange Commission (“SEC”), 17
C.F.R. § 240.10b-5. The case was assigned to the Honorable Christine M.
Arguello. C. On May 19, 2014, plaintiff Evan Pawloski filed a substantially
similar class action complaint, Civil Action No. 14-cv-01402 (Dkt. 1) in the
same Court against ADES, and two of its current or former officers, Michael D.
Durham and Mark H. McKinnies, with a proposed class period of March 14, 2013 to
April 23, 2014. This case was also assigned to the Honorable Christine M.
Arguello. D. On February 19, 2015, the Court consolidated the two actions,
appointed United Food and Commercial Workers Union and Participating Food
Industry Employers Tri-State Pension Fund (“UFCW Tri-State”) as Lead Plaintiff,
and approved Lead Plaintiff’s selection of Shepherd Finkelman, Miller, & Shah,
LLP as Lead Counsel and the Edgar Law Firm, LLC, as Liaison Counsel in the
consolidated action (the “Action”) (Dkt. 29). E. On April 20, 2015, Lead
Plaintiff filed a Consolidated Amended Class Action Complaint (“First Amended
Complaint”) (Dkt. 35). The First Amended Complaint alleged: (1) that ADES and
Individual Defendants Durham and McKinnies made material misrepresentations and
omissions in violation of Section 10(b) and Rule 10b-5 of the Exchange Act; and
(2) that Individual Defendants Durham, McKinnies, Bustard, Sjostrom, Amrhein, as
well as an additional defendant, L. Heath Sampson, are liable for ADES’s primary
violations of the Exchange Act as alleged “control persons” of the Company
within the meaning of Section 20(a) of the Exchange Act. F. On June 19, 2015,
Defendants filed a Motion to Dismiss the First Amended Complaint Under Federal
Rule of Civil Procedure 12(b)(6). (Dkt. 36.) The

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4 Lead Plaintiff filed a Response to the Motion to Dismiss on July 2, 2015 (Dkt.
40), and the Defendants filed a Reply in support of the Motion to Dismiss on
July 16, 2015 (Dkt. 42). G. On March 7, 2016, before an order was entered on the
Motion to Dismiss, the parties filed a Stipulated Motion to Stay Under
D.C.COLO.LCivR 16.6 to allow them time to mediate the dispute. (Dkt. 54). On
March 8, 2016, the District Court granted the parties’ Stipulated Motion to Stay
(Dkt. 55). H. On May 16, 2016, the Lead Plaintiff filed a Second Amended
Consolidated Class Action Complaint (“Second Amended Complaint”). The Second
Amended Complaint continued to name ADES, Durham, McKinnies, Bustard, Sjostrom,
Amrhein, and Sampson as Defendants, in the District Court, on behalf of a
putative class comprised of purchasers of the Company’s common stock between May
12, 2011 and January 29, 2015. The Second Amended Complaint continues to assert
claims under Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5
promulgated thereunder. I. On May 24, 2016, counsel for the Lead Plaintiff,
Defendants, and Defendants’ insurers participated in a mediation under the
auspices of Jed Melnick of JAMS. Pursuant to Mr. Melnick’s instructions, the
parties submitted detailed mediation statements in advance of the mediation
session. As a result of the arm’s-length negotiations at that mediation, the
parties (including Defendants’ insurers) agreed in principle to settle the
Action for $3,950,000, subject to the approval of the Court. J. Lead Counsel and
Lead Plaintiff have concluded, after due investigation and after carefully
considering the relevant circumstances, including, without limitation, the
claims asserted in the Action, the legal and factual defenses thereto, and the

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5 applicable law, that (i) it is in the best interests of the Class (defined
below) to enter into this Settlement in order to avoid the uncertainties of
litigation and to ensure that the benefits reflected herein are obtained for the
Class and (ii) the Settlement set forth herein is fair, reasonable and adequate
and in the best interests of the Class Members. K. Defendants believe that they
are not liable for the claims asserted against them in the Action and that they
have good and meritorious defenses thereto. They have nevertheless agreed to
enter into this Settlement to avoid further expense, inconvenience, and the
distraction of burdensome and protracted litigation, and thereby to put to rest
this controversy and avoid the risks inherent in litigation. NOW THEREFORE, IT
IS HEREBY STIPULATED AND AGREED, by and among the Settling Parties, through
their respective counsel of record, that, subject to the approval of the
District Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure,
the Private Securities Litigation Reform Act, 15 U.S.C. § 78u-4 and other
conditions set forth herein, in consideration of the benefits flowing to the
Settling Parties hereto, that the Action and all Released Claims as against the
Released Parties shall be fully, finally and forever compromised, settled,
released, discharged and dismissed with prejudice, upon and subject to the
following terms and conditions: I. DEFINITIONS 1. As used in this Settlement,
the following terms shall have the meanings specified below. In the event of any
inconsistency between any definition set forth below and any definition set
forth in any document attached as an exhibit to this Settlement, the definition
set forth below shall control.

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6 a) “Action” means the action pending in this Court under the caption United
Food and Commercial Workers Union and Participating Food Industry Employers Tri-
State Pension Fund v. Advanced Emissions Solutions, Inc., et al., Case No.
14-cv- 01402-CMA-KMT (D. Colo.), including, without limitation, all cases
consolidated under that caption. b) “Authorized Claimant(s)” means a Class
Member that timely submits a valid Proof of Claim Form to the Claims
Administrator in accordance with the requirements established by the Court, and
that is approved by the Claims Administrator for payment from the Net Settlement
Fund. c) “Claim(s)” means a claim submitted by a Class Member to the Claims
Administrator for payment pursuant to the Plan of Allocation. d) “Claims
Administrator” means Strategic Claims Services. e) “Class” means, for purposes
of this Settlement, and to be certified pursuant to Fed. R. Civ. P. 23, for
purposes of effectuating this Settlement only, all persons and entities who
purchased or otherwise acquired the common stock of Advanced Emissions
Solutions, Inc. (ticker symbol: ADES) between May 12, 2011 and January 29, 2015,
both dates inclusive. Excluded from the Class are: i) Defendants, directors,
officers and other employees of ADES, their families and affiliates, any
entities in which any of the Defendants have a controlling interest, the legal
representatives, heirs, successors, predecessors-in-interest, affiliates or
assigns of any of the Defendants, and the Judge(s) to whom this case is
assigned; and ii) any putative members of the Class who timely and validly
exclude themselves from the Class in

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7 accordance with the requirements set forth in the Mailed Notice and Rule 23 of
the Federal Rules of Civil Procedure. f) “Class Distribution Order” means an
order entered by the Court authorizing and directing that the Net Settlement
Fund be distributed, in whole or in part, to eligible Class Members. g) “Class
Member(s)” means a person or entity that is a member of the Class. h) “Class
Period” means the period from May 12, 2011 and January 29, 2015, both dates
inclusive. i) “Defendants” means Advanced Emissions Solutions, Inc., Michael D.
Durham, Mark H. McKinnies, C. Jean Bustard, Sharon M. Sjostrom, Christine B.
Amrhein and L. Heath Sampson (each is a “Defendant” and collectively referred to
as the “Defendants”). j) “Defendants’ Counsel” means the law firms of Gibson,
Dunn & Crutcher LLP; Fortis Law Partners LLP (counsel for ADES, Michael D.
Durham, C. Jean Bustard, Sharon M. Sjostrom, Christine B. Amrhein and L. Heath
Sampson), and Morrison & Foerster LLP (counsel for Mark H. McKinnies). k)
“Effective Date” means the first day on which the Settlement shall become
effective as set forth in ¶ 43 below. Lead Counsel shall advise Defendants’
Counsel and the Claims Administrator promptly after it has determined that it
believes the Effective Date has occurred.

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8 l) “Escrow Account” means an escrow account established, maintained, and
controlled by the Escrow Agent, subject to Lead Counsel’s supervisory authority,
into which Defendants shall deposit or cause to be deposited the Settlement
Amount. m) “Escrow Agent” means the Claims Administrator. n) “Final” means, with
respect to any order of the Court, including, without limitation, the Judgment,
that such order represents a final and binding determination of all issues
within its scope and is not subject to further review on appeal or otherwise.
Without limitation, an order becomes “Final” when (i) no appeal has been filed
and the prescribed time for commencing any appeal has expired; or (ii) an appeal
has been filed and either (a) the appeal has been dismissed and the prescribed
time, if any, for commencing any further appeal has expired, or (b) the order
has been affirmed in all material respects and the prescribed time, if any, for
commencing any further appeal has expired. For purposes of this paragraph, an
“appeal” includes appeals as of right, discretionary appeals, interlocutory
appeals, proceedings involving writs of certiorari or mandamus, and any other
proceedings of like kind. However, any appeal or proceeding seeking subsequent
judicial review pertaining solely to the Class Distribution Order, the Plan of
Allocation, or to the Court’s award of Lead Counsel’s fees and/or expenses shall
not in any way delay or affect the time set forth above for the Judgment to
become Final. o) “Final Approval Hearing” means the hearing set by the Court
under Rule 23(e) of the Federal Rules of Civil Procedure to consider final
approval of the Settlement, Lead Counsel’s request for an award of attorneys’
fees, and reimbursement of Litigation Expenses.

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9 p) “Judgment” means the order of final judgment to be entered by the Court
which, subject to the approval of the Court, shall be substantially in the form
attached hereto as Exhibit B. q) “Lead Counsel” means the law firm of Shepherd,
Finkelman, Miller, & Shah, LLP. r) “Lead Plaintiff” means United Food and
Commercial Workers Union and Participating Food Industry Employers Tri-State
Pension Fund (“UFCW Tri-State”). s) “Litigation Expenses” means the reasonable
costs and expenses incurred by Lead Counsel in connection with commencing and
prosecuting the Action, for which Lead Counsel intends to apply to the Court for
reimbursement from the Settlement Fund. Litigation Expenses may also include
reimbursement of the reasonable costs and expenses (including lost wages) of
Lead Plaintiff in accordance with 15 U.S.C. § 78u- 4(a)(4). t) “Net Settlement
Fund” means the Settlement Fund less: (i) any Taxes and Tax Expenses; (ii) any
Notice and Administration Costs; and (iii) any attorneys’ fees and Litigation
Expenses awarded by the District Court. u) “Notice” means the Notice of Pendency
of Class Action and Proposed Settlement (substantially in the form attached
hereto as Exhibit A-1), which is to be sent to members of the Class. v) “Notice
and Administration Costs” means the costs, fees and expenses that are reasonably
incurred by the Claims Administrator in connection with (i) providing notice to
the Class; and (ii) administering the claims process, including, without
limitation, the actual costs of publication, printing and mailing the Notice,

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10 reimbursements to nominee owners for forwarding the Notice to their
beneficial owners, the administrative expenses actually incurred and fees
reasonably charged by the Claims Administrator in connection with identifying
Class Members and providing notice and processing the submitted Claims, and the
reasonable fees, if any, of the Escrow Agent. Prior to the Effective Date, the
Escrow Agent, without further approval of Defendants or the Court, may pay from
the Settlement Fund up to $100,000.00 in Notice and Administration Costs
actually and reasonably incurred and associated with the administration of the
Settlement. Prior to the Effective Date, payment of any Notice and
Administration Costs exceeding $100,000.00 shall require notice to and agreement
from Defendants, through Defendants’ Counsel. Subsequent to the Effective Date,
without further approval by Defendants or the Court, the Settlement Fund may be
used by Lead Counsel to pay reasonable and necessary Notice and Administration
Costs in excess of $100,000.00. In the event that the Settlement is terminated
pursuant to the terms of this Settlement, all Notice and Administration Costs
properly paid or incurred, including any related fees, shall not be returned or
repaid to Defendants. w) “Plan of Allocation” means the proposed plan of
allocation of the Net Settlement Fund set forth in ¶ 22 below and in the Notice,
or such other plan of allocation that the Court approves. The Plan of Allocation
is not part of the Settlement, and Defendants and any Released Party shall have
no responsibility for the Plan of Allocation or its implementation, and no
liability with respect thereto. x) “Preliminary Approval Order” means the order
to be entered by the Court preliminarily approving the Settlement, and directing
that Notice be provided to the

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11 Class, which, subject to the approval of the Court, shall be substantially in
the form attached hereto as Exhibit A. y) “Proof of Claim Form” means the form
provided to Class Members by the Claims Administrator for purposes of submitting
a Claim, substantially in the form attached hereto as Exhibit A-3. z) “Released
Claims” means any and all actions, causes of action, claims (including “Unknown
Claims,” defined below), duties, debts, demands, rights, disputes, suits,
matters, damages, losses, obligations, proceedings, issues, judgments, and
liabilities of every nature and description whatsoever (and including, but not
limited to, any claims for damages, whether compensatory, consequential,
special, punitive, exemplary or otherwise, and any fees, costs, expenses, or
charges), whether known or unknown, suspected or unsuspected, fixed or
contingent, foreseen or unforeseen, liquidated or unliquidated, accrued and
unaccrued, matured or unmatured, at law or in equity, whether class, derivative,
or individual in nature, whether or not concealed or hidden, which now exist, or
heretofore have existed, or can, shall or may exist, whether arising under
federal, state, common, statutory, administrative or foreign law, regulation, or
at equity, that (a) Lead Plaintiff or any Class Member has asserted in this
Action, or could have asserted in this Action or in any other proceeding or
forum that arise out of, relate to or are based upon, the allegations, claims,
transactions, facts, matters, occurrences, events, failures, representations,
statements, or omissions alleged, involved, set forth, or referred to in either
the First Amended Complaint or the Second Amended Complaint; (b) would have been
barred by res judicata, claim preclusion, issue preclusion, or collateral
estoppel had the Action been fully litigated to a final

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12 judgment; and (c) were, could have been, or in the future could be, asserted
in any forum or proceeding or otherwise by any Class Member that relate to the
purchase, sale, acquisition or holding of ADES common stock during the Class
Period. Released Claims do not, however, include claims to enforce this
Settlement. aa) “Released Party” and “Released Parties” means each of the
Defendants and his, her or its respective past, present or future directors,
officers, employees, parents, partners, members, principals, agents, owners,
fiduciaries, shareholders, related or affiliated entities, subsidiaries,
divisions, accountants, auditors, attorneys, associates, consultants, advisors,
insurers, co-insurers, reinsurers, trustees, estates, beneficiaries,
administrators, foundations, underwriters, banks or bankers, personal or legal
representatives, divisions, joint ventures, spouses, domestic partners, family
members, heirs, executors, or any other person or entity acting or purporting to
act for or on behalf of any of the Defendants, and each of their respective
predecessors, successors and assigns, and any trusts for which any of them are
trustees, settlors, or beneficiaries. bb) “Settled Defendants’ Claims” means any
and all claims, rights or causes of action or liabilities whatsoever, whether
based on federal, state, local, statutory, or common law, or any other law,
rule, or regulation, including both known claims and Unknown Claims, that have
been or could have been asserted in the Action or any forum by Defendants, a
Released Party or the Released Parties, against Lead Plaintiff, any of the Class
Members, or their attorneys, which arise out of or relate in any way to the
institution, prosecution, or settlement of the Action. Settled Defendants’
Claims do not, however, include claims to effectuate or to enforce this
Settlement.

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13 cc) “Settlement” means this Stipulation and Agreement of Settlement and the
settlement contained herein. dd) “Settlement Amount” means Three Million, Nine
Hundred-Fifty Thousand Dollars ($3,950,000). ee) “Settlement Fund” means the
Settlement Amount plus any interest earned thereon after it is deposited into
the Escrow Account. ff) “Settling Parties” means Defendants and Lead Plaintiff,
on behalf of themselves and the Class. gg) “Summary Notice” means the Summary
Notice of Pendency of Class Action and Proposed Settlement, which shall be
substantially in the form attached hereto as Exhibit A-2, to be published as set
forth in the Preliminary Approval Order. hh) “Taxes” means any taxes due and
payable with respect to the income earned by the Settlement Fund, including any
interest or penalties thereon. ii) “Tax Expenses” means any reasonable expenses
and costs incurred in connection with the payment of Taxes or the preparation of
tax returns, including, without limitation, reasonable expenses of tax attorneys
and/or accountants and/or other advisors and reasonable expenses relating to the
filing of or failure to file all necessary or advisable tax returns. jj)
“Unknown Claims” means any and all Released Claims, of every nature and
description, that Lead Plaintiff and/or any Class Member does not know or
suspect to exist in his, her or its favor at the time of the release of a
Released Party or the Released Parties, which, if known by him, her or it, might
have affected his, her or its settlement with and release of a Released Party or
the Released Parties, or might have

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14 affected his, her or its decision not to object to this Settlement or not to
exclude himself, herself or itself from the Class or to release the Released
Claims. With respect to any Settled Defendants’ Claims, “Unknown Claims” means
any and all Settled Defendants’ Claims, of every nature and description, which
Defendants and the other Released Party or Released Parties do not know or
suspect to exist in their favor at the time of the release of Lead Plaintiff,
the Class Members, and their attorneys, which, if known by them, might have
affected their decisions with respect to the release of Settled Defendants’
Claims or the Settlement. II. SETTLEMENT CONSIDERATION 2. ADES, on behalf of all
Defendants, shall cause to be deposited Three Million, Nine Hundred-Fifty
Thousand Dollars ($3,950,000) into the Escrow Account by wire transfer or
delivery of a check by no later than thirty (30) calendar days after the later
of: (i) entry of a Preliminary Approval Order by the Court, or (ii) receipt by
Defendants’ Counsel from Lead Counsel of all necessary payment details to
accomplish payment of the Settlement Amount by wire transfer or check, including
payee name, payee mailing address, bank account number, name of bank, and bank
address, a Sort Code or ABA Routing Number, the currency of the account
receiving the funds, wire transfer instructions, the Tax Identification Number
and an executed Form W-9. The Settlement Amount shall constitute the full and
sole monetary contribution made by or on behalf of a Released Party or the
Released Parties in connection with the resolution of the Action and the
Settlement. If the Settlement Amount, or any portion thereof, is not deposited
into the Escrow Account by the date provided for in this paragraph, the Settling
Parties agree that Defendants will not be obligated to pay the Settlement

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15 Amount or any portion thereof and Lead Plaintiff’s, Lead Counsel’s, and any
other parties’ remedy against Defendants shall be to terminate the Settlement,
in which case ¶ 44 below shall govern. III. CAFA NOTICE 3. Pursuant to the Class
Action Fairness Act, 28 U.S.C. § 1715, no later than ten (10) days after the
Settlement is filed with the Court, Defendants will serve proper notice of the
proposed Settlement upon the appropriate representatives and, within three (3)
business days thereafter, will provide written notification to Lead Counsel that
they have done so. Defendants shall be responsible for all costs and expenses
related to such notification. IV. RELEASES 4. Upon the Effective Date, Lead
Plaintiff and each of the Class Members (on behalf of themselves and each of
their respective present and former directors, officers, employees, parents,
subsidiaries, related or affiliated entities, shareholders, members, divisions,
partners, joint ventures, family members, spouses, domestic partners, heirs,
principals, agents, owners, fiduciaries, personal or legal representatives,
attorneys, auditors, accountants, advisors, banks or bankers, insurers,
reinsurers, trustees, trusts, estates, executors, administrators, predecessors,
successors, assigns, and any other person or entity who has the right, ability,
standing, or capacity to assert, prosecute, or maintain on behalf of any Class
Member any of the Released Claims (or to obtain the proceeds of any recovery
therefrom)), regardless of whether that Class Member actually submits a Proof of
Claim Form, seeks or obtains a distribution from the Net Settlement Fund, is
entitled to receive a distribution under the Plan of Allocation

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16 approved by the Court, or has objected to the Settlement, the Plan of
Allocation, or Lead Counsel’s application for attorneys’ fees and Litigation
Expenses, shall be deemed to have and by operation of the Judgment shall have
fully, finally and forever waived, released, relinquished, discharged and
dismissed each and every Released Claim against each and every Released Party.
5. With respect to any and all Released Claims, the Settling Parties stipulate
and agree that, upon the Effective Date, Lead Plaintiff expressly waives, and
each Class Member shall be deemed to have waived, and by operation of the
Judgment shall have expressly waived, to the fullest extent permitted by law,
the provisions, rights and benefits of California Civil Code § 1542, and of any
U.S. federal or state law, or principle of common law or the law of any foreign
jurisdiction, that is similar, comparable, or equivalent to Section 1542 of the
California Civil Code, which provides, in relevant part: A general release does
not extend to claims which the creditor does not know or suspect to exist in his
or her favor at the time of executing the release, which if known by him or her
must have materially affected his or her settlement with the debtor. Lead
Plaintiff and other Class Members, or certain of them, may hereafter discover
facts in addition to or different from those which he, she or it now knows or
believes to be true with respect to the subject matter of the Released Claims,
but Lead Plaintiff and the Class Members, and each of them, upon the Effective
Date, by operation of the Judgment, shall have, fully, finally, and forever
settled and released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non- contingent, whether or not concealed or hidden,
that now exist or heretofore have existed, upon any theory of law or equity now
existing or coming into existence in the future, including, but not limited to,
claims relating to conduct that is negligent, reckless,

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17 intentional, with or without malice, or a breach of any duty, law or rule,
without regard to the subsequent discovery or existence of such different or
additional facts. Lead Plaintiff acknowledges, and Class Members by law and
operation of the Judgment shall be deemed to have acknowledged, that the
inclusion of “Unknown Claims” in the definition of Released Claims was
separately bargained for and was a material element of the Settlement. 6. Upon
the Effective Date, Lead Plaintiff and each of the Class Members (on behalf of
themselves and each of their respective present and former directors, officers,
employees, parents, subsidiaries, related or affiliated entities, shareholders,
members, divisions, partners, joint ventures, family members, spouses, domestic
partners, heirs, principals, agents, owners, fiduciaries, personal or legal
representatives, attorneys, auditors, accountants, advisors, banks or bankers,
insurers, reinsurers, trustees, trusts, estates, executors, administrators,
predecessors, successors, assigns, and any other person or entity who has the
right, ability, standing, or capacity to assert, prosecute or maintain, on
behalf of any Class Member, any of the Released Claims (or to obtain the
proceeds of any recovery therefrom)), regardless of whether that Class Member
actually submits a Proof of Claim Form, seeks or obtains a distribution from the
Net Settlement Fund, is entitled to receive a distribution under the Plan of
Allocation approved by the Court, or has objected to the Settlement, the Plan of
Allocation, or Lead Counsel’s application for attorneys’ fees and Litigation
Expenses, and in accordance with the terms of the proposed Judgment attached
hereto as Exhibit B, shall have covenanted not to sue the Released Parties with
respect to any Released Claims and are forever barred and enjoined from
commencing, instituting, participating in,

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18 maintaining, or continuing to prosecute any action or proceeding in any court
of law or equity, arbitration tribunal, administrative forum, or other forum of
any kind, asserting any Released Claim (including, without limitation, Unknown
Claims), as well as any claims arising out of, relating to, or in connection
with, the defense, settlement, or resolution of this Action against any Released
Party. 7. Upon the Effective Date, each of the Released Parties, on behalf of
themselves and each of their past or present subsidiaries, affiliates, parents,
assigns, successors and predecessors, estates, heirs, executors, administrators,
and the respective officers, directors, shareholders, agents, legal
representatives, spouses and any persons or entities they represent, shall, with
respect to each and every one of Settled Defendants’ Claims, release and forever
discharge each and every one of the Settled Defendants’ Claims, and shall
forever be enjoined from instituting, commencing, or prosecuting the Settled
Defendants’ Claims. V. BAR ORDER 8. The proposed Judgment shall include, and the
Settling Parties agree to the entry by the Court of an order providing for the
bar order in ¶ 9 (the “Bar Order”), subject to the terms in ¶ 11 herein. 9. The
Bar Order shall provide that, upon the Effective Date, except as provided in ¶
11 below, any and all persons and entities are permanently barred and enjoined,
to the fullest extent permitted by law, from commencing, prosecuting, or
asserting any and all claims for contribution or indemnity (or any other claim
when the alleged injury to that person or entity is their actual or threatened
liability to the Class or a Class Member in the Action) based upon, relating to,
arising out of, or in connection

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19 with the Released Claims, against each and every one of the Released Parties,
whether arising under state, federal, common, statutory, administrative or
foreign law, regulation, or at equity, as claims, cross-claims, counterclaims,
or third-party claims, in this Action or a separate action, in this Court or in
any other court, arbitration proceeding, administrative proceeding, or other
forum; and, except as provided in ¶ 11 below, the Released Parties are
permanently barred and enjoined, to the fullest extent permitted by law, from
commencing, prosecuting, or asserting any and all claims for contribution or
indemnity (or any other claim when the alleged injury to the Released Party is
their actual or threatened liability to the Class or a Class Member in the
Action) based upon, relating to, or arising out of the Released Claims, against
any person or entity, other than a person or entity whose liability to the Class
has been extinguished pursuant to the Settlement and the Judgment, whether
arising under state, federal, common, statutory, administrative, or foreign law,
regulation, or at equity, as claims, cross-claims, counterclaims, or third-party
claims, in this Action or a separate action, in this Court or in any other
court, arbitration proceeding, administrative proceeding, or other forum.
Nothing herein shall bar, release, or alter, in any way, any obligations, rights
or claims among or between the Released Parties. 10. The Judgment shall also
contain a provision, substantially in the form set forth in Exhibit “B” hereto,
requiring that any final verdict or judgment that may be obtained by or on
behalf of the Class or a Class Member against any person or entity subject to
the Bar Order as defined herein be reduced by the greater of: (i) an amount that
corresponds to the percentage of responsibility of any of the Defendants for
common damages; or (ii) the Settlement Amount.

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20 11. Notwithstanding the Bar Order in ¶ 9 above, nothing in this Settlement
shall bar any action by any of the Settling Parties to enforce or effectuate the
terms of this Settlement, the Preliminary Approval Order, or the Judgment. VI.
USE AND TAX TREATMENT OF SETTLEMENT FUND 12. The Settlement Fund shall be held
and invested in the Escrow Account as provided in ¶ 13 hereof. If the Settlement
becomes Final, any interest earned on the Settlement Fund shall be for the
benefit of the Class. If the Settlement does not become Final and the Settlement
is terminated for any reason, within ten (10) days of termination, the
Settlement Fund shall be returned pursuant to written instructions from
Defendants’ Counsel, together with any interest earned on the Settlement Fund,
less any Notice and Administration Costs actually incurred. 13. The Escrow Agent
shall invest any funds in excess of the $100,000.00 preliminarily allocated to
Notice and Administration Costs, in United States Agency or Treasury Securities
having maturities of one hundred and eighty (180) days or less, money market
mutual funds comprised of investments secured by the full faith and credit of
the United States government, or an interest-bearing account insured by the
Federal Deposit Insurance Corporation (“FDIC”), and shall collect or reinvest
all interest accrued thereon. Any funds held in escrow in an amount equal to or
less than $100,000.00 may be held in an interest-bearing bank account insured by
the FDIC. The Released Parties and Defendants’ Counsel shall have no
responsibility for, interest in, or liability with respect to the investment
decisions of the Escrow Agent. The Settlement Fund and the Escrow Agent shall
bear all risks related to investment of the Settlement Amount.

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[exhibit10220160630finals021.jpg]
21 14. The Escrow Agent shall not disburse the Settlement Fund except as
provided in this Settlement. 15. Subject to the terms and conditions of this
Settlement, the Settlement Fund shall be used to pay: (i) Taxes and Tax
Expenses; (ii) Notice and Administration Costs; and (iii) any attorneys’ fees
and Litigation Expenses awarded by the Court. In no event shall the Released
Parties bear any responsibility for any fees, costs or expenses beyond payment
of the Settlement Amount. 16. After (i) the Judgment becomes Final, and (ii)
entry by the Court of a Class Distribution Order approving distribution of the
Net Settlement Fund to the Class, the Claims Administrator shall distribute the
Net Settlement Fund to Authorized Claimants in accordance with the terms of such
Class Distribution Order; provided, however, that any amounts in the Escrow
Account necessary for payment of Taxes and Tax Expenses and/or Notice and
Administration Costs shall remain in the Escrow Account for such purpose. 17.
Except as provided herein, the Net Settlement Fund shall remain in the Escrow
Account prior to the distribution. All funds held in the Escrow Account shall be
deemed to be in the custody of the Court and shall remain subject to the
jurisdiction of the Court until such time as the funds are distributed or
returned pursuant to the terms of this Settlement. 18. The Settling Parties
agree that the Settlement Fund is intended to be a “qualified settlement fund”
within the meaning of Treasury Regulation § 1.468B-1 and that the Claims
Administrator, as “administrator” of the Settlement Fund within the meaning of
Treasury Regulation § 1.468B-2(k)(3), shall be solely responsible for filing or

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[exhibit10220160630finals022.jpg]
22 causing to be filed all informational and other tax returns as may be
necessary or appropriate (including, without limitation, the returns described
in Treasury Regulation § 1.468B-2(k)) for the Settlement Fund. Such returns
shall be consistent with this paragraph and in all events shall reflect that all
Taxes on the income earned on the Settlement Fund shall be paid out of the
Settlement Fund as provided by ¶ 19 herein. The Claims Administrator shall also
be solely responsible for causing payment to be made from the Settlement Fund of
any Taxes and Tax Expenses owed with respect to the Settlement Fund, and is
authorized to withdraw, without prior order of the Court, from the Settlement
Fund such amounts as are necessary to pay Taxes and Tax Expenses. Defendants
will provide to the Claims Administrator the statement described in Treasury
Regulation § 1.468B-3(e). However, neither the Released Parties nor Defendants’
Counsel shall have any liability or responsibility for the filing of any tax
returns or other documents with the Internal Revenue Service or any other state
or local taxing authority. The Claims Administrator, as “administrator” of the
Settlement Fund within the meaning of Treasury Regulation § 1.468B-2(k)(3),
shall timely make such elections as are necessary or advisable to carry out this
paragraph, including, as necessary, making a “relation-back election,” as
described in Treasury Regulation § 1.468B-1(j), to cause the qualified
settlement fund to come into existence at the earliest allowable date, and shall
take or cause to be taken all actions as may be necessary or appropriate in
connection therewith. 19. All Taxes (including any interest or penalties) and
Tax Expenses shall be considered to be a cost of administration of the
Settlement and shall be paid out of the Settlement Fund. The Released Parties
shall not have any responsibility for, and no

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[exhibit10220160630finals023.jpg]
23 liability with respect to, payment of any such Taxes or Tax Expenses, and
shall have no responsibility for, and no liability with respect to, the acts or
omissions of the Claims Administrator, Lead Counsel or their agents, with regard
to Taxes and Tax Expenses. The Settling Parties agree to cooperate with each
other, and their tax attorneys and accountants, to the extent reasonably
necessary to carry out the terms of this Settlement with regard to Taxes and Tax
Expenses. 20. If all conditions of the Settlement are satisfied and the Judgment
is entered and becomes Final, no portion of the Settlement Fund will be returned
to Defendants, irrespective of the number of Claims filed, the collective amount
of losses of Authorized Claimants, the percentage of recovery of losses, or the
amounts to be paid to Authorized Claimants from the Net Settlement Fund. If any
portion of the Net Settlement Fund remains following distribution pursuant to ¶
29 and is of such an amount that in the discretion of the Claims Administrator
it is not cost effective or efficient to redistribute to the Class, then such
remaining funds, after payment of any further Notice and Administration Costs
and Taxes and Tax Expenses, shall be donated to a non-sectarian charitable
organization(s) certified as tax-exempt under United States Internal Revenue
Code Section 501(c)(3), to be designated by Lead Counsel. VII. CLASS
CERTIFICATION 21. Solely for purposes of the Settlement, the Settling Parties
stipulate and agree to: (a) certification of the Action as a class action
pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure on
behalf of the Class; (b) appointment of Lead Plaintiff as Class representative;
and (c) appointment of Lead Counsel as Class counsel pursuant to Rule 23(g) of
the Federal Rules of Civil Procedure.

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[exhibit10220160630finals024.jpg]
24 VIII. PLAN OF ALLOCATION 22. The Net Settlement Fund shall be distributed to
Authorized Claimants in accordance with a Plan of Allocation prepared by Lead
Counsel, in conjunction with Lead Plaintiff’s damages expert and set forth in
Exhibit A-1. The Released Parties and Defendants’ Counsel have had no role in
the preparation of the Plan of Allocation. 23. The finality of the Settlement
shall not be conditioned on any ruling by the District Court concerning the Plan
of Allocation or any award of attorneys’ fees or reimbursement of Litigation
Expenses. Any order or proceeding relating to a request for approval of the Plan
of Allocation, or any appeal from any order relating thereto or reversal or
modification thereof, shall not operate to terminate the Settlement or affect or
delay the Effective Date or the effectiveness or finality of the Judgment and
the release of the Released Claims. There shall be no distribution of any of the
Settlement Fund to any Class Member until the Plan of Allocation is finally
approved and such order of approval is affirmed on appeal and/or is no longer
subject to review by appeal or certiorari, and the time for any petition for
rehearing, appeal, or review, by certiorari or otherwise, has expired. Again,
and for the avoidance of doubt, the Released Parties and Defendants’ Counsel
shall have no responsibility for, and no liability with respect to, the
investment or distribution of the Settlement Fund. 24. The allocation of the Net
Settlement Fund among Authorized Claimants is a matter separate and apart from
the proposed Settlement between Defendants and Lead Plaintiff, and any decision
by the Court concerning the Plan of Allocation shall not affect the validity or
finality of the proposed Settlement. The Plan of Allocation is not a necessary
term of this Settlement, and it is not a condition of this Settlement that any

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[exhibit10220160630finals025.jpg]
25 particular plan of allocation be approved by the Court. None of the Settling
Parties may cancel or terminate the Settlement based on this Court’s or any
appellate court’s ruling with respect to the Plan of Allocation or any plan of
allocation in this Action. The Released Parties shall have no responsibility
for, and no liability with respect to, the allocation of the Net Settlement
Fund, nor shall they object to the Plan of Allocation proposed by Lead
Plaintiff. IX. ATTORNEYS’ FEES AND LITIGATION EXPENSES 25. Lead Counsel may
apply to the Court for an award from the Settlement Fund of attorneys’ fees not
to exceed one-third of the Settlement Fund. Litigation Expenses may include
reimbursement of the expenses of Lead Plaintiff’s counsel up to $150,000.00 and
Lead Plaintiff’s expenses up to $5,000.00 in accordance with 15 U.S.C. §
78u-4(a)(4). Attorneys’ fees and Litigation Expenses are not the subject of any
agreement between the Settling Parties other than what is set forth in this
Settlement. 26. The Released Parties will take no position on Lead Counsel’s
request for attorneys’ fees or Litigation Expenses, and shall have no
responsibility for, and no liability with respect to, the attorneys’ fees or
Litigation Expenses that the Court may award. 27. The procedure for and amounts
of any award of attorneys’ fees and Litigation Expenses, and the allowance or
disallowance by the Court thereof, shall not be a condition of the Settlement.
Lead Counsel shall request that its application for an award of attorneys’ fees
and Litigation Expenses be considered by the Court separately from the Court’s
consideration of the fairness and adequacy of the Settlement. Any order or
proceedings relating to such request, or any appeal from any order relating

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[exhibit10220160630finals026.jpg]
26 thereto or reversal or modification thereof, shall not operate to terminate
the Settlement or affect the release of the Released Claims. The finality of the
Settlement shall not be conditioned on any ruling by the Court concerning Lead
Counsel’s application for attorneys’ fees and Litigation Expenses. 28. Within
ten (10) days after both the Judgment and an order by the Court approving Lead
Counsel’s attorneys’ fees and Litigation Expenses (the “Fee and Expense Order”)
become Final, any awarded attorneys’ fees and Litigation Expenses shall be paid
to Lead Counsel from the Escrow Account. Notwithstanding the foregoing, such
attorneys’ fees and Litigation Expenses awarded by the Court may be paid
immediately following entry of the Judgment and the Fee and Expense Order
notwithstanding the existence of or pendency of any appeal or collateral attack
on the Settlement or any part thereof or the Fee and Expense Order. In the event
that the Effective Date does not occur, or the Judgment or the Fee and Expense
Order is reversed or modified by a Final, non-appealable order, or the
Settlement is terminated or canceled for any reason, and in the event that
attorneys’ fees and Litigation Expenses have been paid out of the Escrow Account
to any extent, then Lead Counsel shall be obligated and do hereby agree, within
ten (10) days from receiving notice from Defendants’ Counsel or from the Court,
to refund to the Escrow Account such attorneys’ fees and Litigation Expenses
that have been paid, plus interest thereon at the same rate as would have been
earned had those sums remained in the Escrow Account. Lead Counsel is
responsible for refunding 100% of the sums to be refunded regardless of whether
the sums were distributed to Plaintiff (as Lead Plaintiff’s expenses) as
provided in Paragraph 25, or to other counsel.

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[exhibit10220160630finals027.jpg]
27 X. ADMINISTRATION OF THE SETTLEMENT 29. The Claims Administrator, subject to
the supervision of Lead Counsel and the jurisdiction of the Court, shall
administer and calculate the Claims submitted by Class Members, oversee
distribution of the Net Settlement Fund to Authorized Claimants, and perform all
claims administration procedures necessary or appropriate in connection
therewith. The Claims Administrator shall receive and administer Claims in
accordance with the Plan of Allocation approved by the Court. The proposed Plan
of Allocation is set forth in the Notice attached hereto as Exhibit A-1. 30. The
Released Parties shall have no liability, obligation or responsibility
whatsoever to any person, including, but not limited to, Class Members, the
Escrow Agent, Lead Counsel, Lead Plaintiff, or the Claims Administrator, in
connection with the Plan of Allocation, the administration of the Settlement,
the investment of the Settlement Fund, the processing of claims, or the
disbursement of the Settlement Fund or the Net Settlement Fund. The Settlement
Fund shall indemnify and hold all Released Parties harmless for any Taxes and
related expenses on the Settlement Fund of any kind whatsoever (including,
without limitation, taxes payable by reason of any such indemnification), as
well as for any claims related to the Plan of Allocation, the administration of
the Settlement, the investment of the Settlement Fund, the processing of claims,
or the disbursement of the Settlement Fund or the Net Settlement Fund.
Defendants shall notify the Escrow Agent promptly if Defendants receive any
notice of any claim so indemnified. 31. Within ten (10) business days of the
Court’s Preliminary Approval Order, Defendants will use reasonable efforts to
cause ADES’s transfer agent to provide the

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[exhibit10220160630finals028.jpg]
28 Claims Administrator, in a computer-readable format, the last known names and
addresses of all of ADES’s shareholders of record during the Class Period. 32.
Lead Counsel shall cause the Claims Administrator to mail the Notice to those
Class Members who may be identified through the records maintained by or on
behalf of ADES, and to publish the Summary Notice, pursuant to the terms of the
Preliminary Approval Order entered by the Court. 33. Any Class Member who does
not timely submit a valid Proof of Claim Form by the deadline set by the Court
will not be entitled to receive any distribution from the Net Settlement Fund
but will, nevertheless, be bound by all of the terms of the Settlement,
including the terms of the Judgment to be entered in the Action and the releases
provided for therein, and will be permanently barred and enjoined from bringing
any action, claim or other proceeding of any kind against any Released Party
concerning any Released Claim. 34. By submitting a Claim, a Class Member shall
be deemed to have submitted to the jurisdiction of the Court with respect to the
Claim, including, but not limited to, the releases and Bar Order provided for in
the Judgment, and the Claim will be subject to investigation and discovery under
the Federal Rules of Civil Procedure, provided that such investigation and
discovery shall be limited to their status as a Class Member and the validity
and amount of their Claim. No discovery shall be allowed on the merits of this
Action or this Settlement in connection with the processing of Proof of Claim
Forms, nor shall any discovery be taken of the Released Parties in connection
with such matters.

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[exhibit10220160630finals029.jpg]
29 35. Lead Counsel will apply to the Court, with reasonable notice to
Defendants, for a Class Distribution Order, inter alia: (i) approving the Claims
Administrator’s administrative determinations concerning the acceptance and
rejection of the Claims submitted; (ii) approving payment of any outstanding
Notice and Administration Costs from the Escrow Account; and (iii) if the
Effective Date has occurred, directing payment of the Net Settlement Fund to
Authorized Claimants. 36. Payment pursuant to the Class Distribution Order shall
be final and conclusive against any and all Class Members. All Class Members who
did not submit a Claim or whose Claim was not approved by the Court shall be
barred from participating in distributions from the Net Settlement Fund, but
shall be bound by all of the terms of this Settlement, including the terms of
the Judgment and the releases provided for therein, and will be permanently
barred and enjoined from bringing any action, claim or proceeding of any kind
against any Released Party concerning any Released Claim. 37. All proceedings
with respect to the administration, processing and determination of Claims and
the determination of all controversies relating thereto, including disputed
questions of law and fact with respect to the validity of Claims, shall be
subject to the jurisdiction of the Court. XI. OBJECTIONS AND REQUESTS FOR
EXCLUSION 38. Any member of the Class may appear at the Final Approval Hearing
and show cause why the proposed Settlement should or should not be approved as
fair, reasonable, adequate and in the best interests of the Class, or why the
Judgment should or should not be entered thereon, and/or to present opposition
to the Plan of Allocation or to the application of Lead Counsel for attorneys’
fees and reimbursement

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[exhibit10220160630finals030.jpg]
30 of Litigation Expenses. However, no Class Member or any other person or
entity shall be heard or entitled to contest the approval of the terms and
conditions of the Settlement, or, if approved, the Judgment to be entered
thereon approving the same, or the terms of the Plan of Allocation or the
application by Lead Counsel for an award of attorneys’ fees and reimbursement of
Litigation Expenses, unless that Class Member (i) has served written objections,
by hand or first-class mail, including the basis therefor, as well as copies of
any papers and/or briefs in support of his, her or its position upon Lead
Counsel and Defendants’ Counsel for receipt no later than twenty-one (21) days
prior to the Final Approval Hearing; and (ii) filed said objections, papers and
briefs with the Clerk of the United States District Court for the District of
Colorado by no later than twenty-one (21) days prior to the Final Approval
Hearing. Any objection must include: (a) the full name, address, and telephone
number of the objecting Class Member; (b) a list and documentation of all of the
Class Member’s transactions in ADES’s common stock during the Class Period, such
as brokerage confirmation receipts or other competent documentary evidence of
such transactions, including the amount and date of each purchase (or
acquisition) or sale and the price or other consideration paid and/or received
(including all income received thereon); (c) a written statement of all grounds
for the objection accompanied by any legal support for the objection; (d) copies
of any papers, briefs or other documents upon which the objection is based; (e)
a list of all persons who will be called to testify in support of the objection;
(f) a statement of whether the objector intends to appear at the Final Approval
Hearing; (g) a list of other cases in which the objector or the objector’s
counsel have appeared either as settlement objectors or as counsel for objectors
in the preceding five years; and (h) the

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[exhibit10220160630finals031.jpg]
31 objector’s signature, even if represented by counsel. If the objector intends
to appear at the Final Approval Hearing through counsel, the objection must also
state the identity of all attorneys who will appear on the objector’s behalf at
the Final Approval Hearing. Any Class Member who does not make his, her or its
objection in the manner provided for herein shall be deemed to have waived such
objection and shall forever be foreclosed from making any objection to the
fairness or adequacy of the Settlement, to the Judgment, to the Plan of
Allocation or to the application by Lead Counsel for an award of attorneys’ fees
and reimbursement of Litigation Expenses. The Notice shall also state the manner
in which a notice of objection should be prepared, filed and delivered. By
objecting to the Settlement, the Judgment, the Plan of Allocation and/or the
application by Lead Counsel for an award of attorneys’ fees and reimbursement of
Litigation Expenses, or otherwise requesting to be heard at the Final Approval
Hearing, an objector shall be deemed to have submitted to the jurisdiction of
the Court with respect to the person’s or entity’s objection or request to be
heard and the subject matter of the Settlement, including, but not limited to,
enforcement of the terms of the Settlement (including, but not limited to, the
release of the Released Claims provided for in the Settlement and the Judgment).
39. A person or entity requesting exclusion from the Class must timely provide
the following information to the Claims Administrator: (i) name; (ii) address;
(iii) telephone number; (iv) number of shares of ADES common stock purchased (or
otherwise acquired) or sold during the Class Period; (v) prices or other
consideration paid or received for such ADES common stock; (vi) the date of each
purchase (or acquisition) or sale transaction; and (vii) a statement that the
person or entity wishes to

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[exhibit10220160630finals032.jpg]
32 be excluded from the Class. Unless otherwise ordered by the Court, any Class
Member who does not timely submit a written request for exclusion as provided by
this Paragraph shall be bound by the Settlement. Lead Plaintiff shall request
that any requests for exclusion must be received by the Claims Administrator no
later than twenty-one (21) days prior to the Final Approval Hearing. 40. The
Claims Administrator shall scan and electronically send copies of all requests
for exclusion in PDF format (or such other format as shall be agreed upon) to
Defendants’ Counsel and to Lead Counsel expeditiously (and not more than two (2)
days) after the Claims Administrator receives such a request. Lead Counsel shall
provide Defendants’ Counsel, within two (2) days after the expiration of the
request for exclusion deadline, copies of all requests for exclusion of any
Class Members who will be identified to the Court as having validly and timely
requested exclusion from the Class. Lead Counsel will submit to the Court a
final list of all persons or entities who have requested exclusion from the
Class, and shall certify that copies of all requests for exclusion received by
the Claims Administrator have been provided to Defendants’ Counsel, at least two
(2) days before the Final Approval Hearing. XII. PRELIMINARY APPROVAL OF THE
SETTLEMENT 41. Promptly after execution of this Settlement, Lead Plaintiff, by
and through Lead Counsel, with Defendants’ Counsel’s consent, shall submit the
Settlement together with its exhibits, to the Court and shall move for entry of
the Preliminary Approval Order, among other things, preliminarily (a) approving
the Settlement, (b) approving the contents and method of distribution of the
Notice and Summary Notice, (c) approving the contents of the Proof of Claim
Form, and (d) setting a date for the

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[exhibit10220160630finals033.jpg]
33 Final Approval Hearing. To permit compliance with the settlement notice
requirements of the Class Action Fairness Act, the Final Approval Hearing shall
take place no earlier than one hundred (100) days after the Court enters the
Preliminary Approval Order. XIII. JUDGMENT APPROVING THE SETTLEMENT 42. Lead
Plaintiff, by and through Lead Counsel, with Defendants’ Counsel’s consent,
shall request that the Court, if it approves the Settlement following the Final
Approval Hearing, enter the Judgment. The Settlement is expressly conditioned
upon, among other things, the entry of a Judgment substantially in the form
attached hereto as Exhibit B and in all respects consistent with this
Settlement. XIV. EFFECTIVE DATE OF THE SETTLEMENT, AND TERMINATION 43. The
Effective Date of the Settlement shall be the first date by which all of the
following have occurred: a) The Court has entered the Preliminary Approval
Order; b) ADES has caused the Settlement Amount to be deposited into the Escrow
Account; c) Defendants have not exercised their option to terminate the
Settlement pursuant to ¶ 45 herein; d) The Court has approved the Settlement
following notice to the Class and the Final Approval Hearing in accordance with
Rule 23 of the Federal Rules of Civil Procedure, and has entered the Judgment;
and e) The Judgment has become Final, as defined in ¶ I 1(n) herein. 44.
Defendants and Lead Plaintiff each shall have the right to terminate the
Settlement by providing written notice of their election to do so to the other
within twenty

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[exhibit10220160630finals034.jpg]
34 (20) days of the date on which: (a) the Court refuses to approve this
Settlement, or the terms contained herein, in any material respect; (b) the
Court declines to enter the Preliminary Approval Order in any material respect;
(c) the Court refuses to grant final approval of this Settlement, or any
material part of it; (d) the Court declines to enter the Judgment in any
material respect; (e) any appellate court refuses to approve the Judgment in any
material respect in such a way that the Court cannot, on remand from such an
appeal, enter the Judgment; (f) the Effective Date of the Settlement does not
occur; or (g) the payment of the Settlement Amount is not satisfied in
accordance with the terms herein. In addition, Defendants may also terminate the
Settlement in accordance with ¶ 45. The foregoing list is not intended to limit
or impair the Settling Parties’ rights under the law of contracts of the State
of Colorado with respect to any breach of this Settlement (except as provided in
¶ 2 hereof). In the event the Settlement is terminated, the provisions of this
Paragraph and of ¶¶ 12, 13, 14, 15, 17, 19, 28, 30, 46, 47, 51, 53, 54, 60, 63,
64, 65, 66, and 67 shall survive termination. If the Settlement does not become
Final or is terminated for any reason, within ten (10) days of termination, the
Settlement Fund shall be returned to Defendants pursuant to written instructions
from Defendants’ Counsel, together with any interest earned on the Settlement
Fund, less any Notice and Administration Costs actually and reasonably incurred.
45. Defendants shall have the option to terminate the Settlement in the event
that the aggregate number of total shares of ADES common stock purchased or
acquired during the Class Period by persons or entities who would otherwise be
entitled to participate in the Settlement as Class Members, but who timely and
validly request

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[exhibit10220160630finals035.jpg]
35 exclusion in accordance with the terms of this Settlement, equals or exceeds
the threshold (the “Opt-Out Threshold”) as calculated pursuant to a separate
agreement (the “Supplemental Agreement”) executed between Lead Counsel and
Defendants’ Counsel, which is incorporated by reference into this Settlement.
The Opt-Out Threshold may be disclosed in camera to the Court for purposes of
approval of the Settlement, as may be required by the Court, but such disclosure
shall be carried out to the fullest extent possible in accordance with the
practices of the Court so as to maintain the confidentiality of the Opt-Out
Threshold. 46. Except as otherwise provided herein, in the event the Settlement
is terminated, the Settling Parties reserve their rights to proceed in all
respects as if this Settlement had not been entered into and without any
prejudice in any way from the negotiation, fact or terms of this Settlement. If
the Settlement is terminated, the Settling Parties shall be restored to their
respective positions in the Action as of March 8, 2016, the date the Court
entered its Order granting the parties’ Stipulated Motion to Stay this
proceeding pending settlement discussions. Any order certifying a class in this
Action for purposes of this Settlement prior to termination shall be null and
void and a class shall not be considered certified for purposes of further
litigation. The Settling Parties will, in good faith, propose a new case
schedule for the completion of briefing on any motion to dismiss the Second
Amended Complaint, class certification briefing, discovery and other pretrial
proceedings and for the trial of this Action. XV. NO ADMISSION OF WRONGDOING 47.
Whether or not the Settlement is approved by the Court, and whether or not the
Settlement is consummated, the fact and terms of this Settlement, including its

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[exhibit10220160630finals036.jpg]
36 exhibits, all negotiations, discussions, drafts and proceedings in connection
with the Settlement, and any act performed or document signed in connection with
the Settlement: a) shall not be offered or received against the Released
Parties, Lead Plaintiff or the other Class Members as evidence of, or be deemed
to be evidence of, any presumption, concession or admission by any of the
Released Parties or by Lead Plaintiff or the other Class Members with respect to
the truth of any fact alleged by Lead Plaintiff or the validity, or lack
thereof, of any claim that has been or could have been asserted in the Action or
in any litigation, or the deficiency of any defense that has been or could have
been asserted in the Action or in any litigation, or of any liability,
negligence, fault or wrongdoing of the Released Parties; b) shall not be offered
or received against the Released Parties as evidence of a presumption,
concession or admission of any fault, misrepresentation or omission with respect
to any statement or written document approved or made by any Released Party, or
against Lead Plaintiff or any of the other Class Members as evidence of any
infirmity in the claims of Lead Plaintiff and the other Class Members; c) shall
not be offered or received against the Released Parties, Lead Plaintiff or the
other Class Members as evidence of a presumption, concession or admission with
respect to any liability, negligence, fault or wrongdoing, or in any way
referred to for any other reason as against any of the Released Parties, Lead
Plaintiff or the other Class Members, in any

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[exhibit10220160630finals037.jpg]
37 arbitration proceeding or other civil, criminal or administrative action or
proceeding, other than such proceedings as may be necessary to effectuate the
provisions of this Settlement; provided, however, that if this Settlement is
approved by the Court, the Released Parties may refer to the Settlement and the
Judgment in any action that may be brought against them to effectuate the
liability protection granted them hereunder, including, without limitation, to
support a defense or claim based on principles of res judicata, collateral
estoppel, release, good faith settlement, judgment bar or reduction, or any
other theory of claim preclusion or issue preclusion or similar defense or claim
under U.S. federal or state law or foreign law; d) shall not be construed
against the Released Parties, Defendants’ Counsel, Lead Counsel or Lead
Plaintiff or the other Class Members as an admission or concession that the
consideration to be paid hereunder represents the amount which could be or would
have been recovered after trial or that any damages potentially recoverable in
the Action would have exceeded or would have been less than the Settlement
Amount; and e) shall not be construed as or received in evidence as an
admission, concession or presumption against Lead Plaintiff or the other Class
Members, or any of them, that any of their claims are without merit; and f)
shall not be construed as or received in evidence as an admission, concession or
presumption against the Released Parties that class

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[exhibit10220160630finals038.jpg]
38 certification is appropriate in this Action, except for purposes of this
Settlement. 48. Defendants have denied, and continue to deny, each and every
claim and contention alleged in the Action and affirm that they have acted
properly and lawfully at all times. Further, Defendants have denied expressly,
and continue to deny, all allegations of wrongdoing, fault, liability, or damage
against them arising out of any of the conduct, statements, acts or omissions
alleged, or that could have been alleged, in the Action and deny that they ever
engaged in or committed any fraud, wrongdoing, improper conduct, violation of
law, or breach of duty whatsoever. Defendants also have denied, and continue to
deny, inter alia, that there were any materially false or misleading statements
or material omissions in any of Defendants’ public statements, including their
filings with the SEC, and that Lead Plaintiff or any Class Member has suffered
damage or harm of any kind. Had the terms of this Settlement not been reached,
Defendants would have continued to contest vigorously Lead Plaintiff’s
allegations, and Defendants maintain that they had and have meritorious defenses
to all claims alleged in the Action. XVI. MISCELLANEOUS PROVISIONS 49. All of
the exhibits attached hereto are hereby incorporated by reference as though
fully set forth herein. 50. The Settling Parties intend this Settlement to be a
final and complete resolution of all disputes asserted or that could be asserted
by Lead Plaintiff or any other Class Members in the Action or with respect to
all Released Claims. Except in the event of termination of this Settlement, Lead
Plaintiff and Defendants agree not to

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[exhibit10220160630finals039.jpg]
39 assert, under Rule 11 of the Federal Rules of Civil Procedure or any similar
law, rule or regulation, that the Action was brought or defended in bad faith or
without a reasonable basis. The Settling Parties agree that the Settlement
Amount and the other terms of the Settlement were negotiated at arm’s length and
in good faith by the Settling Parties and reflect a settlement that was reached
voluntarily based upon adequate information and after consultation with their
respective experienced legal counsel. 51. While maintaining their positions that
the claims and defenses asserted in the Action are meritorious, Lead Plaintiff
and Lead Counsel, on the one hand, and Defendants and Defendants’ Counsel, on
the other, shall not make any public statements or statements to the media
(whether or not for attribution) that disparage the other’s business, conduct,
or reputation or that of their counsel based on the subject matter of the
Action. 52. This Settlement may not be modified or amended, nor may any of its
provisions be waived, except by a writing signed by all Settling Parties or
their successors-in-interest. After prior notice to the Court, but without
further order of the Court, the Settling Parties may agree to reasonable
extensions of time to carry out any provisions of this Settlement. 53. The
headings herein are used for the purpose of convenience only and are not meant
to have legal effect. 54. Neither the Settlement, nor any act performed or
document executed pursuant to or in furtherance of the Settlement: (a) is or may
be deemed to be or may be used as an admission of, or evidence of, the truth or
validity of any Released Claim, any allegations or claims made in the Action, or
of any purported wrongdoing or liability

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[exhibit10220160630finals040.jpg]
40 of any of the Released Parties; or (b) is or may be deemed to be or may be
used as an admission of, or evidence of, any liability, negligence, fault,
omission, or wrongdoing as against any of the Released Parties in any civil,
criminal or administrative proceeding in any court, any arbitration proceeding
or any administrative agency or other tribunal, other than in such proceedings
as may be necessary to consummate or enforce the Settlement or the Judgment. 55.
The waiver by one party of any breach of this Settlement by any other party
shall not be deemed a waiver of any other prior or subsequent breach of this
Settlement. The provisions of this Settlement may not be waived except by a
writing signed by the affected party, or counsel for that party. 56. This
Settlement, including its exhibits and the Supplemental Agreement, which are
material parts thereof, constitute the entire agreement among the Settling
Parties, and no representations, warranties or inducements have been made to any
party concerning this Settlement, its exhibits, or the Supplemental Agreement,
other than the representations, warranties and covenants contained and
memorialized in such documents. It is understood by the Settling Parties that,
except for the matters expressly represented herein, the facts or law with
respect to which this Settlement is entered into may turn out to be other than,
or different from, the facts now known to each party or believed by such party
to be true; each party therefore expressly assumes the risk of the facts or law
turning out to be so different, and agrees that this Settlement shall be in all
respects effective and not subject to termination by reason of any such
different facts or law.

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[exhibit10220160630finals041.jpg]
41 57. This Settlement may be executed in one or more counterparts, including by
signature transmitted via facsimile, or by a .pdf/.tif image of the signature
transmitted via e-mail. All executed counterparts and each of them shall be
deemed to be one and the same instrument. 58. Lead Plaintiff agrees that it will
use its best efforts to obtain all necessary approvals of the Court required by
this Settlement, and Defendants agree to provide such support as may be
reasonably requested by Lead Plaintiff or Lead Counsel. 59. Each signatory to
this Settlement represents that he or she has authority to sign this Settlement
on behalf of Lead Plaintiff or Defendants, as the case may be, and that they
have the authority to take appropriate action required or permitted to be taken,
pursuant to this Settlement, to effectuate its terms. Lead Plaintiff and Lead
Counsel also represent and warrant that none of Lead Plaintiff’s claims or
causes of action referred to herein, or that could have been alleged in the
Action, have been assigned, encumbered, hypothecated, conveyed, transferred, or
in any manner granted or given, in whole or in part, to any other person or
entity. 60. This Settlement shall be binding upon and shall inure to the benefit
of the successors and assigns of the parties hereto, including all Released
Parties, and any corporation, partnership, or other entity into or with which
any party hereto may merge, consolidate or reorganize. 61. Any notice required
by this Settlement shall be submitted by overnight mail and e-mail to each of
the signatories below. 62. The administration, consummation and enforcement of
the Settlement shall be under the authority of the Court and the Settling
Parties intend that the Court

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[exhibit10220160630finals042.jpg]
42 retain jurisdiction for the purpose of, inter alia, entering orders,
providing for awards of attorneys’ fees and Litigation Expenses, and enforcing
the terms of the Settlement. 63. The construction, interpretation, operation,
effect and validity of this Settlement, and all documents necessary to
effectuate it, shall be governed by the internal laws of the State of Colorado
without regard to that State’s choice-of-law principles, except to the extent
that federal law requires that federal law governs. 64. To the extent there are
disputes regarding the interpretation of any term of this Settlement, the
Settling Parties will attempt to resolve any such dispute in good faith,
including, if necessary, through further mediation discussions with Jed Melnick.
If the Settling Parties fail to resolve the dispute, or in the event of a breach
of the terms of the Settlement, any non-breaching Settling Party shall be
entitled to bring an action seeking to enforce those provisions, and the
exclusive forum for any such action shall be this Court. The prevailing Settling
Party in any such action to enforce these provisions of the Settlement shall be
entitled to recover their reasonable attorneys’ fees and expenses incurred in
connection with remedying the breach. 65. This Settlement shall not be construed
more strictly against one Settling Party than another merely by virtue of the
fact that it, or any part of it, may have been prepared by counsel for one of
the Settling Parties, it being recognized that it is the result of arm’s-length
negotiations among the Settling Parties and all Settling Parties have
contributed substantially and materially to the preparation of this Settlement.
66. Nothing in this Settlement, or the negotiations or proceedings relating to
the Settlement, is intended to or shall be deemed to constitute a waiver of any
applicable privilege or immunity, including, without limitation, the
attorney-client

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[exhibit10220160630finals043.jpg]
43 privilege, the joint defense privilege, the accountants’ privilege, or work
product immunity; further, all information and documents transmitted between
Lead Plaintiff’s Counsel and Defendants’ Counsel in connection with this
Settlement shall be kept confidential and shall be inadmissible in any
proceeding in any U.S. federal or state court or other tribunal or otherwise, in
accordance with Rule 408 of the Federal Rules of Evidence as if such Rule
applied in all respects in any such proceeding or forum. 67. Except where
specifically noted, all time periods set forth in this Settlement will be
computed in calendar days and pursuant to the terms of Rule 6(a) of the Federal
Rules of Civil Procedure.

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[exhibit10220160630finals044.jpg]
44 IN WITNESS WHEREOF, the Settling Parties hereto have caused this Settlement
to be executed, by their duly authorized attorneys, as of June 30, 2016.
SHEPHERD, FINKELMAN, MILLER & SHAH, LLP s/ James E. Miller James E. Miller
Laurie Rubinow 65 Main Street Chester, CT 06412 Telephone: (860) 526-1100
Facsimile: (866) 300-7367 Email: jmiller@sfmslaw.com Email: lrubinow@sfmslaw.com
Nathan Zipperian 1625 N. Commerce Pkwy., Suite 320 Ft. Lauderdale, FL 33326
Telephone: (954) 515-0123 Facsimile: (866) 300-7367 Email:
nzipperian@sfmslaw.com Valerie L. Chang Chiharu Sekino 401 West A Street, Suite
2350 San Diego, CA 92101 Telephone: (619) 235-2416 Facsimile: (866) 300-7367
Email: vchang@sfmslaw.com Email: csekino@sfmslaw.com EDGAR LAW FIRM, LLC David
W. Edgar (Bar No. 41956) The Spectrum Building 1580 Lincoln Street, Ste. 1100
Denver, CO 80203 Tel: (720) 529-0505 Facsimile: (303) 486-0001 Email:
dwe@edgarlawfirm.com Attorneys for Lead Plaintiff, The United Food and
Commercial Workers Union GIBSON, DUNN & CRUTCHER LLP s/ Gregory J. Kerwin
Gregory J. Kerwin Allison K. Kostecka 1801 California Street, Suite 4200 Denver,
CO 80202 Telephone: (303) 298-5700 Facsimile: (303) 313-2829 Email:
gkerwin@gibsondunn.com Email: akostecka@gibsondunn.com FORTIS LAW PARTNERS LLC
Stephen M. DeHoff Jeffrey M. Brenman 1900 Wazee Street, Suite 300 Denver, CO
80202 Telephone: (720) 904-6009 Facsimile: (303) 675-5200 Email:
sdehoff@fortislawpartners.com Email: jbrenman@fortislawpartners.com Attorneys
for Defendants Advanced Emissions Solutions, Inc., Michael D. Durham, C. Jean
Bustard, Sharon M. Sjostrom, Christine B. Amrhein, and L. Heath Sampson

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[exhibit10220160630finals045.jpg]
45 and Participating Food Industry Employers Tri-State Pension Fund MORRISON &
FOERSTER LLP s/ Steven M. Kaufmann Steven M. Kaufmann Nicole K. Serfoss 370
Seventeenth Street, Suite 4200 Denver, CO 80202 Telephone: (303) 592-2246
Facsimile: (303) 592-1520 Email: skaufmann@mofo.com Email: nserfoss@mofo.com
Attorneys for Defendant Mark H. McKinnies

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[exhibit10220160630finals046.jpg]
46 CERTIFICATE OF SERVICE I hereby certify that on [date], a true and correct
copy of the foregoing STIPULATION AND AGREEMENT OF SETTLEMENT was served via the
ECF/PACER system on counsel of record. s/

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