Exhibit 10.1
LICENSE AGREEMENT
THIS
LICENSE AGREEMENT (the "Agreement") is entered into by and
between,
ADA-ES Inc., a Colorado corporation having its principal place of
business at
8100 South Park Way, Unit B, Littleton, CO 80120-4525 ("Licensor")
and
ADA-NexCoal, LLC, a Delaware limited liability company having its
principal
place of business at 8100 South Park Way, Unit B, Littleton, CO
80120-4525
("Licensee") to be effective as of November 3, 2006 (the "Effective
Date").
Licensor and Licensee are sometimes hereinafter individually
referred to as a
"party" and collectively as the "parties."
RECITALS
WHEREAS, Licensor is the sole owner of all right, title and
interest in and
to the inventions and subject matter disclosed in the Patents (as
defined
below); and
WHEREAS, Licensor has agreed to license the Patents to Licensee in
return
for 100% of the ownership interest in Licensee, which consists of
100 units of
interest therein (the "Units"), the rights and obligation as to
which are as
described in that certain Operating Agreement of Licensee dated as
of November
3, 2006, as the same may be amended from time to time (the
"Operating
Agreement").
NOW,
THEREFORE, in consideration of the mutual covenants and promises
made
in this Agreement, the parties hereto, intending to be legally
bound hereby,
agree to the terms and conditions as follows:
1.
DEFINITIONS
Unless otherwise elsewhere defined herein, the following
capitalized terms
shall have the following meanings:
1.1.
"Affiliate" has the meaning ascribed to such term in the
Purchase
Agreement.
1.2.
"Board" has the meaning ascribed to such term in the Amended
and
Restated Operating Agreement.
1.3.
"Chemicals Business" means the business of marketing and
selling
Chemicals, Additives and Technical Engineering Services (as defined
in the
Chemicals, Equipment and Technical Engineering Services Supply
Agreement entered
into by and between Licensee and Licensor and attached hereto as
Exhibit 1),
specifically pertaining to NOx and mercury emissions controls from
cyclone
coal-fired boilers.
1.4.
"Insolvency" has the meaning ascribed to such term in the
Purchase
Agreement.
1.5.
"Improvements" means those modifications, revisions,
derivations,
updates, enhancements and improvements of the Technology related to
the
reduction of NOx and mercury emissions from cyclone boilers that
are conceived,
discovered, created or developed by or on behalf of Licensor, which
Improvements
will automatically and without any further action on the part of
Licensor or
Licensee, become part of the Technology (and part of the Technology
License).
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1.6.
"Know-How" means technical information, ideas, concepts,
confidential
information, trade secrets, know-how, discoveries, inventions,
processes,
methods, formulas, source and object codes, data, programs, other
works of
authorship, improvements, developments, designs and techniques
related to the
reduction of NOx and mercury emissions from cyclone coal-fired
boilers other
than as embodied in the Patents, that are owned or controlled by
Licensor during
the term of this Agreement and that are necessary or desirable to
use the
Patents for the purpose of the license granted in Section 2
hereof.
1.7.
"Licensed Property" means any products or methods related to
the
reduction of NOx and mercury emissions from cyclone coal-fired
boilers, whether
owned by Licensor or licensed by Licensor now or hereafter, that
are (i) covered
by any Valid Claim(s) contained in any of the Patents, and/or (ii)
based on the
products, processes or methods developed using the Technology.
1.8.
"Loss" has the meaning ascribed to such term in the Purchase
Agreement.
1.9.
"Patents" means: (i) U.S. Patent No. 6,773,471 B2 entitled "Low
Sulfur
Coal Additive for Improved Furnace Operation" issued on August 10,
2004; (ii)
U.S. Patent No. 6,729,248 B2 entitled "Low Sulfur Coal Additive for
Improved
Furnace Operation" issued on May 4, 2004; (iii) Patent Application
No.
10/209,083 entitled "Low Sulfur Coal Additive for Improved Furnace
Operation"
filed July 30, 2002; (iv) U.S. Provisional Patent Application
Serial No.
60/730,971 entitled "Additives for Catalysis of Mercury Oxidation
in Coal-Fired
Power Plants" filed October 27, 2005; and (v) any foreign
counterpart
applications or patents, reissues or extensions, continuations,
continuations-in-part or divisions relating to any of the preceding
patents and
patent applications, together with any other patents (U.S. or
foreign and even
if not listed herein) that share a common claim of priority with
said patents or
that, as mutually agreed upon in good faith by the parties, cover
inventions
substantially similar to said patents.
1.10. "Purchase Agreement" means the Purchase and Sale and
Contribution
Agreement as proposed to be entered into among Licensor, Licensee
and NexGen
Refined Coal, LLC.
1.11. "Section 45 Business" means that Licensee shall have
received, prior
to January 1, 2009, or such later date as may become applicable
based on
extensions thereto as approved by the Internal Revenue Service (the
"IRS"), a
written private letter ruling ("PLR") or other indication from the
IRS pursuant
to which the Licensee may sell, and Licensee has entered into
agreements to
sell, a qualified facility to a third party, and such third party
would be
thereafter entitled to Section 45 Tax Credits as a result of
operating such
facility, specifically pertaining to NOx and mercury emissions
controls from
cyclone coal-fired boilers.
1.12. "Section 45 Tax Credits" means the tax credits provided for
under
Section 45 of the Internal Revenue Code.
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1.13. "Technology" means the Patents and the Know-How
specifically
pertaining to NOx and mercury emissions control for cyclone
coal-fired boilers,
as well as any Know-How developed or acquired after the Effective
Date which is
based on the knowledge contained in the Patents, whether or not
such Know-How
becomes the subject of a patent application during the term of this
Agreement;
provided, however, that such Know-How shall be a trade secret of
Licensor until
such time as it is the subject of a published patent application.
As used
herein, Patents shall include any and all continuations,
continuations-in-part,
and divisionals, and all patents issuing which are based on such
applications,
and all reissues, reexaminations, or extensions thereof, as well as
any foreign
counterparts, continuations, continuations in part or divisions
thereof and
patents and patent applications on any improvements,
advancements,
modifications, revisions or developments that are developed by or
for Licensor.
1.14. "Territory" means the United States and each foreign country
in which
the Patents exist or in which Licensor intends or has been
requested by Licensee
to file patent applications related to the Technology.
1.15. "Valid Claim(s)" means any claim contained in an issued and
unexpired
patent included within the Patents that has not been held
unenforceable,
unpatentable or invalid by a decision of a court or other
governmental agency of
competent jurisdiction, or unappealable or unappealed within the
time allowed
for appeal, and that has not been admitted to be invalid or
unenforceable
through reissue or disclaimer.
2. GRANT OF
LICENSE.
2.1.
In consideration of the issuance by Licensee of the Units, and
in
accordance with the terms and conditions of this Agreement,
Licensor hereby
grants to Licensee a fully paid-up, royalty-free, non-transferable
license under
the Technology to make or have made the Licensed Property and to
use, sell,
lease, offer to sell, import or otherwise dispose of the Licensed
Property in
the Territory (the "Technology License").
2.2.
In addition, as Licensor shall at all times during the term of
this
Agreement promptly and fully discloses in writing to Licensee all
Improvements,
and each of such Improvements shall automatically become part of
the Technology
and subject to the Technology License.
2.3.
Licensee may, from time to time, sub-license to any third party
or
parties any or all rights under the Technology License (each a
"Sublicensee")
whereupon each Sublicensee will become a third party beneficiary to
this
Agreement.
2.4.
The Technology License shall be exclusive even as to Licensor
for
purposes of engaging in the Chemicals Business or a Section 45
Business for the
purpose of monetization of Internal Revenue Code Section 45 tax
credits
available through the American Jobs Creation Act of 2004, or its
equivalent in a
jurisdiction other than the United States, and to do any and all
things
necessary or incidental thereto.
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3. PATENT
MARKING
Licensee agrees that all Licensed Property shall be marked (e.g.,
with U.S.
Patent Nos. 6,773,471 B2, or 6,729,248 B2 or "Patents Pending," as
appropriate)
in a manner sufficient to give proper legal notice under the
applicable patent
laws. In the event that it is not practicable to affix the patent
marking onto
the Licensed Property directly, Licensee will affix the patent
numbers or the
term "Patents Pending" to literature that accompanies the Licensed
Property in a
manner sufficient to give proper legal notice under the applicable
patent laws.
With respect to any Licensed Property for which a patent issues, as
soon as
reasonably practicable after the issuance of the patent, Licensee
shall mark the
Licensed Property or the literature relating thereto with the
patent number of
any patent that is licensed to Licensee pursuant to this
Agreement.
4. TECHNICAL
ASSISTANCE AND IMPROVEMENTS.
4.1.
Licensor shall be available to provide any technical assistance
relating to the development, marketing and deployment of the
Licensed Property
without charge to Licensee provided, however, that Licensee shall
pay all of
Licensor's reasonable, related travel and lodging expenses that
have been
pre-approved in writing by Licensee.
4.2.
Licensor shall promptly and fully advise Licensee of any
Improvements,
it being understood that any Improvements made by Licensor during
the term of
this Agreement shall be the property of Licensor, and shall be
included within
the Licensed Property and the Technology and thereby made a part of
the
Technology License granted to Licensee for the remaining duration
of this
Agreement. The expenses of filing and prosecuting any patent
application
relating to such Improvements shall be borne by Licensor, if deemed
reasonable
by unanimous consent of the Board governing the Licensee.
4.3.
Any inventions or improvements that may be developed during the
term
of this Agreement by Licensee or by Licensee and Licensor jointly
with respect
to the subject matter of the Technology shall be assigned to
Licensor and shall
be included within the Licensed Property and the Technology and
thereby made a
part of the Technology License granted to Licensee hereunder for
the remaining
duration of this Agreement. The expenses of filing and prosecuting
any patent
application relating to any such improvements shall be borne by
Licensor, if
deemed reasonable by unanimous consent of the Board governing the
Licensee;
provided, however that Licensee shall reasonably assist Licensor,
at Licensor's
sole expense, to obtain full ownership rights, including, but not
limited to,
patent rights in and to the subject improvements or inventions.
5. TERM AND
TERMINATION UPON DEFAULT.
5.1.
Term. This Agreement shall remain in full force and effect for as
long
as any patent application related to the Technology is pending in
any domestic
or foreign patent office or until the expiration of the last to
expire of any
patent included in the Technology, unless sooner terminated
pursuant to Sections
5.2 or 5.3.
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5.2.
Termination Upon the Occurrence of Certain Events. Licensor shall
have
the right to terminate this Agreement immediately in the event of
the Insolvency
of Licensee or the dissolution or liquidation of Licensee in
accordance with the
terms of the Operating Agreement.
5.3.
Othe
