EXHIBIT 10.12
THIS AMENMENT No. 1 to the DISTRIBUTION AGREEMENT is made and entered into
as of the 15th day of August 2003 by Earth Sciences, Inc., a Colorado
corporation ("ESI") and ADA-ES, Inc., a Colorado corporation ("ADA-ES").
RECITALS
WHEREAS, ESI and ADA-ES have entered into a Distribution Agreement
dated March 17, 2003 (the "Distribution Agreement") in order to:
(a) separate and divide the existing businesses of ESI so that the
ADA-ES Business (as defined below) shall be owned directly by ADA-ES, and
(b) distribute, following such separation and division, as a dividend
to the holders of shares of common stock, $.01 par value per share, of ESI
(the "ESI Common Stock") all of the outstanding shares of common stock, no
par value, of ADA-ES (the "ADA-ES Common Stock") held by ESI; and
WHEREAS, ESI and ADA-ES have determined that it is necessary and desirable
to amend the Distribution Agreement to provide for the accumulation and sale of
fractional shares to satisfy the requirements of the U.S. Securities and
Exchange Commission for registration of the spin-off contemplated in the
Distribution Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in the Distribution Agreement and this Amendment No. 1, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. General. Unless otherwise defined herein or unless the
context otherwise requires, the capitalized terms shall have the meanings set
forth in the Distribution Agreement.
SECTION 1.02. References. References to a "Section" are, unless otherwise
specified, to one of the Sections in the Distribution Agreement, unless
otherwise specified as one of the Sections of this Amendment No. 1.
ARTICLE II
AMENDMENT
The parties agree to amend Sections 3.02 and Section 3.03 of the Distribution
Agreement by replacing those sections in their entirely with the language shown
below.
SECTION 3.02. The Distribution.
(a) Duties and Obligations of ESI. Subject to the conditions contained
herein, on the Distribution Date, but effective immediately following the close
of business on the Distribution Date, ESI shall:
(i) deliver to the Agent the share certificates representing the
ADA-ES Common Shares issued to ESI by ADA-ES pursuant to Section 2.02
hereof, endorsed by ESI in blank, for the benefit of the ESI Holders; and
(ii) instruct the Agent to distribute, as soon as practicable
following consummation of the Distribution, to the ESI Holders the
following:
(A) one share of ADA-ES Common Stock for every ten shares of ESI
Common Stock; and
(B) cash, if applicable, in lieu of fractional shares obtained in the
manner provided in Section 3.03 hereof.
(b) Duties and Responsibilities of ADA-ES. ADA-ES shall provide, or cause
to be provided, to the Agent sufficient certificates representing ADA-ES Common
Stock in such denominations as the Agent may request in order to effect the
Distribution. All shares of ADA-ES Common Stock issued pursuant to the
Distribution will be validly issued, fully paid and nonassessable and free of
any preemptive (or similar) rights.
SECTION 3.03. Fractional Shares
(a) No Fractional Shares. Notwithstanding anything herein to the contrary,
no certificate or scrip evidencing a fractional share of ADA-ES Common Stock
shall be issued in connection with the Distribution, and any such fractional
share interests to which a ESI Holder would otherwise be entitled will not
entitle such ESI Holder to vote or to any rights of a stockholder of ADA-ES. In
lieu of any such fractional shares, each ESI Holder who, but for the provisions
of this Section 3.03, would be entitled to receive a fractional share interest
of ADA-ES Common Stock pursuant to the Distribution shall be paid cash, without
any interest thereon, as hereinafter provided. ESI shall instruct the Agent to
determine the number of whole shares and fractional shares of ADA-ES Common
Stock allocable to each ESI Holder, to aggregate all such fractional shares into
whole shares, to sell the whole shares obtained thereby in the open market at
the then prevailing prices on behalf of ESI Holders who otherwise would be
entitled to receive fractional share interests and to distribute to each such
ESI Holder his, her or its ratable share of the total proceeds of such sale,
after making appropriate deductions of the amount required for federal income
tax withholding purposes and after deducting any applicable transfer taxes. All
brokers' fees and commissions incurred in connection with such sales shall be
paid by ADA-ES.
(b) Unclaimed Stock or Cash. Any ADA-ES Common Stock or cash in lieu of
fractional shares and dividends or distribution with respect to ADA-ES Common
Stock that remain unclaimed by any ESI Holder 180 days after the Distribution
Date shall be returned to ESI and any such ESI Holders shall look only to ESI
for the ADA-ES Common Stock, cash, if any, in lieu of fractional share interests
and any such dividends or distribution to which they are entitled, subject in
each case to applicable escheat or other abandoned property laws.
(c) Beneficial Owners. Solely for purposes of computing fractional share
interests pursuant to Section 3.03(a), the beneficial owner of shares of ESI
Common Stock held of record in the name of a nominee will be treated as the
holder of record of such shares.
ARTICLE III
NO OTHER CHANGES
The parties agree that no other change or alteration of the Distribution
Agreement is intended by this Amendment except for the replacement of the
sections noted above.
(BALANCE OF THIS PAGE INTENTIONALLY BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
the Distribution Agreement to be duly executed as of the day and year first
above written.
EARTH SCIENCES, INC.
By: /s/ Xxxx X XxXxxxxxx
Name: Xxxx X XxXxxxxxx
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Title: President
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ADA-ES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
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Title: President
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