EXHIBIT 10.19
DEVELOPMENT AND FIELD VALIDATION AGREEMENT
THIS AGREEMENT (this "Agreement") is made by and between Thermo
Environmental Instruments Inc., a California corporation having a place
of business at 00 Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000
("Thermo"), and ADA-ES Inc., a Colorado corporation having an office
and place of business at 0000 XxxxxXxxx Xxx, X, Xxxxxxxxx, Xxxxxxxx
00000 ("ADA-ES"). Thermo and ADA-ES are sometimes hereinafter referred
to individually as a "Party" and collectively as the "Parties".
WHEREAS, Thermo designs and manufactures stack gas probes,
analyzers, calibrators and continuous emission monitoring systems; and
WHEREAS, ADA-ES makes and sells Flue Gas Mercury Control
Technology ("FGMCT") including systems for removing mercury from flue
gas ; and
WHEREAS, the Parties are interested in developing and performing
field validation tests on a Mercury CEMS (as defined below);
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. Definitions. For purposes of this Agreement:
1.1 "Date of this Agreement" shall mean the date of complete execution
of this Agreement.
1.2 "Mercury CEMS" shall mean the continuous emission monitoring
system for monitoring mercury (as in stack gases) developed under the
Program, as well as the individual components comprising the monitoring
system, including but not limited to, stack probes, converter modules,
sample transport mechanisms, mercury detector modules, and mercury
calibration devices.
1.3 "FGMCT" shall mean ADA-ES' system for removing mercury from flue
gas.
1.4 "Party" shall mean Thermo or ADA-ES and "Parties" shall mean
Thermo and ADA-ES.
1.5 "Program" shall mean the project, in accordance with Section 2
and the other provisions of this Agreement, to develop a continuous
emission monitoring system for monitoring mercury in flue gas.
1.6 "Territory" shall mean North America.
2. The Program.
2.1 Promptly after the Date of this Agreement the Parties shall
commence the Program, and thereafter the Parties shall use diligent
efforts to complete the Program by June 1, 2005, the target date for
initial commercial availability of the Mercury CEMS. The employees of
each Party shall collaborate and cooperate with one another at all
times in performing the work described in this Agreement, by, without
limitation, exchanging and using materials and information and
providing all relevant data, information and results useful to the
purposes of this Agreement to each Party, without restriction, other
than as specified in this Agreement.
2.2 Under the Program:
(a) Thermo shall have principal responsibility for design of hardware,
firmware, software and overall product development management
associated with the Mercury CEMS, as well as manufacturing (including
assembly and test) of commercial versions of the Mercury CEMS ; and
(b) ADA-ES shall have principal responsibility for field validation of
the Mercury CEMS, including extended operation of the Mercury CEMS
under a variety of flue gas matrices and power generation coal sources.
Furthermore, ADA-ES will provide performance feedback and design
improvement suggestions to Thermo on a regular basis with a goal that a
commercially viable Mercury CEMS can be introduced to the market.
2.3 A preliminary set of functional specifications for the Mercury CEMS
is set forth in Exhibit A, attached to and forming an integral part of
this Agreement. If either Party requests changes to these
specifications, the Parties shall negotiate in good faith until they
reach mutually agreeable specification changes, which shall be written
and provided to each Party, and changes shall be implemented only if
the Parties agree to such changes.
2.4 ADA-ES shall pay Thermo, only for work authorized and performed as
part of the Program, not more than four hundred thousand dollars
($400,000) in accordance with monthly invoices tendered by Thermo as
follows:
(a) eight invoices that total up to $175,000, for May 2004 - December
2004*; and
(b) five invoices that total up to $166,670, for January 2005 - May
2005, and one invoice of up to $33,330 for June 2005.
Invoices shall be sent to ADA-ES on or about the first day of each
month, and shall be paid in full by ADA-ES within thirty (30) days of
receipt. Unpaid invoices shall bear interest at one percent (1%) per
month until paid.
*Prior to the Date of this Agreement Thermo has invoiced ADA-ES, and
ADA-ES shall pay Thermo, $25,000 to reimburse Thermo for material and
labor costs associated with work at the Xxxxxx Mercury CEMS evaluation
site.
3. Intellectual Property. Subject to the terms of this Agreement,
all intellectual property made or developed under the Program,
including but not limited to designs, drawings, software, know-how, and
other documentation:
(a) if developed by Thermo, shall be solely owned by Thermo;
(b) if developed by ADA-ES, shall be solely owned by ADA-ES; and
(c) if jointly developed by the Parties, shall be jointly owned by the
Parties.
Notwithstanding anything to the contrary elsewhere in this Agreement,
the Parties agree that Thermo shall have a non-exclusive, worldwide
right to use the intellectual property developed by ADA-ES pursuant to
(b) of this Section 3 ("ADA-ES IP") in the manufacture and distribution
(marketing and selling) of the Mercury CEMS; such right shall be
royalty- free except for coal-fired applications in the Territory, and
if Thermo at its option elects to utilize ADA-ES IP in the manufacture
and distribution of Mercury CEMS, then Thermo shall pay a royalty to
ADA-ES on sales of Mercury CEMS for coal-fired applications in the
Territory in an amount to be negotiated in good faith by the Parties
and based on the contribution of ADA-ES IP to the Mercury CEMS.
4. Manufacture and Sale of Mercury CEMS.
Following successful completion of the Program, Thermo shall
manufacture and distribute (market and sell) the Mercury CEMS and ADA-
ES ESC shall purchase from Thermo all its requirements of continuous
emission monitoring systems for monitoring mercury for use in
conjunction with the FGMCT, in accordance with the Distribution
Agreement between the Parties of even date hereof.
5. Insurance and Limitation of Damages.
5.1 During the term of this Agreement and for not less than three (3)
years after any termination thereof, each Party shall keep in force,
with an insurer rated B+ or better by A.M. Best, workers' compensation
insurance in conformity with the laws of the jurisdiction in which it
is to perform work hereunder, and public liability insurance in an
amount not less than two million U.S. dollars ($2,000,000.) combined
single limit, for comprehensive general liability coverage, including
products liability and contractual liability.
5.2 Subject to limitation of liability provisions contained herein,
each Party shall indemnify, defend and hold harmless the other Party,
its parent, subsidiaries and affiliates, and their respective officers,
directors, shareholders and employees, from and against any and all
damages, liabilities, actions, causes of action, suits, claims,
demands, losses, costs and expenses (including, without limitation,
reasonable attorney's fees, disbursements and court costs) for personal
injury or property damage to the extent arising from or in connection
with the negligence or willful misconduct of the indemnifying Party,
its agents, employees, representatives or contractors. The Party
seeking indemnification shall provide prompt notice of any third-party
claim to the Party from whom indemnification is sought, and the
indemnifying Party shall have the right to assume exclusive control of
the defense of such claim with counsel acceptable to the indemnified
Party or, at the option of the indemnifying Party and with the written
consent of the indemnified Party, to settle the same. The indemnified
Party agrees to cooperate reasonably with the indemnifying Party in
connection with the performance of the indemnifying Party's
obligations, and in the event that the indemnifying Party fails to
perform its defense obligations hereunder, the indemnified Party shall
have the right to do so at the indemnifying Party's expense.
5.3 In no event shall either Party be liable to the other for any
indirect, special, consequential, or incidental damages (including
without limitation damages for loss of use of facilities or equipment,
loss of revenue, loss of profits or goodwill) regardless of whether
such Party is negligent or has been informed of the possibility of such
damages.
6. Term and Termination.
6.1 This Agreement and the Program shall commence as of the Date of
this Agreement, and shall continue until the earlier of completion of
the Program or termination pursuant to this Section 6 or Section 11.
6.2 Either Party may terminate this Agreement at any time if the other
Party fails to perform any material obligation hereunder by giving such
other Party thirty (30) days advance written notice of the intention to
terminate and the reasons therefore; provided, however, that should
such other Party during the thirty-day period perform such obligations,
or commence to and diligently pursue performance of such obligations
and such performance shall take longer than thirty days, this Agreement
shall continue in effect.
6.3 Either Party may terminate this Agreement without cause upon not
less than six (6) months notice to the other Party.
6.4 Thermo and ADA-ES shall cooperate to minimize the costs of any
termination of this Agreement. Termination of this Agreement shall not
discharge any obligation or prejudice any claim for damages or other
lawful rights and remedies which a Party has against the other.
6.5 Sections 3, 5, 6.4, 6.5, 7, 8, 9, 10, 12, 15, 17, and 18 shall
survive any termination of this Agreement.
7. Approvals and Compliance with Law. Each Party shall comply with
all statutes, laws, rules, regulations, ordinances, and orders of all
governmental and other public authorities relating to the Program and
this Agreement and shall be responsible for obtaining any approvals
necessary or appropriate for fulfilling its obligations hereunder.
8. Representations and Warranties. Each Party represents and warrants
that it has the full right and power to enter into this Agreement and
perform its obligations as set forth herein, and that it knows of no
conflicts, obligations, or rights of third parties which would prevent
the performance of the activities contemplated by this Agreement.
Neither Party makes any warranty or representation that the Mercury CEM
developed under the Program will be suitable for monitoring mercury,
but each Party will use all reasonable efforts towards achieving the
goal of a commercially viable system for continuous monitoring of
mercury in stack gases.
9. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, effective upon receipt, and shall be
deemed to have been sufficiently given if delivered in person, express-
delivered (with fees prepaid) by public or private carrier, or
transmitted by telecopier (with confirmation by prepaid first-class
mail), to the address first set forth above, to the attention of
"President", or to such other address as either Party shall notify the
other in writing, and a copy of any notice given to Thermo under this
Agreement shall be sent to General Counsel, Thermo Electron
Corporation,
00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000-0000.
10. Independent Parties. Each Party shall be deemed to be an
independent contractor and not an agent or representative of the other.
11. Force Majeure. If a Party is prevented from performing any of its
obligations hereunder as a result of fire, flood, storm, war,
insurrection, acts of governmental authorities, or other events beyond
its control, such obligations shall be suspended and a reasonable time
shall be given for completion of performance upon termination of the
event of force majeure. If an event of force majeure cannot be cured
and performance of a material obligation cannot be resumed within a
period of thirty (30) days, either Party may terminate this Agreement
on ten (10) days prior written notice.
12. Costs and Expenses. Except as otherwise provided herein, each
Party shall bear its own costs and expenses in connection with the
Program and the performance of this Agreement.
13. Entire Agreement. This Agreement constitutes the entire
understanding between the Parties with respect to its subject matter
and cancels and supercedes all prior verbal agreements and all other
written agreements with respect to such subject matter, except that
the Confidentiality Agreement of October 10, 2003 and the Distribution
Agreement of even date hereof between the Parties shall remain in force
in accordance with their terms. In the event of any conflict between
the terms of this Agreement and those of any other document such as a
purchase order or quote, the terms of this Agreement shall control
unless the other document makes specific reference to this Agreement
and is signed by both Parties.
14. Waiver and Modification. The waiver by either Party of a default
or a breach by the other Party of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent default or
breach. No modification or amendment of this Agreement shall be
effective unless made in writing and signed by both Parties.
15. Publicity. Before a Party issues any publication using the name
of the other Party, such issuing Party shall obtain the prior written
consent of the other Party, which shall not unreasonably be withheld.
16. Assignment. Neither Party may without prior written consent of
the other, assign or otherwise transfer any rights or obligations
related to this Agreement; provided, however, that either Party may
without consent of, but upon notice to, the other Party assign or
transfer this Agreement to a successor or transferee of substantially
the entire business of such Party related to this Agreement or to a
company who controls or is controlled by such Party, with "control" for
purposes of this Section meaning ownership of more than fifty percent
(50%) of the voting rights relative to the company.
17. Governing Law. This Agreement shall be governed by the laws of
the Commonwealth of Massachusetts, without giving effects to its
conflicts of laws principles.
18. Waiver of Jury Trial. In the event of any legal proceeding
between the Parties relative to this Agreement, neither Party may claim
the right to a trial by jury, and both Parties waive any right they may
have under applicable law or otherwise to a right to a trial by jury.
19. Severability. Should there be a determination by a competent
authority that one or more provisions of this Agreement is invalid or
not enforceable, the remainder of this Agreement shall remain in
effect, and the Parties shall agree on new provisions whose effect
shall approximate as closely as possible that of the invalid or
unenforceable provisions.
The individuals executing this Agreement hereby represent and warrant
that they are empowered and duly authorized to so execute this
Agreement on behalf of the Parties they represent.
IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate counterparts, each of which shall be regarded as an original,
effective as of the date of its full execution.
Thermo Environmental Instruments Inc. ADA-ES, Inc.
("Thermo") ("ADA-ES")
By:/s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- -----------------------
Name: Xxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: General Manager, Title: President
Air Quality Instruments
Date: April 14, 2004 Date: April 16, 2004
