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Exhibit 10.1  

 
 

VENDINGDATA CORPORATION
  (FORMERLY CASINOVATIONS INCORPORATED)    
    

 
 

AMENDED AND RESTATED
  1999 DIRECTORS' STOCK OPTION PLAN
  AS APPROVED BY THE BOARD OF DIRECTORS ON
  JULY 15, 2003 AND SEPTEMBER 9, 2003 AND AS ORIGINALLY ADOPTED
  ON SEPTEMBER 13, 1999    

1.     PURPOSE  

        The Amended and Restated 1999 Directors' Stock Option Plan (the "Plan") of VendingData Corporation, a Nevada corporation (the "Company") is intended to promote
the interests of the Company by encouraging members of the Board of Directors of the Company (the "Board") who are not employed as regular salaried officers or employees of the Company (hereinafter
referred to as "Non-Employee Directors" or "Optionees") the opportunity to participate in a stock option plan in order to encourage Non-Employee Directors to take a
long-term view of the affairs of the Company; to attract and retain new, top-notch Non-Employee Directors; and to aid in rewarding Non-Employee
Directors for their services to the Company. 

2.     ADMINISTRATION  

        The Plan shall be administrated by a Committee (the "Committee") of not less than two directors of the Company selected by, and serving at the pleasure of, the
Board. If no committee has been appointed, a reference to "Committee" shall be deemed to refer to the Board. The Committee shall not have any discretion to determine or vary any matters that are fixed
under the terms of the Plan including, without limitation, which individuals shall receive option awards, how many shares of the Company's stock shall be subject to each such option award, what the
exercise price of stock covered by an option shall be, and what means of payment shall be acceptable. 

        The
Committee shall have the authority to otherwise interpret the Plan and make all determinations necessary or advisable for its administration. 

        The
Committee's decisions under the Plan shall be subject to the approval of the Board. 

3.     ELIGIBILITY  

        Only Non-Employee Directors of the Company will be eligible to be granted awards. 

4.     STOCK SUBJECT TO THE PLAN  

        The stock from which awards may be granted shall be the Company's, $.001 par value, common stock ("Common Stock"). When options are exercised, the Company may
either issue authorized but unissued shares of Common Stock or transfer issued Common Stock held in its treasury. The total number of shares of Common Stock which may be granted as stock options shall
not exceed 300,000. If an option expires, or is otherwise terminated prior to its exercise, the Common Stock covered by such option immediately prior to such expiration or other termination shall
continue to be available for grant under the Plan. 

5.     GRANT AND AMOUNT OF OPTIONS  

        The date of the initial grant for a Non-Employee Director commencing his or her term shall be the date that he or she is elected to the Board by the
stockholders at any special or annual meeting. 

 

Beginning
on January 1, 2004, the initial option grant shall be to purchase 10,000 shares of Common Stock (subject to adjustment pursuant to Section 7). 

        All
annual awards of options shall be granted in January, of each year, with the first annual grant effective January 1, 1999. Beginning in 2004, annual grants will be made, on
the date of the annual or special meeting of stockholders at which directors are elected, to purchase 10,000 shares of Common Stock (subject to adjustment pursuant to Section 7). 

        In
addition, subject to stockholder ratification, the Board is permitted and authorized to provide all Non-Employee Directors currently serving on the Board as of
September 9, 2003 a one-time grant to purchase 50,000 shares of Common Stock for a five-year term effective as of September 9, 2003 (subject to adjustment
pursuant to Section 7). 

6.     TERMS AND CONDITIONS OF OPTIONS  

        Options shall be designated non-qualified options or not qualified as Incentive Stock Options under Section 422A of the Internal Revenue Code
of 1954, as amended (the "Code"), and shall be evidenced by written instruments approved by the Committee. Such instruments shall conform to the following terms and conditions. 

 6.1.    Option Price  

        The option price shall be 100% of the fair market value of the Common Stock granted under the option on the date of grant. For purposes of this section, the fair
market value per share shall be (a) the last reported sale price of the Common Stock on the NASDAQ National Market System, or on such other stock exchange that the Common Stock may be listed
from time-to-time, (the "Reported Price") that day or, if no sale of Common Stock is recorded on that day, then on the next preceding day on which there was such a sale or
(b) if the Common Stock is not listed on NASDAQ National Market System or on any other stock exchange, the fair market value as determined by the Board or a committee designated by the Board
(the "Option Price"). The Option Price shall be paid (x) in cash, (y) in shares of Common Stock having a fair market value equal to such option price or (z) in a combination of
cash and Common Stock. The fair market value of shares of Common Stock delivered to the Company pursuant to the immediately preceding sentence shall be determined on the basis of the Reported Price on
the day of exercise or, if
there was no such sale on the day of exercise, on the day next preceding the day of exercise on which there was such a sale. 

 6.2.    Exercise and Term of Options  

        Each option shall be exercisable, and shall vest in full, six months and one day following the later of either the date of grant or stockholder approval of the
Plan. 

        Except
in special circumstances, each option shall expire the later of the tenth anniversary of the date of its grant or three months after the Optionee ceases to serve as a member of
the Board. 

        After
becoming exercisable, each installment shall remain exercisable until expiration or termination of the option. After becoming exercisable, an option may be exercised by the
Optionee from time-to-time, in whole or part, up to the total number of shares with respect to which it is then exercisable. The Committee may provide that payment of the
option exercise price may be made following delivery of the certificate for the exercised shares. 

        Upon
the exercise of a stock option, the purchase price will be payable in full in cash or its equivalent in property acceptable to the Company. In the discretion of the Committee, the
purchase price may be paid by the assignment and delivery to the Company of shares of Common Stock or a combination of cash and such shares equal in value to the purchase price. Any shares of Common
Stock so assigned and delivered to the Company in payment or partial payment of the purchase price 

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will
be valued at fair market value on the exercise date. Upon the exercise of a non-qualified stock option, the Optionee may (a) direct the Company to withhold from the shares of
Common Stock to be issued to the Optionee the number of shares necessary to satisfy the Company's obligation to withhold federal taxes, such determination to be based on the shares' fair market value
on the date of exercise, (b) deliver to the Company sufficient shares of Common Stock to satisfy the Company's withholding obligations, based on the shares' fair market value as of the date of
exercise, or (c) deliver sufficient cash to the Company to satisfy its federal tax withholding obligations. Optionees who elect to use the stock withholding feature must make that election at
the time and in the manner prescribed by the Committee. 

 6.3.    Termination of Directorship  

        If an Optionee ceases, other than by reason of death or retirement after attaining the age of 72 years, to be elected to serve on the Board, all options
granted to such Optionee and exercisable on the date of termination of directorship shall expire on the earlier of (i) the tenth anniversary after the date of grant (ii) three months
after the day such Optionee's term ends or (iii) as otherwise extended by the Board in its sole discretion. 

 6.4.    Exercise upon Death of Optionee  

        If an Optionee dies, the option may be exercised, to the extent of the number of shares that the Optionee could have exercised on the date of such death, if any,
by the Optionee's estate, personal representative or beneficiary who acquires the option by will or by the laws of descent and distribution. Such exercise may be made at any time prior to the earlier
of (i) the tenth anniversary after the date of grant or (ii) the third anniversary of such Optionee's death. On the earlier of such dates, the option shall terminate. The Committee may
approve all cash payments to the estate of an Optionee if circumstances warrant such a decision. 

 6.5.    Exercise upon Retirement of Optionee  

        If an Optionee retires from the Board after attaining the age of 72 years, the option may be exercised, to the extent of the number of shares that the
Optionee could have exercised on the date of such retirement, if any. Such exercise may be made at any time prior to the earlier of (i) the tenth anniversary after the date of grant or
(ii) the third anniversary of such Optionee's retirement. On the earlier of such dates, the option shall terminate. 

 6.6.    Assignability  

        No option or other right under the Plan will be assignable or transferable by any Optionee except by will or the laws of descent and distribution, and no option
shall be exercisable except by the Optionee or the Optionee's legal representative. 

                (a)    A
stock option shall not be assigned, alienated, pledged, attached, sold, transferred or encumbered by an Optionee other than by will or by the laws of
descent and distribution, or, (i) by transfer without
consideration by an Optionee, subject to such rules as the Committee may adopt to preserve the purposes of the Plan (including limiting such transfers to transfers by Optionees who are directors or
executive officers of the Company), to 

        (1)    a
member of his or her Immediate Family (as defined below), 

        (2)    a
trust solely for the benefit of the Optionee and his or her Immediate Family, or 

        (3)    a
partnership, limited-liability company or corporation whose only partners, members or stockholders are the Optionee and/or his or her Immediate Family Members; 

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(each
transferee described in (i) is hereafter referred to as a "Permitted Transferee"), provided that the Committee is notified in advance in writing of the terms and conditions of any
proposed transfer intended to be described in (i), and it determines that the proposed transfer complies with the requirements of the Plan and the applicable option agreement. Any purported
assignment, alienation, pledge, attachment, sale, transfer or encumbrance that does not qualify under (i) shall be void and unenforceable against the Company. For purposes of the Plan,
"Immediate Family" means, with respect to a particular Optionee, the Optionee's spouse, children or grandchildren (including adopted and stepchildren and grandchildren). 

                (b)    The
terms of the stock option shall apply to the beneficiaries, executors and administrators of the Optionee and of the Permitted Transferees of the
Optionee (including the beneficiaries, executors and administrators of the Permitted Transferees), except that Permitted Transferees shall not transfer any stock option other than by will or by the
laws of descent and distribution. 

                (c)    A
stock option shall be exercised only by the Optionee (or his or her attorney-in-fact or guardian) (including, in the case of a
transferred option, by a Permitted Transferee), or, in the case of the Optionee's death, by the Optionee's executor or administrator (including, in the case of a transferred option, by the executor or
administrator of the Permitted Transferee), and no shares of Common Stock shall be issued by the Company unless the exercise of a stock option is accompanied by sufficient payment, as determined by
the Company, to meet its withholding tax obligations on such exercise or by other arrangements satisfactory to the Committee to provide for such payment. 

7.     CAPITAL ADJUSTMENTS  

        If the outstanding shares of Common Stock (or shares or securities substituted therefore) are converted into or exchanged for a different number or kind of shares
of the Company or other securities of the Company or any other corporation by reason of stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares or other similar corporate change, the Committee, in its absolute discretion and on such terms and conditions as it deems appropriate, may make an appropriate and
equitable adjustment in the number, option price and kind of shares or other securities covered by all outstanding options or reserved for issuance under the Plan. If the Company is the surviving
corporation in any merger or consolidation, any option shall thereafter be exercisable for the securities to which a holder of the number of shares of Common Stock subject to the option would have
been entitled after the merger or consolidation. 

8.     CHANGE OF CONTROL  

        Notwithstanding the provisions of Section 7, in the event of a change of control, all vesting on all unexercised stock options will accelerate to the
change of control date. For purposes of the Plan, a "Change of Control" of the Company shall be deemed to have occurred at such time as (a) any "person" (as term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), with the exception of James E. Crabbe, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing 25.0% or more of the combined voting power of the Company's outstanding securities ordinarily having the right to vote
at the election of directors; or (b) individuals who constitute the Board on the date hereof (the "Incumbent Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election was approved by at least a majority of the directors comprising the Incumbent Board, or whose nomination for election
was approved by a majority of the Board serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as if he or she were a member of the Incumbent Board; or
(c) a merger, consolidation or sale of all or substantially all the assets of the Company occurs, unless such merger or consolidation shall have been affirmatively recommended to the 

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Company's
stockholders by a majority of the Incumbent Board; or (d) a proxy statement is distributed soliciting proxies from stockholders of the Company by someone other than the current
management of the Company seeking stockholder approval of a plan or reorganization, merger or consolidation of the Company with one or more corporations as a result of which the outstanding shares of
the Company's securities are actually exchanged for or converted into cash or property or securities not issued by the Company unless the reorganization, merger or consolidation shall have been
affirmatively recommended to the Company's stockholders by a majority of the Incumbent Board. 

9.     APPROVALS  

        The issuance of shares pursuant to this Plan is expressly conditioned upon obtaining all necessary approvals from the Nevada Gaming Commission, if any, and upon
obtaining stockholder approval of the Plan. 

10.   EFFECTIVE DATE OF PLAN  

        The effective date of the Plan is September 9, 2003. The Plan will become effective as of that date provided that, in accordance with Section 11,
the Plan receives the approval of the holders of a majority of the outstanding shares of Common Stock at the Company's 2004 Annual Meeting of Stockholders. 

11.   TERM; AMENDMENT OF PLAN  

        This Plan shall expire on December 31, 2009 (except to options outstanding on that date). The Board may terminate the Plan at any time. The Board may amend
the Plan at any time; provided, however, the provisions of Section 5 pertaining to the amount of options to be granted and the timing of such option grants and the provisions of
Section 6.1 pertaining to the option price of the Common Stock under option shall not be amended more than once every six months other than to comport with changes in the Code or the
regulations promulgated thereunder. Further provided, however, that without the approval of the holders of a majority of shares of outstanding Common Stock; the total number of shares that may be
sold, issued or transferred under the Plan may not be increased (except by adjustment pursuant to Section 7); the provisions of Section 3 regarding eligibility may not be modified; the
purchase price at which shares may be offered pursuant to options may not be reduced (except by adjustment pursuant to Section 7); and the expiration date of the Plan may not be extended, and
no change may be made which would cause the Plan not to comply with Rule 16b-3 under the Exchange Act, as amended from time to time. No action of the Board or stockholders, however,
may, without the consent of an Optionee, alter or impair such Optionee's rights under any option previously granted. 

12.   WITHHOLDING TAXES  

        The Company shall have the right to deduct withholding taxes from any payments made pursuant to the Plan or to make such other provisions as it deems necessary or
appropriate to satisfy its obligations to withhold federal, state or local income or other taxes incurred by reason of payments or the issuance of shares of Common Stock under the Plan. Whenever,
under the Plan, shares of Common Stock are to be delivered pursuant to the exercise of an option, the Committee shall be entitled to require as a condition of delivery that the Optionee remit an
amount sufficient to satisfy all federal, state and other government withholding tax requirements related thereto. 

13.   PLAN NOT A TRUST  

        Nothing contained in the Plan and no action taken pursuant to the Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship,
between the Company and any 

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Optionee,
the executor, administrator or other personal representative, or designated beneficiary of such Optionee, or any other persons. Any reserves that may be established by the Company in
connection with the Plan shall continue to be part of the general funds of the Company, and no individual or entity other than the Company shall have any interest in such funds until paid to an
Optionee. If, and to the extent that, any Optionee or such Optionee's executor, administrator or other personal representative, as the case may be, acquires a right to receive any payment from the
Company pursuant to the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. 

14.   NOTICES  

        Each Optionee shall be responsible for furnishing the Committee with the current and proper address for the mailing of notices and delivery of agreements, shares
of Common Stock and cash pursuant to the Plan. Any notices required or permitted to be given shall be deemed given if directed to the person to whom addressed at such address and mailed by regular
United States mail, first-class and prepaid. If any item mailed to such address is returned as undeliverable to the addressee, mailing will be suspended until the Optionee furnishes the proper
address. This provision shall not be construed as requiring the mailing of any notice or notification if such notice is not required under the terms of the Plan or any applicable law. 

15.   SEPARABILITY OF PROVISIONS  

        If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this
Plan shall be construed and enforced as if such provisions had not been included. 

16.   PAYMENT TO MINORS, ETC.  

        Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefor shall be deemed paid when paid to
such person's guardian or to the party
providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the Company and other parties with respect thereto. 

17.   HEADINGS AND CAPTIONS  

        The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the
construction of the Plan. 

18.   CONTROLLING LAW  

        This Plan shall be construed and enforced according to the laws of the State of Nevada to the extent not preempted by federal law, which shall otherwise control. 

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VENDINGDATA CORPORATION (FORMERLY CASINOVATIONS INCORPORATED)

AMENDED AND RESTATED 1999 DIRECTORS' STOCK OPTION PLAN AS APPROVED BY THE BOARD OF DIRECTORS ON JULY 15, 2003 AND SEPTEMBER 9, 2003 AND AS ORIGINALLY ADOPTED ON SEPTEMBER 13, 1999Exhibit 10.13

                        ASSUMPTION AND RELEASE AGREEMENT

     THIS ASSUMPTION AND RELEASE AGREEMENT ("Agreement") is dated as of August
22, 2003 by and among EARTH SCIENCES, INC., a Colorado corporation ("Original
Borrower"), ADA-ES, INC., a Colorado corporation ("Assuming Borrower") and
TECTONIC CONSTRUCTION CO., a Colorado corporation (the "Lender").

                                    RECITALS

     A. Lender advanced funds (the "Loans") to Original Borrower in the
aggregate principal amount of US $1,250,000.00 currently evidenced by a
convertible debenture in the amount of $1,000,000.00 and a promissory note in
the amount of $250,000.00.

     B. Original Borrower has now elected to separate its operations into two
separate businesses through a spin-off of Assuming Borrower to the existing
shareholders of Original Borrower (the "Spin-Off"). Pursuant to the plans for
the Spin-Off, Original Borrower and Assuming Borrower have requested that
Assuming Borrower be allowed to fully assume all the obligations of Original
Borrower with respect to the Loans and other agreements and instruments relating
thereto.

     C. The parties are willing to agree to the substitution of Assuming
Borrower for the Original Borrower, subject to the terms and conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the following mutual agreements and
other valuable consideration, the receipt and sufficiency of which are
acknowledged and intending to be legally bound, the Parties agree as follows:

     1. Incorporation of Recitals and Exhibits. The Recitals are incorporated as
part of this Agreement, and the Parties agree that the above Recitals are
accurate.

     2. Acknowledgment of the Spin-Off. Original Borrower, Assuming Borrower and
Lender each acknowledges that concurrently herewith, Original Borrower will
separate its environmental technology and specialty chemical business from its
mineral property development business by distributing one (1) share of the
common stock ("Common Stock") of Assuming Borrower, a wholly-owned subsidiary of
Original Borrower, for every ten (10) shares of the common stock of Original
Borrower, thereby creating two independent public companies.

     3. Conversion of Common Stock Following Spin-Off. Following the Spin-Off,
Lender, and pursuant to the terms of the Note and the Debenture (as such terms
are defined below) Lender shall be entitled, at any time up to and including the
respective maturity dates of the Debenture and the Note, to convert up to the
entire outstanding principal amounts on the Debenture and the Note into shares
of Common Stock of the Assuming Borrower at a conversion price for each share of
the Common Stock of the lesser of $2.10 or the average trading price per share
of Common Stock on the conversion date. Nevertheless, the aggregate combined
number of shares of Common Stock into which this Promissory Note and the
Debenture may be converted shall not exceed 100,000. Such conversion shall be
effectuated in accordance with the terms and conditions of the Debenture and the
Note.

<PAGE>

     4. Transaction Documents. In connection with the making of the Loans by
Lender, Original Borrower, and in some cases, Lender have executed or caused to
be filed the following documents (collectively, the "Loan Documents"):

        (a) Earth Sciences, Inc. Amended and Restated 10% Convertible Debenture
No. 1 dated September 8, 2000 in the face amount of US $1,000,000.00 (the
"Debenture") executed by Original Borrower in favor of Lender, as holder.

        (b) Earth Sciences, Inc. 10% Convertible Debenture No. 1 dated June 12,
1997 in the face amount of US $1,000,000.00 executed by Original Borrower in
favor of Lender, as holder.

        (c) Amended and Restated Promissory Note dated September 8, 2000 in the
face amount of $250,000.00 (the "Note") executed by original Borrower and
payable to Lender.

        (d) Promissory Note dated May 20, 1998 in the face amount of $250,000.00
executed by original Borrower and payable to Lender.

        (e) Security Agreement dated June 12, 1997 executed by Original
Borrower, as Debtor and Lender, as Secured Party.

        (f) Deed of Trust, Security Agreement, Financing Statement and
Assignment of Rents and Revenues dated June 12, 1997 executed by Original
Borrower for the benefit of Lender and recorded with the Clerk and Recorder of
Costilla County, Colorado on June 19, 1007 at book 349, Page 590, Reception
Number 209825.

        (g) Uniform Commercial Code Financing Statement (Form UCC-1), in which
Original Borrower was the debtor and Lender was the secured party, that was
filed on June 13, 1997 in the office of the Secretary of State of Colorado as
File No. 19972049113.

        (h) Uniform Commercial Code Financing Statement (Form UCC-1), in which
Original Borrower was the debtor and Lender was the secured party, that was
filed on July 19, 2001 in the office of the Secretary of State of Colorado as
File No. 20012057100.

        (i) Security Agreement Registration registered on May 29, 1997 in the
Personal Property Registry in Edmonton, Alberta at Registration Number
97052908486, in which Original Borrower was the debtor and Lender was the
secured party. This Registration was renewed on May 24, 2000 at Registration
Number 00052405271, and again March 13, 2003 at Registration Number 03031303450.

        (j) Notice of Security Interest (Fixture or Crops) registered on June
20, 1997 with the Registrar of South Alberta Land Registration District at
Reception Number 971 177 594, in which Original Borrower was the debtor and
Lender was the secured party.

<PAGE>

     5. Third Party Documents. In connection with the issuance of the Debenture
and the making of the Loans by Lender, third parties and, in some cases, Lender
have executed or caused to be filed following documents (collectively, the
"Third Party Documents"):

        (a) Security Agreement dated June 12, 1997 executed by Earth Sciences
Extraction Company, a limited partnership under the laws of Alberta, Canada
("Earth Sciences Extraction"), as Debtor, and Lender, as Secured Party.

        (b) Security Agreement dated June 12, 1997 executed by ESI Resources
Limited, a corporation incorporated under the laws of Alberta ("ESI Resources"),
Canada, as Debtor and Lender, as Secured Party.

        (c) Security Agreement dated September 8, 2000 executed by ADA
Environmental Solutions, LLC, a Colorado limited liability company ("ADA
Environmental"), as Pledgor, and Lender, as Secured Party.

        (d) Guaranty Agreement dated June 12, 1997 executed by Earth Sciences
Extraction in favor of Lender.

        (e) Guaranty Agreement dated June 12, 1997 executed by ESI Resources in
favor of Lender.

        (f) Guaranty Agreement dated September 8, 2000 executed by ADA
Environmental in favor of Lender.

        (g) Uniform Commercial Code Financing Statement (Form UCC-1), in which
Earth Sciences Extraction was the debtor and Lender was the secured party, that
was filed on June 16, 1997, in the office of the Secretary of State of Colorado
as File No. 19972049176.

        (h) Uniform Commercial Code Financing Statement (Form UCC-1), in which
Earth Sciences Extraction was the debtor and Lender was the secured party, that
was filed on July 19, 2001, in the office of the Secretary of State of Colorado
as File No. 20012057102.

        (i) Uniform Commercial Code Financing Statement (Form UCC-1), in which
ESI Resources was the debtor and Lender was the secured party, which was filed
on June 16, 1997 in the office of the Secretary of State of Colorado as File No.
19972049177.

        (j) Uniform Commercial Code Financing Statement (Form UCC-1), in which
ESI Resources was the debtor and Lender was the secured party, that was filed on
July 19, 2001, in the office of the Secretary of State of Colorado as File No.
20012057101.

        (k) Uniform Commercial Code Financing Statement (Form UCC-1), in which
ADA Environmental was the debtor and Lender was the secured party, that was
filed on July 19, 2001, in the office of the Secretary of State of Colorado as
File No. 20012057099.

        (l) Security Agreement Registration registered on May 29, 1997 in the
Personal Property Registry in Edmonton, Alberta at Registration Number
97052908817, in which ESI Resources was the debtor and Lender was the secured

<PAGE>

party. This Registration was amended on May 29, 1997 at Reception Number
97052909161, renewed on May 24, 2000 at Registration Number 00052405651, and
renewed again on March 13, 2003 at Registration Number 03031303385.

        (m) Security Agreement Registration registered on May 29, 1997 in the
Personal Property Registry in Edmonton, Alberta at Registration Number
97052908932, in which Earth Sciences Extraction was the debtor and Lender was
the secured party. This Registration was renewed on May 24, 2000 at Registration
Number 00052404670, and renewed again on March 13, 2003 at Registration Number
03031303278.

        (n) Security Agreement Registration registered on December 15, 1997 in
the Personal Property Registry in Edmonton, Alberta at Registration Number
97121514505, in which Earth Sciences Extraction was the debtor and Lender was
the secured party. This Registration was renewed June 5, 1998 at Registration
Number 98060506403, and renewed again on April 28, 1999 at Reception Number
99042809766, amended on July 27, 1999 at Registration Number 99072702980, and
renewed again on May 24, 2000 at Registration Number 00052404597.

        (o) Security Agreement Registration registered on April 28, 1999 in the
Personal Property Registry in Edmonton, Alberta at Registration Number
99042809642, in which Earth Sciences Extraction was the debtor and Lender was
the secured party. This Registration was amended on July 27, 1999 at
Registration Number 99072703079, renewed on May 24, 2000 at Registration Number
0052404704, and renewed again on March 13, 2003 at Registration Number
03031303567.

        (p) Notice of Security Interest (Fixture or Crops) registered on June
20, 1997 with the Registrar of South Alberta Land Registration District at
Reception Number 971 177 595, in which Earth Sciences Extraction was the debtor
and Lender was the secured party.

        (q) Notice of Security Interest (Fixture or Crops) registered on June
20, 1997 with the Registrar of South Alberta Land Registration District at
Reception Number 971 177 596, in which ESI Resources was the debtor and Lender
was the secured party.

     6. Outstanding Balance of Loans. The Parties agree that, as of August 1,
2003, the outstanding principal balance of the Debenture is $1,000,000.00, and
the outstanding amount of accrued interest is $8,493.07. The Parties agree that,
as of June 30, 2003 (as hereinafter defined) a, the outstanding principal
balance of the Note is $150,000.00, and the outstanding amount of accrued
interest is $1,274.1.

     7. Assuming Borrower's Covenant to Perform. Assuming Borrower hereby
unconditionally assumes, covenants, and agrees to timely pay and perform all
indebtedness and obligations of Original Borrower under those Loan Documents and
Third Party Documents that were executed by Original Borrower (collectively, the
"Transaction Documents"), and to comply with all of the terms, covenants, and
conditions of the Transaction Documents as if Assuming Borrower originally had
executed the Transaction Documents (including, without limitation, the Debenture
and the Note). Assuming Borrower is familiar with all terms, conditions, and
provisions of the Transaction Documents, and fully comprehends the same, as
modified by this Agreement.

<PAGE>

     8. Release. Lender hereby releases Original Borrower from all indebtedness
and obligations to Lender under the Transaction Documents. It is expressly
understood and agreed that Assuming Borrower's assumption of the obligations of
Original Borrower under the Transaction Documents as set forth herein and in
this Amendment Documents shall in no manner alter or affect (except as herein
expressly provided), extinguish or impair the indebtedness evidenced by the
Debenture or the Note, and shall not extinguish or impair any rights and
remedies of Lender thereunder or the priority of the Transaction Documents.
Original Borrower and Assuming Borrower each hereby acknowledges and confirms
that the liens created by the Transaction Documents are valid, subsisting and
enforceable liens on the property described in such Transaction Documents.

     9. Acknowledgments, Representations, and Agreements. Original Borrower and
Assuming Borrower (collectively, the "Borrowers"), to the best of their
knowledge, each acknowledges, represents, warrants, and agrees, as of the date
hereof, as follows:

        (a) There exists no defense, offset or counterclaim with respect to the
payment of the Loans or with respect to the performance of Borrowers'
indebtedness and obligations under the Loans, this Agreement, or any of the
Transaction Documents, without limitations, any claim for breach of contract,
failure to act in good faith, lack of fair dealing, misrepresentation, breach of
fiduciary duty, fraud, or negligence. The Borrowers have no claim, defense,
abatement, offset, or counterclaim against Lender or otherwise applicable to the
Loans. If any such claims, defenses, abatements, offsets, or counterclaims, do
presently exist, as additional consideration for this Agreement, the Borrowers
hereby waive and release them to the fullest extent permitted by applicable law;

        (b) Lender has not breached any duty to Borrowers in connection with the
Loans. Lender has timely and fully performed all obligations which Lender may
have had or now has to Borrowers in connection with the Loans;

        (c) Lender has no obligation whatsoever to make any other loans or
advances to or for the benefit of Borrowers or to grant any modifications or
extensions in connection with the Loans, except as may be set forth specifically
in the Transaction Documents and this Agreement;

        (d) Borrowers acknowledge that Lender has a properly perfected, choate,
absolute and present first priority security interest relating to the collateral
("Collateral") identified in Transaction Documents and the Third Party
Documents;

        (e) Assuming Borrower is a Colorado corporation and Original Borrower is
a Colorado corporation as of the Effective Date. Borrowers have all requisite
power and authority to enter into this Agreement and to perform all actions
required or contemplated by any provision contained in this Agreement or the
Transaction Documents. This Agreement and the Transaction Documents are and
shall be legal, valid, and binding obligations of Borrowers;

<PAGE>

         (f) There is no legal or other action, proceeding or investigation
pending or threatened against the Borrowers or the Collateral before any court,
administrative agency or arbitrator that might in any way adversely affect the
Borrowers ability to fulfill their respective obligations under this Agreement,
the Third Party Documents or any of the Transaction Documents;

         (g) None of the Borrowers are involved as a debtor in any state or
federal bankruptcy, reorganization, arrangement, insolvency proceedings,
receivership, or any other debtor-creditor proceeding, and none of the Borrowers
have made any assignment for the benefit of creditors;

         (h) All information and documentation supplied by Borrowers to or for
the benefit of Lender in connection with this Agreement are true and correct in
all material respects;

         (i) This Agreement is not intended for, and shall not be construed to
be for, the benefit of any person or entity not a signatory hereto.

     10. Conditions to the Legal Effect of this Agreement. This Agreement shall
become operative and legally binding on the Parties hereto as of the Effective
Date, when, and only when, Lender shall have received each of the following in
form and substance satisfactory to Lender and its counsel:

         (a) A complete counterpart of this Agreement executed and acknowledged
by all of the Parties, and properly recorded in the Official Records;

         (b) Evidence satisfactory to Lender that Original Borrower is a
Colorado corporation in good standing, and authorized to transact business in
the State of Colorado; that Original Borrower has authorized the execution of
this Agreement, and that the persons executing this Agreement on behalf of the
Original Borrower have full power and authority to bind the Original Borrower to
the same;

         (c) Evidence satisfactory to Lender that Assuming Borrower is a
Colorado corporation in good standing, and authorized to transact business in
the State of Colorado; that Assuming Borrower has authorized the execution of
this Agreement, and that the persons executing this Agreement on behalf of the
Assuming Borrower have full power and authority to bind the Assuming Borrower to
the same;

         (d) Acknowledgments, in form and substance acceptable to Lender by
Earth Sciences Extraction Company, ESI Resources, LTD, and ADA Environmental
Solutions, LLC.

         (e) Such other documents as Lender may reasonably have requested at any
time at or prior to the closing on this Agreement; and

         (f) Payment by Original Borrower and Assuming Borrower of all costs,
premiums, fees, and expenses (including, without limitation, reasonable
attorneys' fees) incurred by Lender in the negotiation and preparation of this
Agreement.

<PAGE>

     11. Closing. Closing under this Agreement shall occur contemporaneously
with the distribution of the Common Stock of Assuming Borrower to the
shareholders of Original Borrower. If all the conditions set forth in paragraph
10 are not satisfied within a reasonable time thereafter, then this Agreement
automatically shall terminate, and none of the Parties shall have any further
liability or obligation to one another under this Agreement, and the respective
rights, duties, and obligations of the Parties shall continue unmodified as if
this Agreement had never been negotiated or executed, except for the continuing
obligation of the Original Borrower and/or Assuming Borrower to pay all costs,
fees, and expenses (including attorneys' fees) incurred by Lender in connection
with the negotiation and preparation of this Agreement and the other documents
described therein.

     12. Affirmation. Borrowers hereby affirm that, as of the Effective Date,
the representations and warranties of Original Borrowers set forth in the
Transaction Documents (to the extent not inconsistent with the representations
made herein) are and remain true and correct as though made on and as of the
Effective Date, and are hereby affirmed, ratified, and confirmed by Borrowers.
Borrowers will immediately notify Lender of any change or discovered inaccuracy
in the representations and warranties contained in this Agreement or in the
Transaction Documents provided that Borrowers' duty to notify Lender of any such
inaccuracy shall only apply to presently existing inaccuracies which existed
before the Effective Date or any future inaccuracies. Borrowers hereby confirm
that the Transaction Documents are and shall remain enforceable against Assuming
Borrower in accordance with their terms, shall continue to be in full force and
effect, and are hereby confirmed and ratified in all respects. Borrowers agree
that this Agreement shall not impair the Transaction Documents or any lien
securing the Note, that such liens are not waived, released, or extinguished in
any manner, and that such liens are hereby acknowledged to be valid and existing
and shall continue to secure payment of the Note and all other obligations under
the Transaction Documents.

     13. Security. Assuming Borrower's performance under the Transaction
Documents shall continue to be secured by the Transaction Documents. After the
Effective Date, all references to the Transaction Documents shall include this
Agreement.

     14. Notices, Consents, and Approvals. Any notice, consent, or approval that
Lender or Borrowers may desire or be required to give to the other shall be in
writing and shall be mailed or delivered to the intended recipient thereof at
its address set forth below or at such other address as such intended recipient
may, from time to time, by notice in writing, designate to the sender pursuant
hereto. Any notice, consent, or approval required or permitted to be given shall
be in writing and will be deemed given (a) upon personal delivery or upon
confirmed transmission by telecopier or similar facsimile transmission device,
(b) on the first business day after receipted delivery to a courier service
which guarantees next-business-day delivery, or (c) on the third business day
after mailing, by registered or certified United States mail, postage prepaid,
in any case to the appropriate party at its address set forth below.

<PAGE>

         If to Lender:

                         Tectonic Construction Co.
                         100 Cherry Street
                         Denver, CO 80220
                         Attention:      Robert H. Lowdermilk
                         Telecopier:      303-394-9822

                  With copy to:

                         Gorsuch Kirgis LLP
                         Tower I, Suite 1000
                         1515 Arapahoe Street
                         Denver, Colorado 80202
                         Attention:  Stephen A. Weinstein, Esq.
                         Telecopier:  303-376-5001

         If to Original Borrower:

                         Earth Sciences, Inc.
                         8100 SouthPark Way, Suite B
                         Littleton, Colorado  80120
                         Attention:  Mark H. McKinnies
                         Telecopier:  303-734-0330

         If to Assuming Borrower:

                         ADA-ES, Inc.
                         8100 SouthPark Way, Suite B
                         Littleton, Colorado  80120
                         Attention:  Mark H. McKinnies
                         Telecopier:  303-734-0330

     15. Construction. Captions and headings are for convenience and reference
only and do not define, limit, or affect the contents of this Agreement.
Reference to "paragraphs" or "sections" refer to this Agreement unless stated
otherwise. All grammatical usage shall be deemed to refer to the masculine,
feminine, neuter, singular, or plural as the context and identity of any persons
may require. Capitalized terms not otherwise defined in this Agreement shall
have the meanings set forth in the Transaction Documents.

     16. Severability and Interpretation. The invalidity or unenforceability of
any provision of this Agreement does not affect the remaining provisions. This
Agreement shall be construed as if it excluded any invalid or unenforceable
provision, which shall be severed from this Agreement. Whenever possible, this
Agreement shall be interpreted so as to be valid under applicable law, and shall
not be construed strictly in favor of or against any particular Party, including
any Party who drafted or prepared this Agreement, but instead according to its
plain meaning to give effect to its intended purposes.

     17. Governing Law. This Agreement is governed by the laws of the State of
Colorado, including its choice of law principles. The Parties consent and submit
to the non-exclusive jurisdiction of the courts of the State of Colorado and the
United States District Court for the District of Colorado, to be venued in
Denver, Colorado, concerning any action or proceeding involving the Lender and
arising under this Agreement, the Transaction Documents, or the Loan.

<PAGE>

     18. Counterparts. This Agreement may be executed in identical counterparts,
each of which upon execution shall be deemed an original, but all of which
together shall constitute one document. Partially executed signature or
acknowledgment pages of any one counterpart may be combined with or attached to
any other partially executed counterpart of this Agreement.

     19. Entirety; Modification. This Agreement constitutes the entire agreement
of the Parties with respect to the assumption contemplated hereby of the Loans.
There are no verbal agreements between the Parties. This Agreement and the
Transaction Documents as amended by this Agreement may be amended or modified
only by a written document signed by all the Parties.

     20. Time. TIME IS OF THE ESSENCE FOR THE PERFORMANCE OF EACH PROVISION OF
THIS AGREEMENT. If this Agreement requires any action to be performed on a date
that is not a "business" day (a Saturday, Sunday, or federal or state legal
holiday), such action shall be validly performed on the next succeeding business
day.

     21. Negotiated Agreement. This Agreement is the result of arms-length
negotiations between the Parties, each of whom has been represented by counsel,
and no Party has acted under duress or compulsion, whether legal, economic, or
otherwise.

     22. Binding Effect. This Agreement is binding upon and inures to the
benefit of the Parties and their respective permitted successors and assign.

     23. Effective Date. This Agreement is effective as of the date of the
distribution of the Common Stock of Assuming Borrower to the shareholders of
Original Borrower (the "Effective Date"); provided, however, unless otherwise
agreed to by the parties hereto in writing, if the date of distribution of the
Common Stock of Assuming Borrower to the shareholders of Original Borrower does
not take place on or before January 1, 2004, this agreement shall be null and
void and of no further force or effect.

     24. Further Assurances. On the date hereof, or thereafter, if necessary,
Assuming Borrower agrees to execute and deliver to or cause to be executed and
delivered to Lender such further instruments as the Lender may reasonably
request and take such other action as the Lender may reasonably require to carry
out more effectively the transactions contemplated by this Agreement.

                                            ORIGINAL BORROWER:

                                            EARTH SCIENCES, INC.,
                                            a Colorado corporation

                                            By:  /s/  Mark H McKinnies
                                               -------------------------------
                                            Name:     Mark H McKinnies
                                            Title:    President

                                            ASSUMING BORROWER:

                                            ADA-ES, INC., a Colorado corporation

                                            By:  /s/  Michael D Durham
                                               -------------------------------
                                            Name:     Michael D Durham
                                            Title:    President

                                            LENDER:

                                            TECTONIC CONSTRUCTION CO.,
                                            a Colorado corporation

                                            By:  /s/  Robert H Lowdermilk
                                               -------------------------------
                                            Name:     Robert H Lowdermilk
                                            Title:    President

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