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                                                                                                                      Exhibit 10.32
DOE F 4600 1                                             U.S. DEPARTMENT OF ENERGY
(11/04)                                            NOTICE OF FINANCIAL ASSISTANCE AWARD
Under the authority of Public Law  104-271, Hydrogen Future Act
                                   -------------------------------------------------------------------------------------------------

---------------------------------------------------------------------- -------------------------------------------------------------

  1. PROJECT TITLE                                                       2. INSTRUMENT TYPE Startech Hydrogen Production Project
     Startech Hydrogen Production Project                                   [ ] GRANT             [x]    COOPERATIVE AGREEMENT
---------------------------------------------------------------------- ---------------------------------- --------------------------

  3. RECIPIENT (Name, address, zip code)                                 4. INSTRUMENT NO.                  5. AMENDMENT NO.
     Startech Environmental Corp.                                           DE-FC36-04GO14233                              A001
     15 Old Danbury Road
     Suite 203                                                           6. BUDGET PERIOD                   7. PROJECT PERIOD
     Wilton, CT 06897                                                       FROM:07/01/2005                    FROM:10/01/2004
                                                                            THRU:06/30/2006                    THRU:09/30/2005
---------------------------------------------------------------------- ---------------------------------- --------------------------

  8. RECIPIENT PROJECT DIRECTOR (Name, phone and E-mail)                10. TYPE OF AWARD David
     Lynch Phone: 203-762-2499
     E-mail:  dlynch@startech.net                                           [ ]  NEW            [ ]CONTINUATION         [x]RENEWAL

                                                                            [ ]  REVISION       [ ]INCREMENTAL FUNDING
---------------------------------------------------------------------- -------------------------------------------------------------

  9. RECIPIENT BUSINESS OFFICER (Name, phone and E-mail) Ralph Dechiaro Phone:
     203-762-2499 E-mail: rdechiar@startech.net
---------------------------------------------------------------------- -------------------------------------------------------------

11.  DOE PROJECT OFFICER (Name, address, phone and E-mail)              12.DOE AWARD ADMINISTRATOR (Name, address, phone and E-mail)
     Jill Gruber               Phone:  303-275-4961                        Stephanie N. Carabajal        Phone:303-275-4911
     Golden Field Office                                                   Golden Field Office
     1617 Cole Blvd.                                                       1617 Cole Blvd.
     Golden, CO 80401-3305                                                 Golden, CO 80401-3305
     E-mail:  jill.gruber@go.doe.gov                                       E-mail:  Stephanie.carabajal@go.doe.gov
---------------------------------------------------------------------- -------------------------------------------------------------
13. RECIPIENT TYPE
     [ ]  STATE GOV'T        [ ]   INDIAN TRIBAL GOV'T       [ ]    HOSPITAL                [x]   FOR PROFIT        [ ]   INDIVIDUAL
                                                                                                  ORGANIZATION
     [ ]  LOCAL GOV'T        [ ]   INSTITUTION OF            [ ]    OTHER NONPROFIT         [x]   C   [ ] P   [ ]SP [ ]   OTHER
                                   HIGHER EDUCATION                 ORGANIZATION                                          (Specify)

                                                                                                                     ---------------
---------------------------------------------------------------------------------------------- -------------------------------------

14. ACCOUNTING AND APPROPRIATIONS DATA:                                             15. EMPLOYER I.D.
------------------------------------------------------------------------------------------------------------------------------------
a. Appropriation Symbol b. B&R Number c. FT/AFP/OC d. CFA Number                     a. TIN: 841286576
   89X0224.91              EB4206170     YA/FT5491/410/8635                          b. DUNS: 795142389

------------------------------------------------------------------------------------------------------------------------------------

16. BUDGET AND FUNDING INFORMATION
---------------------------------------------------------------------- -------------------------------------------------------------

a. CURRENT BUDGET PERIOD INFORMATION                                                 b. CUMULATIVE DOE OBLIGATIONS
---------------------------------------------------------------------- -------------------------------------------------------------

(1)  DOE Funds Obligated This Action                $   496,000.00     (1)              This Budget Period             $ 496,000.00
                                                     -------------                                                      -----------
(2)  DOE Funds Authorized for Carry Over            $         0.00         [Total of lines a.(1) and a.(3)]
                                                     -------------
(3)  DOE Funds Previously Obligated in this Budget Period$    0.00
                                                          --------
(4)  DOE Share of Total Approved Budget             $   496,000.00     (2) Prior Budget Periods                        $ 490,539.00
                                                     -------------                                                      -----------
(5)  Recipient Share of Total Approved Budget       $   124,000.00
                                                     -------------
(6)  Total Approved Budget                          $   620,000.00     (3) Project Period to Date                      $ 986,539.00
                                                     -------------                                                      -----------
                                                                           [Total of lines b.(1) and b.(2)]
------------------------------------------------------------------------------------------------------------------------------------

17. TOTAL ESTIMATED COST OF PROJECT, INCLUDING DOE FUNDS TO FFRDC: $1,233,174.00
    (This is the current estimated cost of the project. It is not a promise to
    award nor an authorization to expend funds in this amount.)
------------------------------------------------------------------------------------------------------------------------------------

18. AWARD AGREEMENT TERMS AND CONDITIONS
    This award/agreement consists of this form plus the following:
    a. Special terms and conditions.
    b. Applicable program regulations (Specify)_________________________    (Date) _________________________.
    c. DOE Assistance Regulations, 10 CFR Part 600 at http://ecfr.gpoaccess.gov  and if the award is to a Federal Demonstration
       Partnership (FDP) institution, the FDP Terms & Conditions and the DOE FDP Agency Specific Requirements at http://www/nsf.gov.
    d. Application/proposal as approved by DOE.
    e. National Policy Assurances to Be Incorporated as Award Terms at http://grants.pr.doe.gov.
------------------------------------------------------------------------------------------------------------------------------------

19. REMARKS
    Attachment 1, Special Terms and Conditions; Attachment 2, Intellectual Property Provisions; Attachment 3, Budget: and Attachment
    4, Reporting Requirements, are made part of this award and supercede previous provisions.  Attachment 5, Statement of
    Objectives, is made part of this award and continues award activities begun under the basic award. The DOE Project Officer is
    revised as reflected in Block 11 above. All other terms and conditions remain unchanged.

------------------------------------------------------------------------------------------------------------------------------------

20. EVIDENCE OF RECIPIENT ACCEPTANCE                                      21. AWARDED BY

    /s/                                                                    /s/                                             7/12/05
    --------------------------------------------------------------         ---------------------------------------------------------
    (Signature of Authorized Recipient Official)      (Date)               (Signature)                                     (Date)

    Joseph F. Longo                                                        James P. Damm
    --------------------------------------------------------------         ---------------------------------------------------------
                              (Name)                                                                 (Name)
    CEO & President                                                        Contracting Officer
    --------------------------------------------------------------         ---------------------------------------------------------
                              (Title)                                                                (Title)
------------------------------------------------------------------------------------------------------------------------------------

<PAGE>

                                                                                            DE-FC36-04GO14233, A001
2/7/2005
 .

                                                                                                       Attachment 1
                          SPECIAL TERMS AND CONDITIONS
                          ----------------------------

                                Table of Contents
                                -----------------

Number            Subject                                                                                      Page
------            -------                                                                                      ----

1. RESOLUTION OF CONFLICTING CONDITIONS (OCT
2004)..........................................................2 2. PAYMENT
PROCEDURES - REIMBURSEMENT THROUGH THE AUTOMATED STANDARD APPLICATION FOR
PAYMENTS (ASAP)
         SYSTEM (OCT 2004)........................................................................................2
3.       COST SHARING (OCT 2004)..................................................................................2
4.       USE OF PROGRAM INCOME (OCT 2004).........................................................................3
5.       STATEMENT OF FEDERAL STEWARDSHIP (OCT 2004)..............................................................3
6.       STATEMENT OF SUBSTANTIAL INVOLVEMENT.....................................................................3
7.       SITE VISITS (OCT 2004)...................................................................................4
8.       REPORTING REQUIREMENTS (OCT 2004)........................................................................4
9.       PUBLICATIONS (OCT 2004)..................................................................................4
10.      FEDERAL, STATE, AND MUNICIPAL REQUIREMENTS (OCT 2004)....................................................5
11.      INTELLECTUAL PROPERTY PROVISIONS (OCT 2004)..............................................................5
12.      NATIONAL SECURITY: CLASSIFIABLE RESULTS ORIGINATING UNDER AN AWARD (OCT 2004)............................5
13.      CONTINUATION APPLICATION AND FUNDING (OCT 2004)..........................................................6
14.      LOBBYING RESTRICTIONS (OCT 2004).........................................................................7
15.      NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS -- SENSE OF CONGRESS (OCT
         2004)....................................................................................................7
16.      ANNUAL INDIRECT COST PROPOSAL AND RECONCILIATION
         (OCT 2004)...............................................................................................7
17.      INSOLVENCY, BANKRUPTCY OR RECEIVERSHIP...................................................................7

2/7/2005

<PAGE>

                                                         DE-FC36-04GO14233, A001

                          Special Terms and Conditions

1.       RESOLUTION OF CONFLICTING CONDITIONS (OCT 2004)

Any apparent inconsistency between Federal statutes and regulations and the
terms and conditions contained in this award must be referred to the DOE Award
Administrator identified in Block 12 of the Notice of Financial Assistance Award
for guidance.

2.       PAYMENT PROCEDURES - REIMBURSEMENT THROUGH THE
         AUTOMATED STANDARD APPLICATION FOR PAYMENTS (ASAP) SYSTEM (OCT 2004)

a.       Method of Payment. Payment will be made by reimbursement through the
         Department of Treasury's ASAP system.

b.       Requesting Reimbursement. Requests for reimbursements must be made
         through the ASAP system. Your requests for reimbursement should
         coincide with your normal billing pattern, but not more frequently than
         every two weeks. Each request must be limited to the amount of
         disbursements made for the federal share of direct project costs and
         the proportionate share of allowable indirect costs incurred during
         that billing period.

c.       Adjusting payment requests for available cash. You must disburse any
         funds that are available from repayments to and interest earned on a
         revolving fund, program income, rebates, refunds, contract settlements,
         audit recoveries, credits, discounts, and interest earned on any of
         those funds before requesting additional cash payments from DOE/NNSA.

d.       Payments. All payments are made by electronic funds transfer to the
         bank account identified on the ASAP Bank Information Form that you
         filed with the U.S. Department of Treasury.

3.       COST SHARING (OCT 2004)

a.       Notwithstanding the Recipient's cost share described below in paragraph
         b, you must cost share a minimum of 20 percent of the total allowable
         Project Costs (Total allowable Project Costs are the sum of the
         Government share and the Recipient share of allowable project costs).
         Your cost share must come from non-Federal sources. By accepting
         federal funds under this award, you agree that you are liable for your
         percentage share of the total allowable Project Costs incurred even if
         the project is terminated early or is not funded to its completion.

2/7/2005
                                       2
<PAGE>

b.       Total Estimated Project Cost is the sum of the Government share and
         Recipient share of the estimated project costs. This cost is shared as
         follows:

        -----------------------------------------------------------------------------------------------------
         Budget Period    Budget Period          Government             Recipient                Total
              No.           Start Date             Share                  Share                Estimated
                                                   $ / %                  $ / %                   Cost
        -----------------------------------------------------------------------------------------------------
            1               10/01/2004          $490,539 / 80%        $122,635 / 20%            $613,174
        -----------------------------------------------------------------------------------------------------
            2               07/01/2005          $496,000 / 80%        $124,000 / 20%            $620,000
        -----------------------------------------------------------------------------------------------------
        Cumulative Total                        $986,539              $246,635                $1,233,174
        -----------------------------------------------------------------------------------------------------

c.       If you discover that you may be unable to provide cost sharing of at
         least the amount identified in paragraph b of this article, you should
         immediately provide written notification to the DOE Award Administrator
         identified in Block 12 of the Notice of Financial Assistance Award
         indicating whether you will continue or phase out the project. If you
         plan to continue the project, the notification must describe how
         replacement cost sharing will be secured.

d.       You must maintain records of all project costs that you claim as cost
         sharing, including in-kind costs, as well as records of costs to be
         paid by DOE/NNSA. Such records are subject to audit.

e.       Failure to provide the cost sharing required in paragraphs a and b may
         result in the subsequent recovery by DOE/NNSA of some or all the funds
         provided under the award.

4.       USE OF PROGRAM INCOME (OCT 2004)

If you earn program income during the project period as a result of this award,
you may use the program income to meet your cost sharing requirement.

5.       STATEMENT OF FEDERAL STEWARDSHIP (OCT 2004)

DOE/NNSA will exercise normal Federal stewardship in overseeing the project
activities performed under this award. Stewardship activities include, but are
not limited to, conducting site visits; reviewing performance and financial
reports; providing technical assistance and/or temporary intervention in unusual
circumstances to correct deficiencies which develop during the project; assuring
compliance with terms and conditions; and reviewing technical performance after
project completion to insure that the award objectives have been accomplished.

6.       STATEMENT OF SUBSTANTIAL INVOLVEMENT

The Project Officer and/or HQ Program Technology Manager will routinely and
periodically review the progress of the Recipient and redirect the Recipient as
necessary to keep on track with the cognizant programmatic elements of the HFCIT
Multi-Year Program Plan.

                                       3
<PAGE>

7.       SITE VISITS (OCT 2004)

DOE/NNSA's authorized representatives have the right to make site visits at
reasonable times to review project accomplishments and management control
systems and to provide technical assistance, if required. You must provide and
must require your subawardees to provide reasonable facilities and assistance
for the safety and convenience of the government representatives in the
performance of their duties. All site visits and evaluations must be performed
in a manner that does not unduly interfere with or delay the work.

8.       REPORTING REQUIREMENTS (OCT 2004)

a.       Requirements. The reporting requirements for this award are identified
         on the Federal Assistance Reporting Checklist, DOE F 4600.2, attached
         to this award. Failure to comply with these reporting requirements is
         considered a material noncompliance with the terms of the award.
         Noncompliance may result in withholding of future payments, suspension
         or termination of the current award, and withholding of future awards.
         A willful failure to perform, a history of failure to perform, or
         unsatisfactory performance of this and/or other financial assistance
         awards, may also result in a debarment action to preclude future awards
         by Federal agencies.

b.       Dissemination of scientific/technical reports. Scientific/technical
         reports submitted under this award will be disseminated on the Internet
         via the DOE Information Bridge (www.osti.gov/bridqe), unless the report
         contains patentable material, protected data or SBIR/STTR data. In
         addition, these reports must not contain any limited rights data
         (proprietary data), classified information, information subject to
         export control classification, or other information not subject to
         release. Citations for journal articles produced under the award will
         appear on the DOE Energy Citations Database (www.osti.gov/ecd).

9.       PUBLICATIONS (OCT 2004)

a.       You are encouraged to publish or otherwise make publicly available the
         results of the work conducted under the award.

b.       An acknowledgment of Federal support and a disclaimer must appear in
         the publication of any material, whether copyrighted or not, based on
         or developed under this project, as follows:

                  Acknowledgment: "This material is based upon work supported by
                  the Department of Energy [National Nuclear Security
                  Administration] [add name(s) of other agencies, if applicable]
                  under Award Number(s) [enter the award number(s)]."

                  Disclaimer: "This report was prepared as an account of work
                  sponsored by an agency of the United States Government.
                  Neither the United States Government nor any agency thereof,
                  nor any of their employees, makes any warranty, express or
                  implied, or assumes any legal liability or responsibility for
                  the accuracy, completeness, or usefulness of any information,
                  apparatus, product, or process disclosed, or represents that

                                       4

<PAGE>

                  its use would not infringe privately owned rights. Reference
                  herein to any specific commercial product, process, or service
                  by trade name, trademark, manufacturer, or otherwise does not
                  necessarily constitute or imply its endorsement,
                  recommendation, or favoring by the United States Government or
                  any agency thereof. The views and opinions of authors
                  expressed herein do not necessarily state or reflect those of
                  the United States Government or any agency thereof."

10.      FEDERAL, STATE, AND MUNICIPAL REQUIREMENTS (OCT 2004)

You must obtain any required permits and comply with applicable federal, state,
and municipal laws, codes, and regulations for work performed under this award,

11.      INTELLECTUAL PROPERTY PROVISIONS (OCT 2004)

The intellectual property provisions applicable to this award are provided as an
attachment to this award or are referenced in Block 19 of the Notice of
Financial Assistance Award.

12.      NATIONAL SECURITY: CLASSIFIABLE RESULTS ORIGINATING UNDER AN AWARD (OCT
         2004)

a.       This award is intended for unclassified, publicly releasable research.
         You will not be granted access to classified information. DOE/NNSA does
         not expect that the results of the research project will involve
         classified information. Under certain circumstances, however, a
         classification review of information originated under the award may be
         required. The Department may review research work generated under this
         award at any time to determine if it requires classification.

b.       Executive Order 12958 (60 Fed. Reg. 19,825 (1995)) states that basic
         scientific research information not clearly related to the national
         security shall not be classified. Nevertheless, some information
         concerning (among other things) scientific, technological, or economic
         matters relating to national security or cryptology may require
         classification. If you originate information during the course of this
         award that you believe requires classification under this Executive
         order, you must promptly:

          1.   Notify the DOE Project Officer identified in Block 11 and the DOE
               Award Administrator identified in Block 12 of the Notice of
               Financial Assistance Award.

          2.   Submit the information by registered mail directly to the
               Director, Office of Classification and Information Control,
               SO-10.2; U.S. Department of Energy; P.O. Box A; Germantown, MD
               20875-0963, for classification review.

          3.   Restrict access to the information to the maximum extent possible
               until you are informed that the information is not classified,
               but no longer than 30 days after receipt by the Director, Office
               of Classification and Information Control.

c.       If you originate information concerning the production or utilization
         of special nuclear material (i.e., plutonium, uranium enriched in the
         isotope 233 or 235, and any other material so determined under section
         51 of the Atomic Energy Act) or nuclear energy, you must:

                                       5
<PAGE>

          1.   Notify the DOE Project Officer identified in Block 11 and the DOE
               Award Administrator identified in Block 12 of the Notice of
               Financial Assistance Award.

          2.   Submit the information by registered mail directly to the
               Director, Office of Classification and Information Control,
               SO-10.2; U.S. Department of Energy; P. O. Box A; Germantown, MD
               20875-0963 for classification review within 180 days of the date
               the recipient first discovers or first has reason to believe that
               the information is useful in such production or utilization.

          3.   Restrict access to the information to the maximum extent possible
               until you are informed that the information is not classified,
               but no longer than 90 days after receipt by the Director, Office
               of Classification and Information Control.

d.       If DOE determines any of the information requires classification, you
         agree that the Government may terminate the award by mutual agreement
         in accordance with 10 CFR 600.25(d). All material deemed to be
         classified must be forwarded to the DOE, in a manner specified by DOE.

e.       If DOE does not respond within the specified time periods, you are
         under no further obligation to restrict access to the information.

13.      CONTINUATION APPLICATION AND FUNDING (OCT 2004)

a.       Continuation Application. A continuation application is a
         non-competitive application for an additional budget period within a
         previously approved project period. At least 90 days before the end of
         each budget period, you must submit to the DOE Project Officer
         identified in Block 11 and the DOE Award Administrator identified in
         Block 12 of the Notice of Financial Assistance Award your continuation
         application, which includes the following information:

          1.   A report on your progress towards meeting the objectives of the
               project, including any significant findings, conclusions, or
               developments, and an estimate of any unobligated balances
               remaining at the end of the budget period. If the remaining
               unobligated balance is estimated to exceed 20 percent of the
               funds available for the budget period, explain why the excess
               funds have not been obligated and how they will be used in the
               next budget period.

          2.   A detailed budget and supporting justification for the upcoming
               budget period if additional funds are requested, a reduction of
               funds is anticipated, or a budget for the upcoming budget period
               was not approved at the time of award.

          3.   A description of your plans for the conduct of the project during
               the upcoming budget period, if there are changes from the DOE
               approved application.

                                       6
<PAGE>

b.       Continuation Funding. Continuation funding is contingent on (1)
         availability of funds; (2) satisfactory progress towards meeting the
         objectives of your approved application; (3) submittal of required
         reports; and (4) compliance with the terms and conditions of the award.

14.      LOBBYING RESTRICTIONS (OCT 2004)

By accepting funds under this award, you agree that none of the funds obligated
on the award shall be expended, directly or indirectly, to influence
congressional action on any legislation or appropriation matters pending before
Congress, other than to communicate to Members of Congress as described in 18
U.S.C. 1913. This restriction is in addition to those prescribed elsewhere in
statute and regulation.

15.      NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS
         -- SENSE OF CONGRESS (OCT 2004)

It is the sense of the Congress that, to the greatest extent practicable, all
equipment and products purchased with funds made available under this award
should be American-made.

16.      ANNUAL INDIRECT COST PROPOSAL AND RECONCILIATION (OCT 2004)

a.       In accordance with the applicable cost principles, you must submit an
         annual indirect cost proposal, reconciled to your financial statements,
         within six months after the close of each fiscal year, unless you have
         negotiated a predetermined or fixed indirect rate(s), or fixed amount
         for indirect or facilities and administration (F&A) costs.

b.       You should submit your annual indirect cost proposal directly to the
         cognizant agency for negotiating and approving indirect costs. If DOE
         is the cognizant agency, send your proposal to the Cognizant Department
         of Energy Office (CDO). If you do not have a cognizant agency or if you
         do not know your DOE CDO, contact the DOE Award Administrator
         identified in Block 12 of the Notice of Financial Assistance Award.

17.      INSOLVENCY, BANKRUPTCY OR RECEIVERSHIP

(a)      You shall immediately notify the DOE Contracting Officer of: (i) your
         intent to, or your parent's intent to, institute a voluntary case
         seeking liquidation or reorganization under the Bankruptcy Act; (ii)
         your consent to the institution of an involuntary case under the
         Bankruptcy Act against you or your parent; (iii) the filing of any
         similar proceeding for or against you or your parent, or its consent
         to, the dissolution, winding-up or readjustment of your debts,
         appointment of a receiver, conservator, trustee, or other officer with
         similar powers over you, under any other applicable state or federal
         law; or (iv) your insolvency due to your inability to pay your debts
         generally as they become due.

(b)      Upon the occurrence of any of the four situations described in
         paragraph (a), and until DOE has conducted an Agency Review of your
         financial status, you are prohibited from drawing down on DOE funds
         without authorization from the DOE Contracting Officer, and any
         invoices submitted for reimbursement must be approved by the
         Contracting Officer. In addition, DOE reserves the right to change your
         payment method or institute payment controls as a result of the Agency
         Review.

                                       7
<PAGE>

(c)      If you fail to notify the DOE Contracting Officer of any of the
         situations described in paragraph (a) or violate the provisions of
         paragraph (b), then DOE may unilaterally suspend payments or terminate
         this Award.

(d)      This provision supersedes the Payment Procedures provision contained in
         these Special Terms and Conditions.

                                       8
<PAGE>

                                                         DE-FC36-04GO14233, A001
                                                                        CSB-1003

                                                                    Attachment 2

                                    CSB-1003
                   Intellectual Property Provisions (CSB-1003)
                              Cooperative Agreement
                     Research, Development, or Demonstration
                            Domestic Small Businesses

01.  FAR 52.227-1               Authorization and Consent (JUL 1995)-Alternate I
                                (APR 1984)

02.                             FAR 52.227-2 Notice and
                                Assistance Regarding
                                Patent and Copyright
                                Infringement (AUG 1996)
                                This clause is not
                                applicable if the award
                                is for less than
                                $100,000, in aggregate.

03.  10 CFR 600.325             Rights in Data - General (OCT 2003)
                                Appendix A

04.  FAR 52.227-23              Rights to Proposal Data (Technical) (JUN 1987)

05  10 CFR 600.325              Patent Rights (Small Business Firms and
                                Nonprofit Appendix A Organizations) (OCT 2003)

NOTE: In reading these provisions, any reference to "contractor" shall mean
"recipient," and any reference to "contract" or "subcontract" shall mean "award"
or "subaward."

                                                                       CSB-1003

<PAGE>

01.     FAR 52.227-1 Authorization and Consent (JUL 1995)-Alternate I (APR 1984)

(a)      The Government authorizes and consents to all use and manufacture of
         any invention described in and covered by a United States patent in the
         performance of this contract or any subcontract at any tier.

(b)      The Contractor agrees to include, and require inclusion of, this
         clause, suitably modified to identify the parties, in all subcontracts
         at any tier for research and development expected to exceed the
         simplified acquisition threshold; however, omission of this clause from
         any subcontract, including those at or below the simplified acquisition
         threshold, does not affect this authorization and consent.

(End of clause)

02.      FAR 52.227-2 Notice and Assistance Regarding Patent and Copyright
         Infringement (AUG 1996)

(a)      The Contractor shall report to the Contracting Officer, promptly and in
         reasonable written detail, each notice or claim of patent or copyright
         infringement based on the performance of this contract of which the
         Contractor has knowledge.

(b)      In the event of any claim or suit against the Government on account of
         any alleged patent or copyright infringement arising out of the
         performance of this contract or out of the use of any supplies
         furnished or work or services performed under this contract, the
         Contractor shall furnish to the Government, when requested by the
         Contracting Officer, all evidence and information in possession of the
         Contractor pertaining to such suit or claim. Such evidence and
         information shall be furnished at the expense of the Government except
         where the Contractor has agreed to indemnify the Government.

(c)      The Contractor agrees to include, and require inclusion of, this clause
         in all subcontracts at any tier for supplies or services (including
         construction and architect-engineer subcontracts and those for
         material, supplies, models, samples, or design or testing services)
         expected to exceed the simplified acquisition threshold at FAR 2.101.

(End of clause)

03.      10 CFR Part 600.325 Appendix A, Rights in Data - General (OCT 2003)

(a)      Definitions

         Computer Data Bases, as used in this clause, means a collection of data
in a form capable of, and for the purpose of, being stored in, processed, and
operated on by a computer. The term does not include computer software.

         Computer software, as used in this clause, means (i) computer programs
which are data comprising a series of instructions, rules, routines or
statements, regardless of the media in which recorded, that allow or cause a
computer to perform a specific operation or series of operations and (ii) data
comprising source code listings, design details, algorithms, processes, flow
charts, formulae, and related material that would enable the computer program to
be produced, created or compiled. The term does not include computer data bases.

                                                                        CSB-1003
                                       1

<PAGE>

         Data, as used in this clause, means recorded information, regardless of
form or the media on which it may be recorded. The term includes technical data
and computer software. The term does not include information incidental to
administration, such as financial, administrative, cost or pricing, or
management information.

         Form, fit, and function data, as used in this clause, means data
relating to items, components, or processes that are sufficient to enable
physical and functional interchangeability, as well as data identifying source,
size, configuration, mating, and attachment characteristics, functional
characteristics, and performance requirements; except that for computer software
it means data identifying source, functional characteristics, and performance
requirements but specifically excludes the source code, algorithm, process,
formulae, and flow charts of the software.

         Limited rights, as used in this clause, means the rights of the
Government in limited rights data as set forth in the Limited Rights Notice of
subparagraph (g)(2) if included in this clause.

         Limited rights data, as used in this clause, means data (other than
computer software) developed at private expense that embody trade secrets or are
commercial or financial and confidential or privileged.

         Restricted computer software, as used in this clause, means computer
software developed at private expense and that is a trade secret; is commercial
or financial and is confidential or privileged; or is published copyrighted
computer software; including minor modifications of such computer software.
Restricted rights, as used in this clause, means the rights of the Government in
restricted computer software, as set forth in a Restricted Rights Notice of
subparagraph (g)(3) if included in this clause, or as otherwise may be provided
in a collateral agreement incorporated in and made part of this contract,
including minor modifications of such computer software.

         Technical data, as used in this clause, means data (other than computer
software) which are of a scientific or technical nature. Technical data does not
include computer software, but does include manuals and instructional materials
and technical data formatted as a computer data base. Unlimited rights, as used
in this clause, means the right of the Government to use, disclose, reproduce,
prepare derivative works, distribute copies to the public, and perform publicly
and display publicly, in any manner and for any purpose, and to have or permit
others to do so.

(b)      Allocations of Rights

         (1) Except as provided in paragraph (c) of this clause regarding
copyright, the Government shall have unlimited rights in-

         (i) Data first produced in the performance of this agreement;

         (ii) Form, fit, and function data delivered under this agreement;

                                                                        CSB-1003
                                       2
<PAGE>

         (iii) Data delivered under this agreement (except for restricted
computer software) that constitute manuals or instructional and training
material for installation, operation, or routine maintenance and repair of
items, components, or processes delivered or furnished for use under this
agreement; and

         (iv) All other data delivered under this agreement unless provided
otherwise for limited rights data or restricted computer software in accordance
with paragraph (g) of this clause.

         (2) The Recipient shall have the right to-

         (i) Use, release to others, reproduce, distribute, or publish any data
first produced or specifically used by the Recipient in the performance of this
agreement, unless provided otherwise in paragraph (d) of this clause;

         (ii) Protect from unauthorized disclosure and use those data which are
limited rights data or restricted computer software to the extent provided in
paragraph (g) of this clause;

         (iii) Substantiate use of, add or correct limited rights, restricted
rights, or copyright notices and to take over appropriate action, in accordance
with paragraphs (e) and (f) of this clause; and

         (iv) Establish claim to copyright subsisting in data first produced in
the performance of this agreement to the extent provided in subparagraph (c)(1)
of this clause.

(c)      Copyright

         (1) Data first produced in the performance of this agreement. Unless
provided otherwise in paragraph (d) of this clause, the Recipient may establish,
without prior approval of the Contracting Officer, claim to copyright subsisting
in data first produced in the performance of this agreement. When claim to
copyright is made, the Recipient shall affix the applicable copyright notices of
17 U.S.C. 401 or 402 and acknowledgement of Government sponsorship (including
agreement number) to the data when such data are delivered to the Government, as
well as when the data are published or deposited for registration as a published
work in the U.S. Copyright Office. For such copyrighted data, including computer
software, the Recipient grants to the Government, and others acting on its
behalf, a paid-up nonexclusive, irrevocable worldwide license in such
copyrighted data to reproduce, prepare derivative works, distribute copies to
the public, and perform publicly and display publicly, by or on behalf of the
Government.

         (2) Data not first produced in the performance of this agreement. The
Recipient shall not, without prior written permission of the Contracting
Officer, incorporate in data delivered under this agreement any data not first
produced in the performance of this agreement and which contains the copyright
notice of 17 U.S.C. 401 or 402, unless the Recipient identifies such data and
grants to the Government, or acquires on its behalf, a license of the same scope
as set forth in subparagraph (c)(1) of this clause; provided, however, that if
such data are computer software the Government shall acquire a copyright license
as set forth in subparagraph (g)(3) of this clause if included in this agreement
or as otherwise may be provided in a collateral agreement incorporated in or
made part of this agreement.

                                                                        CSB-1003
                                       3
<PAGE>

         (3) Removal of copyright notices. The Government agrees not to remove
any copyright notices placed on data pursuant to this paragraph (c), and to
include such notices on all reproductions of the data.

(d)      Release, Publication and Use of Data

         (1) The Recipient shall have the right to use, release to others,
reproduce, distribute, or publish any data first produced or specifically used
by the Recipient in the performance of this agreement, except to the extent such
data may be subject to the Federal export control or national security laws or
regulations, or unless otherwise provided in this paragraph of this clause or
expressly set forth in this agreement.

         (2) The Recipient agrees that to the extent it receives or is given
access to data necessary for the performance of this award, which contain
restrictive markings, the Recipient shall treat the data in accordance with such
markings unless otherwise specifically authorized in writing by the contracting
officer.

(e)      Unauthorized Marking of Data

         (1) Notwithstanding any other provisions of this agreement concerning
inspection or acceptance, if any data delivered under this agreement are marked
with the notices specified in subparagraph (g)(2) or (g)(3) of this clause and
use of such is not authorized by this clause, or if such data bears any other
restrictive or limiting markings not authorized by this agreement, the
Contracting Officer may at any time either return the data to the Recipient or
cancel or ignore the markings. However, the following procedures shall apply
prior to canceling or ignoring the markings.

         (i) The Contracting Officer shall make written inquiry to the Recipient
affording the Recipient 30 days from receipt of the inquiry to provide written
justification to substantiate the propriety of the markings;

         (ii) If the Recipient fails to respond or fails to provide written
justification to substantiate the propriety of the markings within the 30-day
period (or a longer time not exceeding 90 days approved in writing by the
Contracting Officer for good cause shown), the Government shall have the right
to cancel or ignore the markings at any time after said period and the data will
no longer be made subject to any disclosure prohibitions.

         (iii) If the Recipient provides written justification to substantiate
the propriety of the markings within the period set in subparagraph (e)(1)(i) of
this clause, the Contracting Officer shall consider such written justification
and determine whether or not the markings are to be cancelled or ignored. If the
Contracting Officer determines that the markings are authorized, the Recipient
shall be so notified in writing. If the Contracting Officer determines, with
concurrence of the head of the contracting activity, that the markings are not
authorized, the Contracting Officer shall furnish the Recipient a written
determination, which determination shall become the final agency decision
regarding the appropriateness of the markings unless the Recipient files suit in
a court of competent jurisdiction within 90 days of receipt of the Contracting
Officer's decision. The Government shall continue to abide by the markings under
this subparagraph (e)(1)(iii) until final resolution of the matter either by the
Contracting Officer's determination becoming final (in which instance the
Government shall thereafter have the right to cancel or ignore the markings at
any time and the data will no longer be made subject to any disclosure
prohibitions), or by final disposition of the matter by court decision if suit
is filed.

                                                                        CSB-1003
                                       4
<PAGE>

         (2) The time limits in the procedures set forth in subparagraph (e)(1)
of this clause may be modified in accordance with agency regulations
implementing the Freedom of Information Act (5 U.S.C. 552) if necessary to
respond to a request thereunder.

(f)      Omitted or Incorrect Markings

         (1) Data delivered to the Government without either the limited rights
or restricted rights notice as authorized by paragraph (g) of this clause, or
the copyright notice required by paragraph (c) of this clause, shall be deemed
to have been furnished with unlimited rights, and the Government assumes no
liability for the disclosure, use, or reproduction of such data. However, to the
extent the data has not been disclosed without restriction outside the
Government, the Recipient may request, within 6 months (or a longer time
approved by the Contracting Officer for good cause shown) after delivery or such
data, permission to have notices placed on qualifying data at the Recipient's
expense, and the Contracting Officer may agree to do so if the Recipient:

         (i) Identifies the data to which the omitted notice is to be applied;

         (ii) Demonstrates that the omission of the notice was inadvertent;

         (iii) Establishes that the use of the proposed notice is authorized;
and

         (iv) Acknowledges that the Government has no liability with respect to
the disclosure, use, or reproduction of any such data made prior to the addition
of the notice or resulting from the omission of the notice.

         (2) The Contracting Officer may also:

         (i) Permit correction at the Recipient's expense of incorrect notices
if the Recipient identifies the data on which correction of the notice is to be
made, and demonstrates that the correct notice is authorized, or

         (ii) Correct any incorrect notices.

(g) Protection of Limited Rights Data and Restricted Computer Software

         When data other than that listed in subparagraphs (b)(1)(i); (ii), and
(iii) of this clause are specified to be delivered under this agreement and
qualify as either limited rights data or restricted computer software, if the
Recipient desires to continue protection of such data, the Recipient shall
withhold such data and not furnish them to the Government under this agreement.
As a condition to this withholding, the Recipient shall identify the data being
withheld and furnish form, fit, and function data in lieu thereof. Limited
rights data that are formatted as a computer data base for delivery to the
Government are to be treated as limited rights data and not restricted computer
software.

                                                                        CSB-1003
                                       5
<PAGE>

(h)      Subaward/Contract

         The Recipient has the responsibility to obtain from its
subrecipients/contractors all data and rights therein necessary to fulfill the
Recipient's obligations to the Government under this agreement. If a
subrecipient/contractor refuses to accept terms affording the Government such
rights, the Recipient shall promptly bring such refusal to the attention of the
Contracting Officer and not proceed with the subaward/contract award without
further authorization.

(i)      Additional Data Requirements

         In addition to the data specified elsewhere in this agreement to be
delivered, the Contracting Officer may, at anytime during agreement performance
or within a period of 3 years after acceptance of all items to be delivered
under this agreement, order any data first produced or specifically used in the
performance of this agreement. This clause is applicable to data ordered under
this subparagraph. Nothing contained in this subparagraph shall require the
Recipient to deliver any data the withholding of which is authorized by this
clause, or data which are specifically identified in this agreement as not
subject to this clause. When data are to be delivered under this subparagraph,
the Recipient will be compensated for converting the data into the prescribed
form, for reproduction, and for delivery.

(j)      The recipient agrees, except as may be otherwise specified in this
award for specific data items listed as not subject to this paragraph that the
Contracting Officer or an authorized representative may, up to three years after
acceptance of all items to be delivered under this award, inspect at the
Recipient's facility any data withheld pursuant to paragraph (g) of this clause,
for purposes of verifying the Recipient's assertion pertaining to the limited
rights or restricted rights status of the data or for evaluating work
performance. Where the Recipient whose data are to be inspected demonstrates to
the Contracting Officer that there would be a possible conflict of interest if
the inspection were made by a particular representative the Contracting Officer
shall designate an alternate inspector. (End of clause)

04.      FAR 52.227-23 Rights to Proposal Data (Technical) (JUN 1987)

Except for data contained on pages_NONE_ , it is agreed that as a condition of
award of this contract, and notwithstanding the conditions of any notice
appearing thereon, the Government shall have unlimited rights (as defined in the
"Rights in Data--General" clause contained in this contract) in and to the
technical data contained in the proposal dated _________________, upon which
this contract is based.

05 10 CFR 600.325 Appendix A, Patent Rights (Small Business Firms and Nonprofit
Organizations) (OCT 2003)

(a)      Definitions

         Invention means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States Code, or
any novel variety of plant which is or may be protected under the Plant Variety
Protection Act (7 U.S.C. 2321 et seq.).

                                                                        CSB-1003
                                       6
<PAGE>

         Made when used in relation to any invention means the conception or
first actual reduction to practice of such invention.

         Nonprofit organization means a university or other institution of
higher education or an organization of the type described in section 501(c)(3)
of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from taxation
under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a)) or any
nonprofit scientific or educational organization qualified under a State
nonprofit organization statute.

         Practical application means to manufacture in the case of a composition
or product, to practice in the case of a process or method, or operate in the
case of a machine or system; and, in each case, under such conditions as to
establish that the invention is being utilized and that its benefits are to the
extent permitted by law or Government regulations available to the public on
reasonable terms.

         Small business firm means a small business concern as defined at
section 2 of Public Law 85-536 (16 U.S.C. 632) and implementing regulations of
the Administrator of the Small Business Administration. For the purpose of this
clause, the size standards for small business concerns involved in Government
procurement and subcontracting at 13 CFR 121.3 through 121.8 and 13 CFR 121.3
through 121.12, respectively, will be used. Subject invention means any
invention of the Recipient conceived or first actually reduced to practice in
the performance of work under this award, provided that in the case of a variety
of plant, the date of determination (as defined in section 41(d) of the Plant
Variety Protection Act, 7 U.S.C. 2401(d) must also occur during the period of
award performance.

(b)      Allocation of Principal Rights

         The Recipient may retain the entire right, title, and interest
throughout the world to each subject invention subject to the provisions of this
Patent Rights clause and 35 U.S.C. 203. With respect to any subject invention in
which the Recipient retains title, the Federal Government shall have a
non-exclusive, nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the U.S. the subject invention throughout the
world.

(c) Invention Disclosure, Election of Title and Filing of Patent Applications by
Recipient

         (1) The Recipient will disclose each subject invention to DOE within
two months after the inventor discloses it in writing to Recipient personnel
responsible for the administration of patent matters. The disclosure to DOE
shall be in the form of a written report and shall identify the award under
which the invention was made and the inventor(s). It shall be sufficiently
complete in technical detail to convey a clear understanding to the extent known
at the time of disclosure, of the nature, purpose, operation, and the physical,
chemical, biological or electrical characteristics of the invention. The
disclosure shall also identify any publication, on sale or public use of the
invention and whether a manuscript describing the invention has been submitted
for publication and, if so, whether it has been accepted for publication at the
time of disclosure. In addition, after disclosure to DOE, the Recipient will
promptly notify DOE of the acceptance of any manuscript describing the invention
for publication or of any on sale or public use planned by the Recipient.

                                                                        CSB-1003
                                       7
<PAGE>

         (2) The Recipient will elect in writing whether or not to retain title
to any such invention by notifying DOE within two years of disclosure to DOE.
However, in any case where publication, on sale, or public use has initiated the
one-year statutory period wherein valid patent protection can still be obtained
in the U.S., the period for election of title may be shortened by the agency to
a date that is no more than 60 days prior to the end of the statutory period.

         (3) The Recipient will file its initial patent application on an
invention to which it elects to retain title within one year after election of
title or, if earlier, prior to the end of any statutory period wherein valid
patent protection can be obtained in the U.S. after a publication, on sale, or
public use. The Recipient will file patent applications in additional countries
or international patent offices within either ten months of the corresponding
initial patent application, or six months from the date when permission is
granted by the Commissioner of Patents and Trademarks to file foreign patent
applications when such filing has been prohibited by a Secrecy Order.

         (4) Requests for extension of the time for disclosure to DOE, election,
and filing under subparagraphs (c)(1), (2), and (3) of this clause may, at the
discretion of DOE, be granted.

(d)      Conditions When the Government May Obtain Title

         The Recipient will convey to DOE, upon written request, title to any
subject invention:

         (1) If the Recipient fails to disclose or elect the subject invention
within the times specified in paragraph (c) of this patent rights clause, or
elects not to retain title; provided that DOE may only request title within 60
days after learning of the failure of the Recipient to disclose or elect within
the specified times;

         (2) In those countries in which the Recipient fails to file patent
applications within the times specified in paragraph (c) of this Patent Rights
clause; provided, however, that if the Recipient has filed a patent application
in a country after the times specified in paragraph (c) of this Patent Rights
clause, but prior to its receipt of the written request of DOE, the Recipient
shall continue to retain title in that country; or

         (3) In any country in which the Recipient decides not to continue the
prosecution of any application for, to pay the maintenance fees on, or defend in
a reexamination or opposition proceeding on, a patent on a subject invention.

(e) Minimum Rights to Recipient and Protection of the Recipient Right To File

         (1) The Recipient will retain a non-exclusive royalty-free license
throughout the world in each subject invention to which the Government obtains
title, except if the Recipient fails to disclose the subject invention within
the times specified in paragraph (c) of this Patent Rights clause. The
Recipient's license extends to its domestic subsidiaries and affiliates, if any,
within the corporate structure of which the Recipient is a party and includes
the right to grant sublicenses of the same scope of the extent the Recipient was
legally obligated to do so at the time the award was awarded. The license is
transferable only with the approval of DOE except when transferred to the
successor of that part of the Recipient's business to which the invention
pertains.

                                                                        CSB-1003
                                       8
<PAGE>

         (2) The Recipient's domestic license may be revoked or modified by DOE
to the extent necessary to achieve expeditious practical application of the
subject invention pursuant to an application for an exclusive license submitted
in accordance with applicable provisions at 37 CFR part 404 and the agency's
licensing regulation, if any. This license will not be revoked in that field of
use or the geographical areas in which the Recipient has achieved practical
application and continues to take the benefits of the invention reasonably
accessible to the public. The license in any foreign country may be revoked or
modified at discretion of the funding Federal agency to the extent the
Recipient, its licensees, or its domestic subsidiaries or affiliates have failed
to achieve practical application in that foreign country.

         (3) Before revocation or modification of the license, the funding
Federal agency will furnish the Recipient a written notice of its intention to
revoke or modify the license, and the Recipient will be allowed thirty days (or
such other time as may be authorized by DOE for good cause shown by the
Recipient) after the notice to show cause why the license should not be revoked
or modified. The Recipient has the right to appeal, in accordance with
applicable regulations in 37 CFR part 404 and the agency's licensing
regulations, if any, concerning the licensing of Government-owned inventions,
any decision concerning the revocation or modification of its license.

(f)      Recipient Action To Protect Government's Interest

         (1) The Recipient agrees to execute or to have executed and promptly
deliver to DOE all instruments necessary to:

         (i) Establish or confirm the rights the Government has throughout the
world in those subject inventions for which the Recipient retains title; and

         (ii) Convey title to DOE when requested under paragraph (d) of this
Patent Rights clause, and to enable the government to obtain patent protection
throughout the world in that subject invention.

         (2) The Recipient agrees to require, by written agreement, its
employees, other than clerical and nontechnical employees, to disclose promptly
in writing to personnel identified as responsible for the administration of
patent matters and in a format suggested by the Recipient each subject invention
made under this award in order that the Recipient can comply with the disclosure
provisions of paragraph (c) of this Patent Rights clause, and to execute all
papers necessary to file patent applications on subject inventions and to
establish the Government's rights in the subject inventions. The disclosure
format should require, as a minimum, the information requested by paragraph
(c)(1) of this Patent Rights clause. The Recipient shall instruct such employees
through the employee agreements or other suitable educational programs on the
importance of reporting inventions in sufficient time to permit the filing of
patent applications prior to U.S. or foreign statutory bars.

         (3) The Recipient will notify DOE of any decision not to continue
prosecution of a patent application, pay maintenance fees, or defend in a
reexamination or opposition proceeding on a patent, in any country, not less
than 30 days before the expiration of the response period required by the
relevant patent office.

                                                                        CSB-1003
                                       9
<PAGE>

         (4) The Recipient agrees to include, within the specification of any
U.S. patent application and any patent issuing thereon covering a subject
invention, the following statement: "This invention was made with Government
support under (identify the award) awarded by (identify DOE). The Government has
certain rights in this invention."

(g)      Subaward/Contract

         (1) The Recipient will include this Patent Rights clause, suitably
modified to identify the parties, in all subawards/contracts, regardless of
tier, for experimental, developmental or research work to be performed by a
small business firm or nonprofit organization. The subrecipient/contractor will
retain all rights provided for the Recipient in this Patent Rights clause, and
the Recipient will not, as part of the consideration for awarding the
subcontract, obtain rights in the subcontractors' subject inventions.

         (2) The Recipient will include in all other subawards/contracts,
regardless of tier, for experimental, developmental or research work, the patent
rights clause required by 10 CFR 600.325(c).

         (3) In the case of subawards/contracts at any tier, DOE, the Recipient,
and the subrecipient/contractor agree that the mutual obligations of the parties
created by this clause constitute a contract between the subrecipient/contractor
and DOE with respect to those matters covered by the clause.

(h)      Reporting on Utilization of Subject Inventions

         The Recipient agrees to submit on request periodic reports no more
frequently than annually on the utilization of a subject invention or on efforts
at obtaining such utilization that are being made by the Recipient or its
licensees or assignees. Such reports shall include information regarding the
status of development, date of first commercial sale or use, gross royalties
received by the Recipient and such other data and information as DOE may
reasonably specify. The Recipient also agrees to provide additional reports in
connection with any march-in proceeding undertaken by DOE in accordance with
paragraph (j) of this Patent Rights clause. As required by 35 U.S.C. 202(c)(5),
DOE agrees it will not disclose such information to persons outside the
Government without the permission of the Recipient.

(i) Preference for United States Industry.

         Notwithstanding any other provision of this Patent Rights clause, the
Recipient agrees that neither it nor any assignee will grant to any person the
exclusive right to use or sell any subject invention in the U.S. unless such
person agrees that any products embodying the subject invention or produced
through the use of the subject invention will be manufactured substantially in
the U.S. However, in individual cases, the requirement for such an agreement may
be waived by DOE upon a showing by the Recipient or its assignee that reasonable
but unsuccessful efforts have been made to grant licenses on similar terms to
potential licensees that would be likely to manufacture substantially in the
U.S. or that under the circumstances domestic manufacture is not commercially
feasible.

                                                                        CSB-1003
                                       10
<PAGE>

(j)      March-in-Rights

         The Recipient agrees that with respect to any subject invention in
which it has acquired title, DOE has the right in accordance with procedures at
37 CFR 401.6 and any supplemental regulations of the Agency to require the
Recipient, an assignee or exclusive licensee of a subject invention to grant a
non-exclusive, partially exclusive, or exclusive license in any field of use to
a responsible applicant or applicants, upon terms that are reasonable under the
circumstances and if the Recipient, assignee, or exclusive licensee refuses such
a request, DOE has the right to grant such a license itself if DOE determines
that:

         (1) Such action is necessary because the Recipient or assignee has not
taken or is not expected to take within a reasonable time, effective steps to
achieve practical application of the subject invention in such field of use;

         (2) Such action is necessary to alleviate health or safety needs which
are not reasonably satisfied by the Recipient, assignee, or their licensees;

         (3) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not reasonably
satisfied by the Recipient, assignee, or licensee; or

         (4) Such action is necessary because the agreement required by
paragraph (i) of this Patent Rights clause has not been obtained or waived or
because a licensee of the exclusive right to use or sell any subject invention
in the U.S. is in breach of such agreement.

(k)      Special Provisions for Awards With Nonprofit Organizations

         If the Recipient is a nonprofit organization, it agrees that:

         (1) Rights to a subject invention in the U.S. may not be assigned
without the approval of DOE, except where such assignment is made to an
organization which has as one of its primary functions the management of
inventions, provided that such assignee will be subject to the same provisions
as the Recipient;

         (2) The Recipient will share royalties collected on a subject invention
with the inventor, including Federal employee co-inventors (when DOE deems it
appropriate) when the subject invention is assigned in accordance with 35 U.S.C.
202(e) and 37 CFR 401.10;

         (3) The balance of any royalties or income earned by the Recipient with
respect to subject inventions, after payment of expenses (including payments to
inventors) incidental to the administration of subject inventions, will be
utilized for the support of scientific or engineering research or education; and

         (4) It will make efforts that are reasonable under the circumstances to
attract licensees of subject inventions that are small business firms and that
it will give preference to a small business firm if the Recipient determines
that the small business firm has a plan or proposal for marketing the invention
which, if executed, is equally likely to bring the invention to practical
application as any plans or proposals from applicants that are not small
business firms; provided that the Recipient is also satisfied that the small
business firm has the capability and resources to carry out its plan or
proposal. The decision whether to give a preference in any specific case will be
at the discretion of the Recipient. However, the Recipient agrees that the

                                                                        CSB-1003
                                       11

<PAGE>

Secretary of Commerce may review the Recipient's licensing program and decisions
regarding small business applicants, and the Recipient will negotiate changes to
its licensing policies, procedures or practices with the Secretary when the
Secretary's review discloses that the Recipient could take reasonable steps to
implement more effectively the requirements of this paragraph (k)(4).

(l)      Communications

         All communications required by this Patent Rights clause should be sent
to the DOE Patent Counsel address listed in the Award Document.

m b)     Electronic Filing

         Unless otherwise Specified in the award, the information identified in
paragraphs (f)(2) and (f)(3) may be electronically filed. [End of clause].

                                                                        CSB-1003
                                       12
<PAGE>

Applicant's Name:       Startech Environmental Corp.                 Award Number:      DE-FC36-04GO14233 A001        Attachment #3
                        ----------------------------                                    ----------------------
                                              Budget Information - Non Construction Programs
                                                                                                          OMB Approval No.0348-0044
------------------------------------------------------------------------------------------------------------------------------------
Section A - Budget Summary
----------------------------------------------------------------------------------- ------------------------------------------------
  Grant Program Function    Catalog of Federal       Estimated Unobligated Funds                  New or Revised Budget
        or Activity        Domestic Assistance
            (a)                    Number (b)
------------------------------------------------------------------------------------------------------------------------------------
                                                  Federal         Non-Federal        Federal         Non-Federal           Total
                                                    (c)               (d)              (e)               (f)                (g)
------------------------------------------------------------------------------------------------------------------------------------
1. Task 1                                                                            $82,922.00         $20,730.00       $103,652.00
------------------------------------------------------------------------------------------------------------------------------------
2. Task 2                                                                           $187,084.00         $46,771.00       $233,855.00
------------------------------------------------------------------------------------------------------------------------------------
3. Task 3                                                                           $225,994.00         $56,499.00       $282,493.00
------------------------------------------------------------------------------------------------------------------------------------
4. $0.00
------------------------------------------------------------------------------------------------------------------------------------
5     Totals                                         $0.00              $0.00       $496,000.00        $124,000.00       $620,000.00
------------------------------------------------------------------------------------------------------------------------------------
Section B - Budget
Categories
------------------------------------------------------------------------------------------------------------------------------------

---------------------------- -------------------------------------------------------------------------- ------------------------
                                                 Grant Program, Function or Activity
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Total
6.  Object Class Categories                           (1) Task 1      (2) Task 2       (3) Task 3      (4)              (5)
--------------------------------------------------------------------------------------------------------------------------------
     a.  Personnel                                    $30,949.00       37,295.00       $30,036.00                    $98,280.00
--------------------------------------------------------------------------------------------------------------------------------
     b.  Fringe Benefits                              $12,565.00       15,142.00       $12,195.00                    $39,902.00
--------------------------------------------------------------------------------------------------------------------------------
     c.  Travel                                        $4,000.00                                                      $4,000.00
--------------------------------------------------------------------------------------------------------------------------------
     d.  Equipment                                                     36,900.00                                     $36,900.00
--------------------------------------------------------------------------------------------------------------------------------
     e.  Supplies                                        $800.00       60,320.00        $4,000.00                    $65,120.00
--------------------------------------------------------------------------------------------------------------------------------
     f.  Contractual                                                   17,516.00      $153,302.00                   $170,818.00
--------------------------------------------------------------------------------------------------------------------------------
     g. Construction $0.00
--------------------------------------------------------------------------------------------------------------------------------
     h.  Other                                                                         $29,254.00                    $29,254.00
--------------------------------------------------------------------------------------------------------------------------------
     i.  Total Direct Charges (sum of 6a-6h)          $48,314.00     $167,173.00      $228,787.00     $0.00         $444,274.00
--------------------------------------------------------------------------------------------------------------------------------
     j.  Indirect Charges                             $55,337.00      $66,683.00       $53,706.00                   $175,726.00
--------------------------------------------------------------------------------------------------------------------------------
     k.  Totals (sum of 6i and 6j)                   $103,651.00     $233,856.00      $282,493.00     $0.00         $620,000.00
--------------------------------------------------------------------------------------------------------------------------------
7. Program Income $0.00
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 SF-424A (Rev. 4-92)
                                                                                                    Prescribed by OMB Circular A-102

Previous Edition Usable                               Authorized for Local Reproduction

                                                                    Page 1 of 1

<PAGE>

------------------------------------------------------------------------------------------------------------------------------------
1.   Identification Number: 2. Program/Project Title: DE - FC36 - 04GO14233.A001
     Startech Hydrogen Production Project

------------------------------------------------------------------------------------------------------------------------------------
3.   Recipient: Startech Environmental Corp.

------------------------------------------------------------------------------------------------------------------------------------
4. Reporting Requirements:                             Frequency           No. of Copies                       Addressees

MANAGEMENT REPORTING
[x] Progress Report                                       Q
[x] Special Status Report                                 A

SCIENTIFIC/TECHNICAL REPORTING
(Reports/Products must be submitted with
appropriate DOE F 241. The forms are
available at www.osti.gov/elink.)

         Report/Product                    Form
[x]Final Scientific/Technical Report    DOE F 241.3       F
[x]Conference papers/proceedings*       DOE F 241.3       A
[x]Software/Manual                      DOE F 241.4       A              Upload only 1 copy to        All reports must be submitted
[ ]Other (see special instructions)     DOE F 241.3                      the address in the           via https://www.eere-
 * Scientific and technical conferences only                             next column at the           pmc.energy.gov/Submit Report.
                                                                         interval specified in                  asp.
                                                                         the previous column
FINANCIAL REPORTING
[x]SF-269, Financial Status Report                        FQ
[ ]SF-269A, Financial Status Report (short form)
[ ]SF-272, Federal Cash Transactions Report

CLOSEOUT REPORTING
[x]Final Invention and Patent Report                      F
[x]Property Certification                                 F
[ ]Other (Final Narrative Report)

OTHER REPORTING
[x]Other (see special instructions)                       A
------------------------------------------------------------------------------------------------------------------------------------

FREQUENCY CODES AND DUE DATES:
     A - Within 5 calendar days after events or as specified.
     F - Final; 90 calendar days after expiration or termination of the award.
     Y - Yearly; 90 days after the end of the reporting period.
     S - Semiannually; within 30 days after end of reporting period.
     Q - Quarterly; within 30 days after end of the reporting period.

------------------------------------------------------------------------------------------------------------------------------------
5. Special Instructions: Forms are available at http://www.eere.energy.gov/golden/funding_post_award.html.

         Special Status Report: Provide notice of problems, delays, or adverse conditions which materially impair the
         Recipient's ability to meet the objectives of the award or developments that have significant favorable
         impact on the project. The report must incluse remedial action to be taken to correct or resolve any problem
         or adverse condition.
         Other: Provide input on project accomplishments to the annual Hydrogen, Fuel Cells & Infrastructure Program Progress
         Report upon request.
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

                Federal Assistance Reporting Instructions (12/04)

I.       MANAGEMENT REPORTING

         Progress Report

         The Progress Report must provide a concise narrative assessment of the
         status of work and include the following information and any other
         information identified under Special Instructions on the Federal
         Assistance Reporting Checklist:

         1.   The DOE award number and name of the recipient.

         2.   The project title and name of the project director/principal
              investigator.

         3.   Date of report and period covered by the report.

         4.   A comparison of the actual accomplishments with the goals and
              objectives established for the period and reasons why the
              established goals were not met.

         5.   A discussion of what was accomplished under these goals during
              this reporting period, including major activities, significant
              results, major findings or conclusions, key outcomes or other
              achievements. This section should not contain any proprietary data
              or other information not subject to public release. If such
              information is important to reporting progress, do not include the
              information, but include a note in the report advising the reader
              to contact the Principal Investigator or the Project Director for
              further information.

         6.   Cost Status. Show approved budget by budget period and actual
              costs incurred. If cost sharing is required break out by DOE
              share, recipient share, and total costs.

         7.   Schedule Status. List milestones, anticipated completion dates and
              actual completion dates. If you submitted a project management
              plan with your application, you must use this plan to report
              schedule and budget variance. You may use your own project
              management system to provide this information.

         8.   Any changes in approach or aims and reasons for change. Remember
              significant changes to the objectives and scope require prior
              approval by the contracting officer.

         9.   Actual or anticipated problems or delays and actions taken or
              planned to resolve them.

         10.  Any absence or changes of key personnel or changes in
              consortium/teaming arrangement.

         11.  A description of any product produced or technology transfer
              activities accomplished during this reporting period, such as:

              A.  Publications (list journal name, volume, issue); conference
                  papers; or other public releases of results. Attach or send
                  copies of public releases to the DOE Project Officer
                  identified in Block 11 of the Notice of Financial Assistance
                  Award.

                                       2
<PAGE>

              B.  Web site or other Internet sites that reflect the results of
                  this project.

              C.  Networks or collaborations fostered.

              D.  Technologies/Techniques.

              E.  Inventions/Patent Applications.

              F.  Other products, such as data or databases, physical
                  collections, audio or video, software or netware, models,
                  educational aid or curricula, instruments or equipment.

         Special Status Report

         The recipient must report the following events by e-mail as soon as
         possible after they occur:

         1.   Developments that have a significant favorable impact on the
              project.

         2.   Problems, delays, or adverse conditions which materially impair
              the recipient's ability to meet the objectives of the award or
              which may require DOE to respond to questions relating to such
              events from the public. For example, the recipient must report any
              of the following incidents and include the anticipated impact and
              remedial action to be taken to correct or resolve the
              problem/condition:

              a.  Any single fatality or injuries requiring hospitalization of
                  five or more individuals.

              b.  Any significant environmental permit violation.

              c.  Any verbal or written Notice of Violation of any
                  Environmental, Safety, and Health statutes or regulations.

              d.  Any incident which causes a significant process or hazard
                  control system failure.

              e.  Any event which is anticipated to cause a significant schedule
                  slippage or cost increase.

              f.  Any damage to Government-owned equipment in excess of $50,000.

              g.  Any other incident that has the potential for high visibility
                  in the media.

                                       3
<PAGE>

II.      SCIENTIFIC/TECHNICAL REPORTS

         Final Scientific/Technical Report

         Content. The final scientific/technical report must include the
              following information and any other information identified under
              Special Instructions on the Federal Assistance Reporting
              Checklist:

         1.   Identify the DOE award number; name of recipient; project title;
              name of project director/principal investigator; and
              consortium/teaming members.

         2.   Display prominently on the cover of the report any authorized
              distribution limitation notices, such as patentable material or
              protected data. Reports delivered without such notices may be
              deemed to have been furnished with unlimited rights, and the
              Government assumes no liability for the disclosure, use or
              reproduction of such reports.

         3.   Provide an executive summary, which includes a discussion of 1)
              how the research adds to the understanding of the area
              investigated; 2) the technical effectiveness and economic
              feasibility of the methods or techniques investigated or
              demonstrated; or 3) how the project is otherwise of benefit to the
              public. The discussion should be a minimum of one paragraph and
              written in terms understandable by an educated layman.

         4.   Provide a comparison of the actual accomplishments with the goals
              and objectives of the project

         5.   Summarize project activities for the entire period of funding,
              including original hypotheses, approaches used, problems
              encountered and departure from planned methodology, and an
              assessment of their impact on the project results. Include, if
              applicable, facts, figures, analyses, and assumptions used during
              the life of the project to support the conclusions.

         6.   Identify products developed under the award and technology
              transfer activities, such as:

              a.  Publications (list journal name, volume, issue), conference
                  papers, or other public releases of results. If not provided
                  previously, attach or send copies of any public releases to
                  the DOE Project Officer identified in Block II of the Notice
                  of Financial Assistance Award;

              b.  Web site or other Internet sites that reflect the results of
                  this project;

              c.  Networks or collaborations fostered;

              d.  Technologies/Techniques;

              e.  Inventions/Patent Applications, licensing agreements; and

                                       4
<PAGE>

              f.  Other products, such as data or databases, physical
                  collections, audio or video, software or netware, models,
                  educational aid or curricula, instruments or equipment.

         7. For projects involving computer modeling, provide the following
            information with the final report:

              a.  Model description, key assumptions, version, source and
                  intended use;

              b.  Performance criteria for the model related to the intended
                  use;

              c.  Test results to demonstrate the model performance criteria
                  were met (e.g., code verification/validation, sensitivity
                  analyses, history matching with lab or field data, as
                  appropriate);

              d.  Theory behind the model, expressed in non-mathematical terms;

              e.  Mathematics to be used, including formulas and calculation
                  methods;

              f.  Whether or not the theory and mathematical algorithms were
                  peer reviewed, and, if so, include a summary of theoretical
                  strengths and weaknesses;

              g.  Hardware requirements; and

              h.  Documentation (e.g., users guide, modle code).

         Electronic Submission.  The final scientific/technical report must be
         submitted electronically via the DOE Energy Link System (E-Link)
         at http://www.osti.gov/elink-2413.

         Electronic Format. Reports must be submitted in the ADOBE PORTABLE
         DOCUMENT FORMAT (PDF) and be one integrated PDF file that contains all
         text, tables, diagrams, photographs, schematic, graphs, and charts.
         Materials, such as prints, videos, and books, that are essential to the
         report but cannot be submitted electronically, should be sent to the
         DOE Award Administrator at the address listed in Block 12 of the Notice
         of Financial Assistance Award.

         Submittal Form. The report must be accompanied by a completed
         electronic version of DOE Form 241.3, "U.S. Department of Energy (DOE),
         Announcement of Scientific and Technical Information (STI)." You can
         complete, upload, and submit the DOE F.241.3 online via E-Link. You are
         encouraged not to submit patentable material or protected data in these
         reports, but if there is such material or data in the report, you must:
         (1) clearly identify patentable or protected data on each page of the
         report; (2) identify such material on the cover of the report; and (3)
         mark the appropriate block in Section K of the DOE F 241.3. Reports
         must not contain any limited rights data (proprietary data), classified
         information, information subject to export control classification, or
         other information not subject to release. Protected data is specific

                                       5

<PAGE>

         technical data, first produced in the performance of the award that is
         protected from public release for a period of time by the terms of the
         award agreement.

         Conference Papers/Proceedings

         Content. The recipient must submit a copy of any conference
         papers/proceedings, with the following information: (1) Name of
         conference; (2) Location of conference; (3) Date of conference; and (4)
         Conference sponsor.

         Electronic Submission. Scientific/technical conference
         paper/proceedings must be submitted electronically via the DOE Energy
         Link System (E-Link) at http://www.osti.g_ov/elink-2413.
         Non-scientific/technical conference papers/proceedings must be sent to
         the URL listed on the Reporting Checklist.

         Electronic Format. Conference papers/proceedings must be submitted in
         the ADOBE PORTABLE DOCUMENT FORMAT (PDF) and be one integrated PDF file
         that contains all text, tables, diagrams, photographs, schematic,
         graphs, and charts. If the proceedings cannot be submitted
         electronically, they should be sent to the DOE Award Administrator at
         the address listed in Block 12 of the Notice of Financial Assistance
         Award.

         Submittal Form. Scientific/technical conference papers/proceedings must
         be accompanied by a completed DOE Form 241.3. The form and instructions
         are available on E-Link at http://www.osti.gov/elink-2413. This form is
         not required for non-scientific or non-technical conference papers or
         proceedings.

         Software/Manual

         Content. Unless otherwise specified in the award, the following must be
         delivered: source code, the executable object code and the minimum
         support documentation needed by a competent user to understand and use
         the software and to be able to modify the software in subsequent
         development efforts.

         Submission. Software/manual submissions must be sent to the DOE Award
         Administrator identified in Block 12 of the Notice of Financial
         Assistance Award. The submission must be sent on a CD-ROM, 3.5 "floppy
         disk", or zip disk.

         Submittal Form. Each software deliverable and its manual must be
         accompanied by a completed DOE Form 241.4 "Announcement of U.S.
         Department of Energy Computer Software." The form and instructions are
         available on E-Link at http://www.osti.gov/estsc/doe2414.pdf.

III.     FINANCIAL REPORTING

         Recipients must complete the financial reports identified on the
         Reporting Checklist in accordance with the report instructions. These
         standard forms are available at
         http://www.whitehouse.gov/omb/grants/index.html. Fillable forms are
         available at www.grants.pr.doe.gov.

                                       6
<PAGE>

IV.      CLOSEOUT REPORTS

         Final Invention and Patent Report

         The recipient must provide a DOE Form 2050.11, "PATENT CERTIFICATION."
         This form is available at
         http://www.directives.doe.gov/pdfs/forms/2050-11.pdf and
         www.grants.pr.doe.gov.

         Property Certification

         The recipient must provide the Property Certification, including the
         required inventories of non-exempt property, located at
         www.grants.pr.doe.gov .

                                       7

<PAGE>

                                                        DE-FC36-04GO14233, A001
                                                                   Attachment 5

                             Statement of Objectives

                      Startech Hydrogen Production Project

Project Summary:
----------------
The purpose of this project is to evaluate viability of hydrogen production from
waste materials using an integrated system consisting of a Plasma Converter and
a StarCell(TM) multistage ceramic membrane hydrogen separation system. This is a
renewal of DOE award DE-FC36-04GO14233.

     o    Implement and test PCS design improvements; focus on improved thermal
          efficiency and clean synthesis gas production
     o    Implement and test StarCell(TM) System improvements; focus on
          increased throughput and increased yield
     o    Integrated system testing:

          o    Characterize the performance of the integrated Plasma Converter
               and StarCell(TM) Systems for hydrogen production and purification
               from surrogate medical / municipal waste and coal.
          o    Compare integrated hydrogen production performance to baseline
               data, conventional technologies, and DOE benchmarks.
          o    Run parametric studies to evaluate design improvements made to
               the PCS and the StarCell(TM) separation system.
          o    Determine the effect of process contaminants on the StarCell(TM)
               system.
     o    Compare system test results with DOE targets for gasification and
          membrane separation.

Tasks:
------

Task 1- Management and Support

        Subtask 1.1 - Development Program Plan
        A program plan will be developed describing in detail the work required
        to fulfill the program Scope of work. Program plan information will
        include tasks to be completed in the scope of work, responsible parties,
        and a timeline for completion of program tasks. The Program plan will
        also serve as a tool for communicating the work breakdown structure and
        resource requirements to those who will work on or be affected by the
        test program.

        Subtask 1.2 - Develop Test Plan
        The Test Plan will describe test specific calibration procedures,
        methods for determining process parameters, test documentation
        requirements, sampling techniques and frequency, information required to
        perform the testing, and data to be taken before, during and after
        testing. The test plan will provide guidance in the gasification of all
        feedstocks tested under this program as well as evaluation of the
        hydrogen separation performance.

<PAGE>

        Subtask 1.3 - Program Management
         Program management is an ongoing task whose ultimate output is the
         timely and cost effective completion of the program objectives. Program
         management is documented through reports that will be submitted at the
         end of each month of work. Each report will consist of a description of
         the work performed during that month and should correlate to the
         program schedule and work breakdown structure laid out in the Program
         Plan. Startech will notify the customer of deviation from the program
         plan and provide justification for that deviation via the monthly
         reports.

         Program reviews, Project meetings, and other administrative functions
         or documentation used to communicate program status are all considered
         to be part of the Program Management subtask.

Task 2 - Perform System Modifications
System modification encompasses changes to the Plasma Converter, Gas Handling
Equipment, StarCell Hydrogen purification system, and instrumentation to
facilitate hydrogen production and process evaluation. The intent of system
modification is to optimize the overall system configuration for the efficient
and reliable production of hydrogen product. StarCell modifications are expected
to encompass additional membrane capacity and incorporation of membrane
improvements. PCS modifications are expected to encompass novel Sulfur removal
techniques, thermal system integration, and process analysis instrumentation
improvements. Specific modifications will be described further in the Program
Plan.

Task 3 - Perform Testing
Testing of the integrated Hydrogen production system encompasses all aspects of
system characterization both on the feedstock gasification side of the process
and on the hydrogen separation side of the process. Testing, data collection,
and process analysis will be performed in accordance with the Test Plan
completed in Subtask 1.2. Testing resources have been allocated to support 3
feedstocks tested in triplicate constituting a total of 9 test runs. Frequency
of various sampling during each test run will be defined by the Test Plan. Data
will be collected in several forms for each test run including online data
logging, manual data logging, grab sample internal analysis, and independent
laboratory sample analysis. The feedstocks proposed for testing are surrogate
wastes composed to represent a medical / municipal waste feedstock, and coal as
a basis for comparison with other gasification technologies. The exact feedstock
composition is subject to change based on guidance from DOE targeting feedstocks
that may better support a hydrogen economy.

The deliverables for Task 3 will be the submittal of a written Test Report that
will include a description of each test performed as well as data and analysis
of each test run performed. Process feasibility will be determined by comparing
performance and economic metrics of the Plasma Gasification System and the
StarCell Hydrogen Purification system with DOE Targets and Barriers.Exhibit 10.33

         This STOCK PURCHASE & REGISTRATION RIGHTS AGREEMENT (this "Agreement"),
is made and entered into as of September 20, 2005, by and between STARTECH
ENVIRONMENTAL CORPORATION, a Colorado corporation (the "Company"), and Nutmeg
Environmental, L.P., an Illinois Limited Partnership ( the "Purchaser").

                                    RECITALS
                                    --------

         The Company desires to issue and sell to the Purchaser in a private
placement (the "Offering"), and the Purchaser desire to purchase from the
Company, on the terms and subject to the conditions set forth herein, 37,500
shares (the "Shares") of common stock, no par value ("Common Stock"), of the
Company, and an equivalent number of three-year warrants to purchase shares of
Common Stock (the "Warrants" and, together with the Shares, the "Securities"),
the terms of such Warrants being as set forth in the Warrant Agreement
substantially in the form attached as Exhibit A hereto. This Agreement and the
Warrants shall be referred to herein collectively as the "Transaction
Documents".

         The Purchaser desires, upon the terms and conditions set forth in this
Agreement, to purchase Securities in the Offering.

         The Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities regulation afforded by
Section 4(2) of the Securities Act (as defined in Section 3 hereof) and Rule 506
under Regulation D.

         IN CONSIDERATION of the premises and mutual covenants contained in this
Agreement and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the Company and the Purchaser agree as
follows:

         1. Purchase and Sale of Securities.

         (a) Purchase and Sale of Shares. Subject to the terms and conditions
hereof, at the Closing identified in Section 2 hereof, the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company,
the Shares, which number of Shares are calculated by dividing seventy thousand
five hundred dollars ($70,500) (the "Purchase Price") by $ 1.88 per Share (the
"Share Price"), which Share Price is equal to a twenty-one percent (21%)
discount to the average closing price per share of the Common Stock for the ten
(10) consecutive trading days immediately preceding September 6, 2005, shall
hereinafter be referred to as the "Average Closing Price."

          (b) Purchase and Sale of Warrants. In addition to the foregoing and
subject to the terms and conditions hereof, at the Closing identified in Section
2 hereof, the Company shall issue to the Purchaser one or more Warrants to
purchase shares of Common Stock on the following terms:

<PAGE>

Warrant Coverage:             The Purchaser will be entitled to warrants to
                              purchase the same number of Shares (the "Purchased
                              Warrants"). The shares of Common Stock into which
                              the Warrants are exercisable (the "Warrant
                              Shares") will have piggyback registration rights
                              as provided in this Agreement.

Term:                         Each Purchased Warrant shall be exercisable for a
                              term of three-years from the Closing Date (as
                              defined below).

Exercise Price:               One third (1/3) of the Warrants will be
                              exercisable into 12,500 shares of Common Stock at
                              a price equal to $2.00 plus the Average Closing
                              Price (the "Series A Warrants"); one third (1/3)
                              of the Warrants will be exercisable into 12,500
                              shares of Common Stock at a price equal to $4.00
                              plus the Average Closing Price (the "Series B
                              Warrants"); and one third (1/3) of the Warrants
                              will be exercisable into 12,500 shares of Common
                              Stock at a price equal to $6.00 plus the Average
                              Closing Price (the "Series C Warrants").

          (c) Exemption. The purchase and sale of the Securities pursuant to the
terms hereof will be made in reliance upon the provisions of Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), Rule 506 of
Regulation D promulgated thereunder by the United States Securities and Exchange
Commission (the "SEC"), or such other exemptions from the registration
requirements of the Securities Act as may be available with respect to the
investment in the Securities to be made hereunder.

          2. Closings and Deliverables.

          (a) Payment. At the Closing, the Purchaser will make a wire transfer
payment to the Company, to the account set forth on Exhibit B hereto, in an
amount equal to the Purchase Price, which Purchase Price shall entitle the
Purchaser, subject to the satisfaction of the terms and conditions herein, to
receive the Shares and the Purchased Warrants. Together with the Purchase Price,
at the Closing, the Purchaser shall deliver to the Company a fully completed and
executed copy of the Investor Questionnaire, in the form attached as Exhibit C
hereto (the "Investor Questionnaire").

          (b) Closing. The closing of the purchase and sale of the Securities
shall take place at 12:00 p.m. (Eastern Standard Time) on the date hereof (the
"Closing Date"), at the offices of the Company (the "Closing").

          (c) Deliverables. At the Closing, or as soon as is reasonably
practicable thereafter, and assuming the Company has received the Purchase Price
and the Investor Questionnaire, the Company (or its transfer agent) shall
deliver to the Purchaser a stock certificate (or certificates) representing the
Shares so purchased at the Closing, as well as one or more Warrant Agreements
representing the Series A Warrants, Series B Warrants and Series C Warrants, in
each case registered in the name of the Purchaser, and such other documents and
certificates as are required by this Agreement at the Closing.

                                       2

<PAGE>

          3. Representations and Warranties by the Company. The Company hereby
represents and warrants to the Purchaser, as of the date hereof, as follows:

          (a) Incorporation and Qualification. The Company has been duly
organized and is validly existing as a Corporation and in good standing under
the laws of the State of Colorado with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.

          (b) Authority. The Company has the requisite corporate power and
authority to enter into this Agreement and to issue and deliver the Shares and
the Warrants and, upon exercise of the Warrants in accordance with the terms
thereof, the Warrant Shares. The execution and delivery of this Agreement and
the issuance and delivery of the Shares and the Warrants hereunder and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action by the Company. This Agreement has
been duly and validly executed and delivered by and on behalf of the Company and
constitutes a valid, legal and binding agreement, enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
general equitable principles, bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights generally.
Assuming payment of the Purchase Price in full at the Closing, the Shares and
the Warrants will be duly authorized, validly issued, fully paid and
non-assessable. Upon exercise of the Warrants in accordance with the terms
thereof, including payment of the exercise price in full, the Warrant Shares
will be duly authorized, validly issued, fully paid and non-assessable.

          (c) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the Offering do
not and will not: (i) conflict with or violate any provision of the Company's
articles of incorporation or bylaws, or (ii) subject to obtaining the Required
Approvals (as defined below), conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) to which the Company is a party or by which any property or asset of
the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority as currently in effect to which the Company
is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not, individually or in
the aggregate (x) adversely affect the legality, validity or enforceability of
the Offering, (y) have or result in a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company, taken as a whole (other than any change, effect, event or condition
that arises from changes in general economic conditions or conditions affecting
the industry of the business of the Company generally, or such changes, events
or conditions resulting directly from the announcement of or the consummation of
the Offering contemplated hereby), or (z) adversely impair the Company's ability
to perform fully on a timely basis its obligations under this Agreement (any of
(x), (y) or (z), a "Material Adverse Effect").

          (d) Capital Stock; Fully Paid and Non-Assessable.

                                       3
<PAGE>

               (i) As of the date hereof, the authorized capital stock of the
Company consists of 10,000,000 shares of preferred stock, no par value (the
"Preferred Stock"), of which there are no shares issued and outstanding, and
800,000,000 shares of Common Stock, of which 17,540,698 shares are issued and
outstanding, of which: (x) 1,000,000 shares are authorized for issuance under
the Company's stock option plans; (y) 1,557,500 shares are reserved for issuance
upon the exercise of options granted and issuable by the Company thereunder; and
(z) 2,868,491 shares are reserved for issuance upon the exercise of warrants to
purchase shares of Common Stock.

               (ii) All outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable and were
issued in compliance with all applicable Federal and state securities laws.
Except as contemplated by this Agreement or as set forth in all forms, reports
and documents filed with the SEC pursuant to the Securities Act and Securities
Exchange Act of 1934, as amended (the "Exchange Act") from January 1, 2003
through the date hereof (collectively, the "SEC Reports"), the Company has no
outstanding subscription, option, warrant, right of first refusal, preemptive
right, call, contract, demand, commitment, convertible security or other
instrument, agreement or arrangement of any character or nature whatever under
which the Company is or may be obligated to issue Common Stock or any other
equity security of any kind or which otherwise relates to the Company's
securities.

          (e) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person or entity in connection with the
execution, delivery and performance by the Company of this Agreement, other than
(i) the filing with the SEC of a Form D pursuant to Regulation D of the
Securities Act, and (iii) applicable state securities law Blue Sky filings
(collectively, the "Required Approvals").

          (f) SEC Reports; Financial Statements. Since January 1, 2003, the
Company has filed (i) all reports required to be filed by it under the
Securities Act; (ii) all annual reports on Form 10-K and all quarterly reports
on Form 10-Q required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, in order for it to satisfy its
filing requirements under the Exchange Act for the periods to which each such
report relates; (iii) an annual report on Form 10-K, covering the fiscal year
ended October 31, 2003, which was filed with the SEC on January 29, 2004; (iv) a
quarterly report on Form 10-Q, covering the fiscal quarter ended January 31,
2004, which was filed with the SEC on March 15, 2004; and (v) a quarterly report
on Form 10-Q, covering the fiscal quarter ended April 30, 2004, which was filed
with the SEC on June 2, 2004; (the foregoing materials, as amended, where
applicable, being collectively referred to herein as the "SEC Reports"). As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and to the Knowledge (as defined
below) of the Company, none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material

                                       4
<PAGE>

respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

          (g) No Legal Proceedings. Except as may be described in the SEC
Filings, there is no action, suit or proceeding before or by any court or any
governmental agency or body, domestic or foreign, now pending or, to the actual
knowledge (without the need for inquiry or special investigation) of the Chief
Financial Officer, Chief Operating Officer or Chief Executive Officer of the
Company ("Knowledge"), threatened against or affecting the Company, or any of
its properties or assets, which is reasonably likely to have a Material Adverse
Effect.

          4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company, as of the date hereof, as follows:

          (a) Power. The Purchaser has been duly organized, is validly existing
and is in good standing under the laws of its state of incorporation, with all
limited liability company power and authority to execute, deliver and perform
its obligations under the Agreement.

          (b) Authority. The Purchaser has the requisite power and authority to
enter into this Agreement and to purchase the Shares and the Warrants and, upon
exercise of the Warrants in accordance with the terms thereof, the Warrant
Shares. The execution and delivery of this Agreement and the purchase of the
Shares and the Warrants hereunder and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action by the Purchaser. This Agreement has been duly and validly executed and
delivered by or on behalf of the Purchaser and constitutes a valid, legal and
binding agreement, enforceable against the Purchaser in accordance with its
terms, except as enforceability may be limited by general equitable principles,
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws affecting creditors' rights generally.

          (c) No Conflicts. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the purchase
of the Securities do not and will not: (i) conflict with or violate any
provision of the Purchaser's organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) to which the Purchaser is a
party or by which any property or asset of the Purchaser is bound or affected,
or (iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
as currently in effect to which the Purchaser is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Purchaser is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not, individually or in the aggregate result in a Material
Adverse Effect.

                                       5

<PAGE>

          (d) Investment in Securities. The Purchaser represents and warrants
to, and covenants with, the Company that: (i) the Purchaser, either
individually, or together with a purchaser representative, is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in shares representing an investment decision like
that involved in the purchase of the Securities, including investments in
securities issued by the Company and comparable entities, and has requested,
received, reviewed and considered all information it deems relevant in making an
informed decision to purchase the Securities; (ii) the Purchaser is acquiring
the Securities in the ordinary course of its business and for its own account
for investment only and with no present intention or view toward the public sale
or distribution thereof, and no arrangement or understanding exists with any
other persons regarding the public sale or distribution of any Securities; (iii)
the Purchaser will not, directly or indirectly, except in compliance with the
Securities Act, the rules and regulations promulgated thereunder and such other
securities or blue sky laws as may be applicable, offer, sell, pledge, transfer
or otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Securities or engage in any Short Sale
(as defined below); (iv) the Purchaser has completed or caused to be completed
the Investor Questionnaire and the answers thereto are true and correct in all
respects as of the date hereof; (v) the Purchaser has, in connection with its
decision to purchase the Securities, relied solely upon its own independent
investigation of the Company and the representations and warranties of the
Company contained herein; and (vi) the Purchaser is an "accredited investor"
within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act.

          (e) Short Sales. Neither the Purchaser nor any affiliate of the
Purchaser (as defined in Rule 405 of the Securities Act (each a
"Purchaser/Affiliate") and which (i) had knowledge about the transactions
contemplated hereby, (ii) has or shares discretion relating to the Purchaser's
investments or trading or information concerning Purchaser's investments,
including the Units, or (iii) is subject to the Purchaser's review or input
concerning such Purchaser/Affiliate's investments or trading) has or will,
directly or indirectly, engage (A) in any "short sale" (as defined in Rule 3b-3
promulgated under the Exchange Act), including, without limitation, the
maintaining of any short position with respect to, establishing or maintaining a
"put equivalent position" (within the meaning of Rule 16a-1(h) under the
Exchange Act) with respect to, entering into any swap, derivative transaction or
other arrangement (whether any such transaction is to be settled by delivery of
Common Stock, other securities, cash or other consideration) that transfers to
another, in whole or in part, any of the economic consequences of ownership, or
otherwise dispose of, any of the Securities by the Purchaser or (B) in any
hedging transaction which establishes a net short position with respect to the
Securities (clauses (A) and (B) together, a "Short Sale"); except for (1) Short
Sales by a Purchaser/Affiliate which was, prior to the date on which the
Purchaser was first notified that the Company intended to engage in the
transactions contemplated by this Agreement, a market maker for the Common
Stock, provided that such Short Sales are in the ordinary course of such
Purchaser/Affiliate's business and are in compliance with the Securities Act,
and the rules and regulations promulgated thereunder, and such other securities
or blue sky laws as may be applicable or (2) Short Sales by a
Purchaser/Affiliate which by virtue of the procedures of the Purchaser are made
without knowledge of the transactions contemplated in this Agreement and were
not induced or encouraged by the Purchaser).

                                       6
<PAGE>

          (f) Exemptions. The Purchaser understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of Securities Act, the rules and regulations and state
securities laws, and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities.

          (g) Use of Information. The Purchaser acknowledges that it is
prohibited from and has not reproduced or distributed this Agreement or any
other offering materials or other information provided by the Company in
connection with the Purchaser's consideration of its investment in the Company,
in whole or in part, or divulged or discussed any of their contents except to
its advisors and representatives for the purpose of evaluating such investment.
The foregoing shall not apply to any information that is or becomes publicly
available through no fault of the Purchaser, or that the Purchaser is legally
required to disclose; provided, however, that if the Purchaser is requested or
ordered to disclose any such information pursuant to any court or other
government order or any other applicable legal procedure, it shall provide the
Company with prompt notice of any such request or order in time sufficient to
enable the Company to seek an appropriate protective order and shall provide the
Company with reasonable assistance in obtaining such protective order.

          (h) Investment Risk. The Purchaser understands that its investment in
the Securities involves a significant degree of risk and that the market price
of the Common Stock has been and continues to be volatile, that no
representation is being made as to the future value of the Common Stock and that
the Purchaser has carefully read and considered the matters set forth in the SEC
Reports. The Purchaser has the knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities and has the ability to bear the economic risks of
an investment in the Securities. The Purchaser has had a reasonable opportunity
to ask questions of the Company and its representatives; and the Company has
answered all inquiries that the Purchaser or the Purchaser's representatives
have put to it, and all such inquiries have been answered to the full
satisfaction of the Purchaser.

          (i) Reliance. The Purchaser is not relying on the Company or any of
its employees or agents with respect to the legal, tax, economic and related
considerations as to an investment in the Securities, and the Purchaser has
relied on the advice of, or has consulted with, only his own advisors as it
deems necessary or advisable.

          (j) No General Solicitation. The Purchaser is unaware of, is in no way
relying on, and did not become aware of the offering of the Securities through
or as a result of, any form of general solicitation or general advertising
including, without limitation, any article, notice, advertisement or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, in connection with the offering and sale of the
Securities and is not subscribing for Securities and did not become aware of the
Offering through or as a result of any seminar or meeting to which the Purchaser
was invited by, or any solicitation of a subscription by, a person not
previously known to the Purchaser in connection with investments in securities
generally.

                                       7

<PAGE>

          (k) No Endorsement of Securities. The Purchaser understands that no
United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities.

          (l) No Registration of Securities. The Purchaser understands that the
Securities and the Warrant Shares have not been registered under the Securities
Act and will not sell, offer to sell, assign, pledge, hypothecate or otherwise
transfer any of the Securities or Warrant Shares unless (i) pursuant to an
effective registration statement under the Securities Act, (ii) the Purchaser
provides the Company with an opinion of counsel, in a generally acceptable form,
to the effect that a sale, assignment or transfer of the Securities may be made
without registration under the Securities Act and the transferee agrees to be
bound by the terms and conditions of this Agreement, (iii) the Purchaser
provides the Company with evidence of compliance with Rule 144 promulgated under
the Securities Act ("Rule 144"), including reasonable assurances (in the form of
seller and broker representation letters) that the Securities and Warrant Shares
can be sold pursuant to Rule 144 or (iv) pursuant to Rule 144(k) following the
applicable holding period.

          (m) Legend. The Purchaser understands that, until such time as a
registration statement has been declared effective or the Securities and Warrant
Shares may be sold by non-affiliates of the Company pursuant to Rule 144 under
the Securities Act without any restriction as to the number of securities as of
a particular date that can then be immediately sold, the certificates for the
Securities and Warrant Shares shall bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of
the certificates for the Securities and Warrant Shares):

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY OTHER
         JURISDICTION. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
         IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
         SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
         LAWS, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY
         ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE
         SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
         PURSUANT TO RULE 144 UNDER THE SECURITIES ACT."

          (l) Executive Offices. The Purchaser's principal executive offices are
located in the State of Connecticut.

          (m) Brokers and Finders. There is no investment banker, broker, finder
or other intermediary (other than any placement agent retained by the Company)
which has been retained by or is authorized to act on behalf of the Purchaser
who might be entitled to any fee or commission from the Purchaser, the Company,
any of their respective Affiliates upon consummation of the transactions
contemplated by this Agreement.

                                       8
<PAGE>

          5. Certain Covenants.

          (a) Delisting. In the event that the Company is no longer subject to
the reporting requirements of the Exchange Act, the Company hereby covenants and
agrees with the Purchaser that, so long as the Purchaser owns at least ten
percent (10%) of the issued and outstanding shares of Common Stock, except as
otherwise required in this Agreement, the Company shall provide the Purchaser
with customary and reasonable financial information on at least a quarterly
basis and such other information rights as provided to an investor in a
privately held corporation.

          (b) Confidentiality. The Purchaser covenants and agrees to keep
confidential any and all material non-public information which it has heretofore
obtained or shall hereafter obtain, directly or indirectly, from the Company
pursuant to this Agreement or otherwise, and agrees that it has not: (i) used
the same except for the purpose of determining whether to purchase the
Securities in the Offering; or (ii) disclosed the same to any party except as
provided below, without the Company's prior written consent; provided that the
terms of this Section 5(b) shall not extend to any such information that: (A) is
already publicly known; (B) has become publicly known without any fault of the
Purchaser or anyone to whom the Purchaser has made disclosure in compliance with
the terms of this Section 5(b); or (C) is required to be disclosed to any
governmental authorities or courts of law as a result of operation of law,
regulation, or court order; provided, however, that the Purchaser shall have
first given prompt written notice of such requirement to the Company (if
permissible) and cooperates with the Company to restrict such disclosure and/or
obtain confidential treatment thereof.

          (c) Short-Selling. The Purchaser covenants and agrees that it will
not, and shall cause each Purchaser/Affiliate not to, engage in any Short Sales.

          6. Registration Rights.

          (a) Defined Terms. The following capitalized terms, when used in this
Section 6, have the respective meanings set forth below:

                                       9
<PAGE>

          "Affiliate" means, with respect to any Person (as defined below), any
other Person, directly or indirectly, controlling, controlled by, or under
common control with, such Person, and shall include (i) any Person who is an
executive officer, director or beneficial holder of at least 10% of the
outstanding capital stock of the Company (or other specified Person), (ii) any
Person of which the Company (or other specified Person) or an Affiliate of the
Company (or other specified Person) shall, directly or indirectly, either
beneficially own at least 10% of the outstanding equity securities or constitute
at least a 10% participant, and (iii) in the case of a specified Person who is
an individual, each parent, spouse, child, brother, sister or the spouse of a
child, brother or sister of such Person, and each trust or family limited
partnership created for the benefit of one or more of such Persons. For the
purposes of this definition, "control" when used with respect to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Notwithstanding the foregoing, the term "Affiliate" as used elsewhere in this
Agreement shall have the same meaning as given to such term in this Section
6(a).

          "Business Day" means any day, other than a Saturday or a Sunday, that
is neither a legal holiday nor a day on which banking institutions are generally
authorized or required by law or regulation to close in the State of
Connecticut.

          "Holder" shall mean any Person that owns Registrable Securities,
including such successors and assigns as acquire Registrable Securities,
directly or indirectly, from such Person. For purposes of this Agreement, the
Company may deem the registered holder of a Registrable Security as the Holder
thereof.

          "Other Approved Holders" shall mean holders of Common Stock having
registration rights with respect to the Common Stock, other than pursuant to the
terms of this Agreement.

          "Person" means any individual, company, corporation, partnership,
limited liability company, trust, division, governmental, quasi-governmental or
regulatory entity or authority or other entity. Notwithstanding the foregoing,
the term "Person" as used elsewhere in this Agreement shall have the same
meaning as given to such term in this Section 6(a).

          "Prospectus" shall mean the prospectus (including a preliminary
prospectus) included in any Registration Statement, as amended or supplemented
by a prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement and
by all other amendments and supplements to the prospectus, including
post-effective amendments and all material incorporated by reference in such
prospectus.

                                       10
<PAGE>

          "Registrable Securities" shall mean the Shares, the Warrant Shares and
any other capital stock or other securities issued or issuable as a result of or
in connection with any stock dividend, stock split or reverse stock split,
combination, recapitalization, reclassification, merger or consolidation,
exchange, distribution or similar transaction in respect of the Shares or the
Warrant Shares.

          "Registration Statement" shall mean any registration statement which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.

          "Rule 144" shall mean Rule 144 promulgated under the Securities Act,
as amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

          "Rule 144A" shall mean Rule 144A promulgated under the Securities Act,
as amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

          (b) Piggyback Registration Rights.

               (i) Whenever the Company proposes to register any of its
securities under the Securities Act, either pursuant to an underwritten primary
registration on behalf of the Company or pursuant to an underwritten secondary
registration on behalf of a holder or holders of the Company's securities (other
than on Form S-4, Form S-8 or any successor form) and the registration form to
be used may be used for the registration of any Registrable Securities (a
"Piggyback Registration"), the Company will give written notice to each holder
of Registrable Securities of its intention to effect such a registration and
will include in such registration all Registrable Securities (subject to, and in
accordance with, the priorities set forth in Section 6(b)(ii) hereof), with
respect to which the Company has received written requests for inclusion within
ten (10) days after delivery of the Company's notice to each holder of
Registrable Securities.

               (ii) If the managing underwriter(s) advise the Company in
writing, or the Board of Directors determines, that in their opinion, the number
of Registrable Securities requested to be included in such registration exceeds
the number which can be sold in such offering without adversely affecting the
marketability or pricing thereof, the Company will include in such registration
up to an aggregate amount determined advisable by such underwriter(s): (i)
first, any shares of Common Stock that the Company desires to register; (ii)
second, any shares of Common Stock requested to be registered by the holder(s)
of Common Stock pursuant to which the Registration Statement is being filed and
to which the holders of Registrable Securities hereunder are receiving Piggyback
Registration; and (iii) pro rata among the holders of Registrable Securities on
the basis of the number of Registrable Securities which are requested to be
registered hereunder.

                                       11
<PAGE>

               (iii) Notwithstanding anything herein to the contrary, the
Company may withdraw any registration statement referred to in this Section 6(b)
at any time in its sole discretion without thereby incurring any liability or
expense to the holders of Registrable Securities.

          (c) Registration Procedures. In connection with the Company's
registration obligations pursuant to Sections 6(b) hereof, the Company will use
its commercially reasonable efforts to:

               (i) register or qualify such Registrable Securities under the
securities or blue sky laws of the jurisdictions as any seller reasonably
requests in writing and do any and all other acts and things which may be
reasonably necessary to permit such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller (provided that
the Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph or (B) consent to general service of process in any such
jurisdiction);

               (ii) notify each seller of Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will prepare
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
any untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;

               (iii) cause all such Registrable Securities to be listed on each
securities exchange, if any, on which the same securities issued by the Company
are then listed;

               (iv) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement; and

               (v) advise each seller of such Registrable Securities promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for such purpose
and use commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be issued.

          (d) Material Development Election.

               (i) Subject to Section 6(d)(ii) below, the Company shall be
entitled, for a period of time not to exceed thirty consecutive (30) days (a
"Suspension Period"), to postpone the filing of any Registration Statement
otherwise required to be filed by it pursuant to Section 6(b) and/or request
that the Holders refrain from effecting any public sales or distributions of
their Registrable Securities if the Company's Board of Directors shall have
reasonably determined in good faith and in its reasonable business judgment that

                                       12

<PAGE>

such registration would interfere in any material respect with any financing
(other than an underwritten secondary offering of any securities of the
Company), acquisition, corporate reorganization or other transaction or
development involving the Company or any subsidiary of the Company that in the
reasonable good faith business judgment of such board is a transaction or
development that is or would be material to the Company (a "Material Development
Election").

               (ii) The Board of Directors shall, as promptly as practicable,
give the Holders written notice of any such Material Development Election. In
the event of a determination by the Board of Directors to postpone the filing of
a Registration Statement required to be filed pursuant to Section 6(b) hereof,
the Company shall be required to file such Registration Statement as soon as
practicable after the Board of Directors of the Company shall determine, in its
reasonable business judgment, that the filing of such Registration Statement and
the offering thereunder will not interfere with the aforesaid material
transaction or development, but in any event no later than the end of such
Suspension Period. In addition, if the Board of Directors of the Company has
requested that the Holders refrain from making public sales or distributions of
their Registrable Securities, such board shall, as promptly as practicable
following its determination that the Holders may recommence such public sales
and distributions, notify such Holders in writing of such determination (but in
any event no later than the end of such Suspension Period). In the event the
Company shall exercise a Material Development Election during a period when a
Registration Statement filed pursuant to Section 6(b) hereof is effective, the
time period specified in Section 6(b) hereof during which such Registration
Statement is required to be kept effective shall be extended by the number of
days during which the Holders are prohibited by the Company from publicly
selling or distributing their securities.

               (iii) The Purchaser agrees that, upon receipt of any notice from
the Company of a Suspension Period, the Purchaser shall forthwith discontinue
disposition of shares of Common Stock covered by such Registration Statement or
Prospectus until such Purchaser (A) is notified in writing by the Company that
the use of the applicable prospectus may be resumed, (B) has received copies of
a supplemental or amended prospectus, if applicable, and (C) has received copies
of any additional or supplemental filings which are incorporated or deemed to be
incorporated by reference into such prospectus.

               (iv) Notwithstanding the foregoing, no more than one Suspension
Period may occur during any twelve-month period, unless approved by a
majority-in-interest of the then outstanding Holders (on a common equivalent
basis). The Company shall use its best efforts to limit the duration and
aggregate number of any Suspension Periods.

                                       13
<PAGE>

          (e) Registration Expenses. All expenses incident to the Company's
performance of or compliance with Section 6 of this Agreement, including all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications or registrations (or the obtaining of
exemptions therefrom) of the Registrable Securities), printing expenses
(including expenses of printing Prospectuses), messenger and delivery expenses,
internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties), fees and disbursements of its
counsel and its independent certified public accountants, securities acts
liability insurance (if the Company elects to obtain such insurance), fees and
expenses of any special experts retained by the Company in connection with any
registration hereunder, fees and expenses of other Persons retained by the
Company, (all such expenses being referred to as "Registration Expenses"), shall
be borne by the Company, whether or not any registration statement becomes
effective; provided that Registration Expenses shall not include any
underwriting discounts, commissions or fees attributable to the sale of the
Registrable Securities.

          (f) Registration Rights Indemnification.

               (i) Indemnification by the Company.

                    (1) The Company will indemnify and hold harmless, to the
          fullest extent permitted by law, but without duplication, each Holder,
          including any managed or advised accounts and any investment advisor
          or agent therefore, officers, directors, employees, partners,
          representatives and agents, and each Person who controls such Holder
          or such other Persons (within the meaning of the Securities Act) (for
          purposes of this Section 6(f)(i), a "Holder Indemnified Person"), from
          and against, and will reimburse such Holder Indemnified Person with
          respect to, any and all claims, actions, demands, losses, damages,
          liabilities, costs and expenses (including reasonable costs of
          investigation and reasonable legal fees and expenses) ("Indemnifiable
          Costs and Expenses") to which such Holder Indemnified Person may
          become subject under the Securities Act or otherwise and arise out of
          or are based upon (A) violation of securities laws or (B) any untrue
          statement or alleged untrue statement of any material fact contained
          in, or any omission or alleged omission to state therein a material
          fact required to be stated in, any such Registration Statement, any
          Prospectus contained therein or any amendment or supplement thereto or
          necessary to make the statements contained therein, in light of the
          circumstances under which they were made, not misleading; provided,
          however, that the Company will not be liable in any such case to the
          extent that any costs or expense covered by the preceding clauses (A)
          or (B) arises out of or results from any untrue or alleged untrue
          statement of any material fact contained in such Registration
          Statement, any Prospectus contained therein or any amendment or
          supplement thereto or any omission or alleged omission to state
          therein a material fact required to be stated therein or necessary to
          make the statements therein, in light of the circumstances in which
          they were made, not misleading, in each case to the extent, but only
          to the extent, that such untrue statement or alleged untrue statement
          or omission or alleged omission was so made solely in reliance upon
          and in substantial conformity with written information furnished by
          such Holder Indemnified Person specifically for use in the preparation
          of any such Registration Statement, Prospectus or amendment or
          supplement thereto.

                                       14
<PAGE>

                    (2) The Company further agrees promptly upon demand by each
          Holder Indemnified Person to reimburse each Holder Indemnified Person
          for any Holder Indemnifiable Costs and Expenses as they are incurred
          by it; provided that if the Company reimburses a Holder Indemnified
          Person hereunder for any expenses incurred in connection with a
          lawsuit, claim, inquiry or other proceeding or investigation for which
          indemnification is sought, such Holder Indemnified Person agrees to
          refund such reimbursement of Holder Indemnifiable Costs and Expenses
          to the extent it is finally judicially determined that the indemnity
          provided for in this Section 6(f)(i) is not applicable to, or the
          Company is not otherwise obligated to pay, such Holder Indemnified
          Person in accordance with the terms hereof or otherwise. The
          indemnity, contribution and expense reimbursement obligation of the
          Company under this Section 6(f)(i) shall be in addition to any
          liability it may otherwise have. The obligations of the Company
          hereunder shall survive the Closing and the termination of any
          Registration Statement under which any Registrable Securities were
          registered the termination of this Agreement and shall not be
          extinguished with respect to any Person because any other Person is
          not entitled to indemnity or contribution hereunder.

               (ii) Indemnification by Holders of Registrable Securities. Each
Holder whose Registrable Securities are included in a Registration Statement
pursuant to the provisions of this Section 6 will indemnify and hold harmless
the Company and its officers, directors, employees, partners, stockholders,
agents, representatives, and any Person who controls the Company or any of its
subsidiaries or Affiliates (within the meaning of the Securities Act) (each, a
"Company Indemnified Person"), from and against, and will reimburse such Company
Indemnified Person with respect to, any and all Indemnifiable Costs and Expenses
to which the Company or such Company Indemnified Person may become subject under
the Securities Act or otherwise and which arise out of or result from any untrue
or alleged untrue statement of any material fact contained in such Registration
Statement, any Prospectus contained therein or any amendment or supplement
thereto, or any omission or the alleged omission to state therein any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
omission or alleged untrue statement or alleged omission was so made solely in
reliance upon and in substantial conformity with written information furnished
by such Holder specifically for use in the preparation thereof; provided,
however, that the liability of any Holder pursuant to this subsection (ii) shall
be limited to an amount not to exceed the net proceeds received by such Holder
pursuant to the Registration Statement which gives rise to such obligation to
indemnify.

               (iii) Conduct of Indemnification Proceedings; Contribution.

                    (1) Each indemnifying party and indemnified party under this
          Section 6(f) shall comply with the procedures set forth in Section
          7(a)(iii) with respect to any indemnity sought pursuant to this
          Section 6(f).

                    (2) Each indemnifying party and indemnified party under this
          Section 6(f) also agrees to comply with the provisions in Section
          7(a)(iv) as they relate to contribution.

                                       15
<PAGE>

          (g) Reporting Requirements Under the Exchange Act. The Company shall
use its commercially reasonable efforts to make publicly available and available
to the Holders, pursuant to Rule 144, such information as is necessary to enable
the Holders to make sales of Registrable Securities pursuant to that Rule. The
Company shall use its commercially reasonable efforts to file timely with the
SEC all documents and reports required of the Company under the Exchange Act.
The Company shall furnish to any Holder, upon request, a written statement
executed on behalf of the Company as to compliance with the current public
information requirements of Rule 144. In addition, the Company will provide to
any Holder of a Registrable Security, or any potential purchaser of a
Registrable Security, upon any such Person's reasonable request, the information
required by paragraph (d)(4) of Rule 144A.

          (h) Stockholder Information. The Company may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such seller and the distribution of
such securities as the Company or the Managing Underwriter may from time to time
reasonably request in writing.

          7. Miscellaneous.

          (a) Indemnification. In addition, to any indemnification provided
elsewhere in this Agreement, the parties hereto agree as follows:

               (i) Company Indemnification.

                           (1) The Company will indemnify and hold harmless, to
         the fullest extent permitted by law, but without duplication, the
         Purchaser, including any managed or advised accounts and any investment
         advisor or agent therefor, and their respective, officers, directors,
         employees, partners, representatives, agents, and each Person who
         controls the Company and each of its Affiliates within the meaning of
         the Securities Act) (each of the foregoing Persons being a "Purchaser
         Indemnified Person"), from and against any and all Indemnifiable Costs
         and Expenses to which such Purchaser Indemnified Person may become
         subject under the Securities Act or otherwise arising out of or based
         in any manner upon any breach by the Company of any its
         representations, warranties or covenants contained in the Agreement or
         in any agreement, instrument or document delivered by the Company
         hereunder.

                            (2) The obligations of the Company hereunder shall
         survive the Closing and any repurchase, conversion, exchange or
         transfer of the Shares, the Warrants and the Warrant Shares and the
         termination of this Agreement and shall not be extinguished with
         respect to any Person because any other Person is not entitled to
         indemnity or contribution hereunder.

               (ii) Purchaser Indemnification. The Purchaser agrees and
covenants to hold harmless and indemnify each Company Indemnified Person, from
and against any and all Indemnifiable Costs and Expenses to which such Company
Indemnified Person may become subject under the Securities Act or otherwise
which arises out of or is based in any manner upon any breach by the Purchaser
of any its representations, warranties or covenants contained in the Agreement
or in any agreement, instrument or document delivered by the Purchaser
hereunder.

                                       16
<PAGE>

               (iii) Conduct of Indemnification Proceedings. Promptly after
receipt by a party indemnified pursuant to the provisions of paragraph (i) or
(ii) of this Section 7(a) or paragraph (i) or (ii) of Section 6(f) of notice of
the commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of paragraph (i)
or (ii) of this Section 7(a) or paragraph (i) or (ii) of Section 6(f), notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to an indemnified party otherwise than under paragraph (i) or (ii) of
this Section 7(a) or paragraph (i) or (ii) of Section 6(f), and shall not
relieve the indemnifying party from liability under this Section 7(a) or Section
6(f) unless such indemnifying party is materially prejudiced by such omission.
In case such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of such paragraph
(i) or (ii) of this Section 7(a) or paragraph (i) or (ii) of Section 6(f) for
any legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable to an indemnified party for
any settlement of any action or claim without the consent of the indemnifying
party. No indemnifying party will consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation and no settlement can have
non-monetary remedies.

                                       17
<PAGE>

               (iv) Contribution. If the indemnification provided for in
subsection (i) or (ii) of this Section 7(a) or in subsection (i) or (ii) of
Section 6(f) is held by a court of competent jurisdiction to be unavailable to a
party to be indemnified with respect to any Indemnifiable Costs and Expenses,
then each indemnifying party under any such subsection, in lieu of indemnifying
such indemnified party thereunder, hereby agrees to contribute to the amount
paid or payable by such indemnified party as a result of Indemnifiable Costs and
Expenses, in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions, acts, facts matters or
circumstances which resulted in such Indemnifiable Costs and Expenses, as well
as any other relevant equitable considerations. To the extent applicable to
Section 6(f) hereof, the relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution hereunder from any Person who was not guilty
of such fraudulent misrepresentation.

          (b) Entire Agreement; Survival of Provisions. This Agreement
constitutes the entire agreement of the parties with respect to the transactions
contemplated hereby and supersedes all prior agreements and understandings with
respect thereto, whether written or oral. All of the covenants of the parties
made herein shall remain operative and in full force and effect pursuant to
their respective terms regardless of acceptance of the Securities and the
Warrant Shares, and payment therefor. The representations and warranties set
forth herein shall survive the execution and delivery of this Agreement until
the first anniversary of the date hereof (the "Expiration Date"), and shall in
no way be affected by any investigation of the subject matter thereof made by or
on behalf of the Purchaser or the Company. Notwithstanding the preceding
sentence, any representation or warranty in respect of which an indemnity may be
sought hereof shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence, if a claim for indemnification shall have
been given to the party against whom such indemnity may be sought prior to the
Expiration Date. The representations, warranties, agreements and covenants made
in the Agreement shall be deemed to have been relied upon by the parties hereto.

          (c) No Waiver; Modifications in Writing. No failure or delay by a
party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. Except as otherwise expressly provided
herein with respect to any right of indemnification, the remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise. No waiver of or consent
to any departure by a party from any provision of this Agreement shall be
effective unless signed in writing by the parties entitled to the benefit
thereof. No amendment, modification or termination of any provision of this
Agreement shall be effective unless signed in writing by all parties. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
from the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which made or given.

                                       18
<PAGE>

          (d) Notices. All notices, demands and other communications provided
for hereunder shall be in writing, shall be given by registered or certified
mail, return receipt requested, on the date sent by telecopy with electronic
confirmation of such transmission, the business day next following deposit with
a courier service for overnight delivery with written confirmation of such
delivery or upon personal delivery, addressed to the parties, as follows:

                      If to the Company, to:

                           Startech Environmental Corporation
                           15 Old Danbury Road, Suite 203
                           Wilton, Connecticut 06897-2525
                           Attention:  Chief Financial Officer
                           Fax:  (203) 762-2499

                         with a copy to:

                           Kramer Levin Naftalis & Frankel LLP
                           919 Third Avenue
                           New York, New York 10022
                           Attention: Scott S. Rosenblum Esq.
                           Fax: (212) 715-8000

                      If to the Purchaser, to:

                           Nutmeg Environmental, L.P.
                           1320 Tower Road
                           Schaumburg, Il. 60173
                           Attention: Stephen Jouzapaitis
                           Fax: (847) 290-9601

                         with a copy to:

                           Randall S. Goulding, Esq.
                           3346 Commercial
                           Northbrook, IL 60062
                           Attention: Randi White
                           Fax: (847) 291-7733

or to such other address as any party shall designate in writing in compliance
with the provisions of this Section 7(d).

          (e) Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.

                                       19
<PAGE>

          (f) Binding Effect; Assignment. The rights and obligations of the
parties under this Agreement may not be assigned or otherwise transferred to any
other person, without the prior written consent of the other party hereto;
provided that a Purchaser may assign or otherwise transfer the Shares to any of
its Affiliates without obtaining any such consent, but only if such Affiliate:
(i) agrees to be bound by the terms of this Agreement; (ii) is, at the time of
such transfer, an "accredited Investor" and provides a fully completed Investor
Questionnaire and such other written certification as the Company may reasonably
require as to the transferee's status as an "accredited investor"; and (iii)
such transfer to any such transferee does not violate federal or state
securities laws and counsel for transferee, at the Company's request, provides
and opinion of counsel as to the same. Except as expressly provided in this
Agreement, this Agreement shall not be construed so as to confer any right or
benefit upon any person other than the parties to this Agreement, their
respective permitted heirs, representatives, executors, successors and assigns,
each Company Indemnified Person and each Purchaser Indemnified Person. This
Agreement shall be binding upon and shall inure to the benefit of the Company,
the Purchaser and their respective permitted heirs, representatives, executors,
successors and assigns.

          (g) Governing Law. This Agreement shall be deemed to be a contract
made under and shall be governed by and construed in accordance with the
internal laws of the State of Connecticut without reference to the principles of
conflict of laws.

          (h) Consent to Jurisdiction and Service of Process. Any suit, action
or proceeding arising out of or relating to the Agreement or the transactions
contemplated hereby may be instituted in any Federal court situated in the State
of Connecticut or any state court of the State of Connecticut, and each party
agrees not to assert, by way of motion, as a defense or otherwise, in any such
suit, action or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that the Agreement or the subject matter hereof or thereof may not be
enforced in or by such court. Each party further irrevocably submits to the
jurisdiction of such court in any such suit, action or proceeding. Any and all
service of process and any other notice in any such suit, action or proceeding
shall be effective against any party if given personally or by registered or
certified mail, return receipt requested if sent to such party at the address
for such party set forth in Section 7(d) hereof, or by any other means of mail
that requires a signed receipt, postage fully prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.

          (i) Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereto waive any
provision of law that renders any such provision prohibited or unenforceable in
any respect.

          (j) Headings. The Article, Section and subsection headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.

                                       20
<PAGE>

          (k) Expenses. Each party shall bear its own fees, costs and expenses
in connection with the execution, delivery and performance of the Agreement.

          (l) Waiver of Jury Trial. TO THE EXTENT THEY MAY LEGALLY DO SO, THE
PARTIES HERETO EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION, CAUSE OF ACTION OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
AGREEMENT OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. TO
THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO AGREE THAT ANY SUCH CLAIM,
DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION 7(m) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY
JURY.

          (m) Publicity. The parties agree that no public release or
announcement concerning the Agreement or the transactions contemplated hereby
shall be made without advance review and approval by each party hereto, except
as otherwise required by applicable law, and which review and approval shall not
be unreasonably withheld or delayed.

          (n) Enforcement. The Purchaser acknowledges that the Company will be
irreparably damaged if the provisions of this Agreement applicable to the
Purchaser are not specifically enforced. If the Purchaser shall default in any
of its obligations under this Agreement or if any representation or warranty
made by or on behalf of the Purchaser in this Agreement or in any certificate,
report or other instrument delivered under or pursuant to any term hereof or
thereof shall be untrue or misleading as of the date made, the Company may
proceed to protect and enforce its rights by suit in equity or action at law
(without the posting of any bond and without proving that damages would be
inadequate), whether for the specific performance of any term contained in this
Agreement, injunction against the breach of any such term or in furtherance of
the exercise of any power granted in this Agreement, or to enforce any other
legal or equitable right of the Company or to take any one of more of such
actions. The Company shall be permitted to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof or any
other court having jurisdiction, this being in addition to any other remedy to
which the Company may be entitled at law or in equity or otherwise.

          (o) Further Assurances. Each party shall execute and deliver such
documents, instruments and agreements and take such further actions as may be
reasonably required or desirable to carry out the provisions of this Agreement
and the transactions contemplated hereby, and each of the parties hereto shall
cooperate with each other in connection with the foregoing.

                                       21
<PAGE>

          (p) Broker's Fee. The Purchaser acknowledges that the Company may pay
a fee to one or more placement agents in respect of the sale of the Securities
to the Purchaser. The Purchaser and the Company hereby agree that the Purchaser
shall not be responsible for such fee and that the Company will indemnify and
hold harmless the Purchaser and each Purchaser/Affiliate against any losses,
claims, damages, liabilities or expenses, joint or several, to which the
Purchaser or Purchaser/Affiliate may become subject with respect to such fee.
Each of the parties hereto hereby represents that, on the basis of any actions
and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Securities to the Purchaser.

          (q) Force Majeure. Neither party shall be deemed in default of any
provision of this Agreement (other than provisions regarding confidentiality),
to the extent that performance of its obligations or attempts to cure a breach
are materially delayed or prevented by any event reasonably beyond the control
of such party, including, without limitation, war, hostilities, acts of
terrorism, revolution, riot, civil commotion, national emergency, strike,
lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of
nature, explosion, embargo, or any other Act of God, or any law, proclamation,
regulation, ordinance, or other act or order of any court, government or
governmental agency, provided that such party gives the other party written
notice thereof promptly upon discovery thereof and uses reasonable efforts to
cure or mitigate the delay or failure to perform

                            [SIGNATURE PAGE FOLLOWS]

                                       22
<PAGE>

 .
                                 SIGNATURE PAGE

          IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
\
                                     -------------------------------------------

                                     By:
                                        ----------------------------------------
                                        Name:  Stephen Jouzapaitis
                                        Title: President and General Partner
                                     Federal Taxpayer Identification Number:
                                                     04-3784346

                       STARTECH ENVIRONMENTAL CORPORATION

                                     By:
                                          --------------------------------------
                                          Name:
                                         Title:

<PAGE>

                                    EXHIBIT A

                            FORM OF WARRANT AGREEMENT

<PAGE>

                                    EXHIBIT B

                           WIRE TRANSFER INSTRUCTIONS

Wire transfer information for:              Startech Environmental Corp.
                                            15 Old Danbury Road, Suite 203
                                            Wilton, Ct. 06897-2525

Financial Institution:                      Chase Manhattan Bank
                                            33 Old Ridgfield Road
                                            Wilton, CT 06897

Financial Institution Contact:              Branch Manager
                                             (203) 762-3611
                                            FAX: (203) 762-2645

Accounting Number:                          699500462165

ABA/Routing Number:                         021000021

<PAGE>

                                    EXHIBIT C

                             INVESTOR QUESTIONNAIRE

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