Document:

EXHIBIT 10.15

DOE F 4600.1#
(08/93)                      SECTION I - FACE PAGE
         FACE PAGE DOE FORM 4600.1 NOTICE OF FINANCIAL ASSISTANCE AWARD
         --------------------------------------------------------------
                           U.S. DEPARTMENT OF ENERGY
                      NOTICE OF FINANCIAL ASSISTANCE AWARE
Under the authority of Public Law 95-91 DOE Organization Act, and P.L. 95-224
Federal Grant and Cooperative Agreement Act as amended by P.L. 97-258 and
subject to legislation, regulations and policies applicable to (cite legislative
Program Title):_________________________________________________________________

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1.  PROJECT TITLE Evaluation of Sorbent Injection for Mercury Control
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2.  INSTRUMENT TYPE
        [ ] GRANT                               [X]  COOPERATIVE AGREEMENT
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3.  RECIPIENT (Name, address, zip code, area code, telephone no.)
        ADA Environmental Solutions
        8100 SouthPark Way, Unit B
        Littleton, CO 80120
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4.  INSTRUMENT NO.
        DE-FC26-03NT41986
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5.  AMENDMENT NO.
        A000
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6.  BUDGET PERIOD
        From:  9/30/03 To: 09/29/04
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7.  PROJECT PERIOD
        From 09/30/03  To:  09/29/05
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8.  RECIPIENT PROJECT DIRECTOR (Name and Telephone No.)
        Sharon M. Sjostrom, PE
        (303) 734-1727
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9.  RECIPIENT BUSINESS OFFICER (Name and Telephone No.)
        Richard J. Schlager
        (303) 734-1727
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10.  TYPE OF AWARD
        [X]  NEW                 [ ] CONTINUATION           [ ]  RENEWAL
        [ ]  REVISION            [ ] SUPPLEMENT
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11.  DOE PROJECT OFFICER (Name, Address, Zip Code, Phone No.)
        Scott Renninger
        National Energy Technology Laboratory
        P.O. Box 880
        Morgantown, WV 26507-0880
        (304) 285-4790
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12.  ADMINISTERED FOR DOE BY (Name, Address, Zip Code, Phone No.)
        Martin J. Byrnes
        National Energy Technology Laboratory
        P.O. Box 10940
        Pittsburgh, PA 15235-0940
        (412) 386-4486
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13.  RECIPIENT TYPE
        [ ] STATE GOV'T              [ ] INDIAN TRIBAL GOV'T     [ ] HOSPITAL
        [X] FOR PROFIT ORGANIZATION  [ ] INDIVIDUAL              [ ] LOCAL GOV'T
        [ ] INSTITUTION OF HIGHER    [ ] OTHER NONPROFIT         [ ] OTHER
            EDUCATION                    ORGANIZATION                (Specify)
                                [ ]  C         [ ]  P       [ ]  SP
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<PAGE>

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14.  ACCOUNTING AND APPROPRIATIONS DATA
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  a. Appropriation Symbol   b.  B&R No.    c.  FT/AFP/OC       d.  CFA Number
  -----------------------   -----------    -------------       --------------
    89x0213.91              AA2025200      JA/PE, 255           7284998
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15.  EMPLOYER I.D. NUMBER                                  84-134-1182
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16.  BUDGET AND FUNDING INFORMATION
          a.  CURRENT BUDGET PERIOD INFORMATION
        (1)  DOE Funds Obligated this Action                    $   900,000
        (2)  DOE Funds Authorized for Carry Over                $       -0-
        (3)  DOE Funds Previously Obligated in this
             Budget Period                                      $       -0-
        (4)  DOE Share of Total Approved Budget                 $ 2,765,469
        (5)  Recipient Share of Total Approved Budget           $ 1,362,777
        (6)  Total Approved Budget                              $ 4,128,246
          b   CUMULATIVE DOE OBLIGATIONS
        (1)  This Budget Period                                 $   900,000
                [Total Lines a.(1) and a.(3)]
        (2)  Prior Budget Periods                               $
        (3)  Project Period to Date                             $   900,000
                [Total Lines b.(1) and b(2)]
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17.  TOTAL ESTIMATED COST OF PROJECT:  $8,773,787 (DOE share is $6,000,000)
(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)
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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, as amended
        d.   Application/Proposal dated April 4, 2003, updated September 12,
             2003.  [ ] as submitted  [X] with changes as negotiated.
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19.  REMARKS

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20.  EVIDENCE OF RECIPIENT ACCEPTANCE
        /s/  Richard J. Schlager                10/7/03
        -----------------------------------------------
        (Signature of Authorized Official)
     Name:  Richard J. Schlager
     Title:  Vice President
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21.  AWARDED BY
        /s/  Keith R. Miles                     9/30/03
        -----------------------------------------------
     Name:  Keith R. Miles
     Title:  Contracting Officer
================================================================================

<PAGE>

                    SECTION II - SPECIAL TERMS AND CONDITIONS

2.1  CONSECUTIVE NUMBERING (JAN 1999)

     Due to automated procedures employed in formulating this document, clauses
     and provisions within it may not always be continuously numbered.

2.2  PREVAILING REGULATIONS (MAY 2002)

     As indicated on the face page, Block 18c, this award is subject to the DOE
     Assistance Regulations of Title 10, Code of Federal Regulations, Part 600.
     This set of regulations may be found in most major libraries or on the
     World Wide Web at:
     http://www.access.gpo.gov/nara/cfr/cfrhtml_OO/Title_10/1Ocfr600_O0.html

2.3  ORDER OF PRECEDENCE (AUG 2001)

     In the event of any inconsistency among the provisions of this agreement,
     the inconsistency shall be resolved by giving precedence as follows: (a)
     applicable public laws; (b)10 CFR Part 600; (c) the special terms and
     conditions; and (d) other documents, exhibits and attachments.

2.4  STATEMENT OF SUBSTANTIAL INVOLVEMENT (JUNE 2002)

     DOE anticipates having substantial involvement during the project period,
     through technical assistance and advice. Specifically, there will be a
     project assessment at the end of each budget period and DOE will review and
     approve or disapprove the Continuation Application to proceed with the next
     budget period (see article 2.6 below). DOE will consent to host site
     agreements.

     RECIPIENT'S RESPONSIBILITIES. The Recipient is responsible for:

     Performing the activities supported by this award, including providing the
     required personnel, facilities, equipment, supplies and services;

     Defining approaches and plans, submitting the plans to DOE for review, and
     incorporating DOE comments;

     Attending semiannual program review meetings and reporting project status;

     Submitting technical reports to the DOE Project Officer and incorporating
     DOE comments; and;

     Presenting the project results at appropriate technical conferences or
     meetings as directed by the DOE Project Officer

     DOE RESPONSIBILITIES. DOE is responsible for:

     Reviewing in a timely manner project plans, including technology transfer
     plans, and redirecting the work effort if the plans do not address critical
     programmatic issues;

     Conducting program review meetings to ensure adequate progress and that the
     work accomplishes the program and project objectives. Redirecting work or
     shifting work emphasis, if needed;

     Promoting and facilitating technology transfer activities, including
     disseminating program results through presentations and publications; and

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     Serving as scientific/technical liaison between Recipient and other program
     or industry staff.

2.5  COST SHARING (JUNE 2003)

     The total estimated cost for the work to be accomplished under this award
     is $8,773,787. The Recipient and the Government agree to share the
     allowable project costs an this project is anticipated to be completed in
     three (3) budget periods summarized as follows:

                   Budget Period 1   Budget Period 2   Budget Period 3   TOTAL
                   ---------------   ---------------   ---------------   -----
DOE Share             2,765,469         2,270,630          963,902     6,000,000

Recipient Share       1,362,777           919,413          491,597     2,773,787

Budget Period
  Duration in Months         13                13               13            39

     The Recipient's anticipated source of cost-sharing is identified in
     Attachment C, Budget Pages of this award. When these costs are expended,
     they will be Identified as the Recipient's contribution and provided as
     backup information to the SF272 or the SF270 depending upon the method of
     payment.

     The respective cost-share percentages shall be achieved by the completion
     or termination date of this award. In the event the award is completed or
     terminated and the Recipient has not shared 31.6% of the allowable, costs,
     the Recipient will refund to the DOE an amount such that the Recipient's
     share ratio is 31.6%.

2.6  FUNDING (SEPT 2000)

     This award is to be incrementally funded. The DOE has currently obligated
     $900,000 and anticipates, subject to the availability of additional funds,
     obligating the DOE balance of $1,865,469 for Budget Period 1. The Recipient
     shall not be obligated to continue performance of this project beyond the
     amount set forth in Block I 6(b)(3) of the DOE F 4600.1 an the DOE is under
     no commitment to provide additional funding to the Recipient beyond this
     amount.

2.7  CONTINUATION APPLICATION (AUG 2001)

     Funding for each budget period within the approved project period shall be
     contingent on DOE approval of a continuation application submitted no later
     than 60 days prior to the end of the current budget period. The
     continuation application shall be submitted on the SF 424. Technical and
     budgetary information supporting the continuation application shall, be
     provided in accordance with 10 CFR 800.26. Forms for submission of
     continuation applications can be found at
     http://www.netl.doe.gov/business/index.html.

2.8  METHOD OF PAYMENT - ADVANCE (APR 200l)

     Payment to the Recipient will be made in advance by using the Department of
     Treasury Automated Standard Application for Payments System (ASAP), in
     accordance with 10 CFR 600.122(b).

     The Recipient will request advances using the ASAP payment system and will
     request cash only as needed for immediate disbursements, will report cash
     disbursements in a timely manner, and will impose the same standards of
     timing and amount, including reporting requirements, on secondary
     recipients.

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     If DOE subsequently determines that the recipient's financial management
     system does not meet the required standards of 10 CFR 600.121, or the
     recipient has not maintained or demonstrated the willingness and ability to
     maintain written procedures that minimize the time elapsing between the
     transfer of funds and disbursement by the recipient, advance payments may
     be changed to payments by reimbursement.

     The Recipient is required to maintain advances of federal funds in interest
     bearing accounts. Any interest income earned by the Recipient on federal
     funds must be remitted at least quarterly to the cognizant DOE office.
     However, up to $250 of the interest earned per year may be retained by the
     Recipient to cover administrative expenses.

     Funds advanced to the Recipient must be kept to a minimum amount necessary
     to meet the Recipient's cash flow needs. Cash needs shall be determined by
     the Recipient's cash outlay requirements and shall not be based on costs
     incurred. If funds are erroneously drawn in excess of the Recipient's
     immediate disbursement needs, the excess funds should be promptly refunded
     and reissued when needed. The only exception to this is when excess funds
     will be disbursed by the Recipient within seven calendar days or when the
     excess funds are less than $10,000 and will be disbursed within thirty (30)
     calendar days.

2.9  ACKNOWLEDGMENT OF FEDERAL FUNDING (NOV 1998)

     When issuing statements, press releases, requests for proposals, bid
     solicitations, and other documents describing this project, the Recipient
     shall clearly state (1) the percentage of the total cost of the project
     which will be financed with Federal money, and (2) the dollar amount of
     Federal funds for the project.

2.10 REAL PROPERTY- NONE (JAN 1999)

     No real property may be acquired under this award.

2.11 RECIPiENT ACQUIRED PROPERTY (JAN 1999)

     Recipient acquired property is listed in Attachment D.

2.12 FEDERALLY OWNED PROPERTY GOVERNMENT-FURNISHED) - NONE (JAN 1999)

     No Government-furnished property is provided under this award.

2.13 KEY PERSONNEL (APR 2002)

     Recipient personnel considered to be essential and key to the work being
     performed hereunder are specified in Block 8 on the Face Page of this
     award.

     The personnel specified in this clause are considered to be essential to
     the project. Before removing or replacing any key personnel, the Recipient
     shall notify the Contracting Office reasonably in advance and shall submit
     justification (including proposed substitutions) in sufficient detail to
     permit evaluation of the impact on the project. No key personnel may be
     substituted without the Contracting Officer's approval. Such approval shall
     be obtained in advance of the substitution, except that the Contracting
     Officer may ratify a substitution which, because of exigent circumstances,
     was made before the Recipient could request and/or obtain the Contracting
     Officer's approval.

2.14 PAPERWORK REDUCTION - COOPERATIVE AGREEMENTS (SEPT 2002)

     The award is subject to the requirements of the Paperwork Reduction Act of
     1980 as implemented by the Office of Management and Budget rules,
     "Controlling Paperwork Burdens on the Public," published at 5 CFR 1320.

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     The Recipient shall submit any proposed sponsored Information collection to
     the person identified on the DOE F 4600.1 (Award Face Page, Block 12). The
     proposal shall be submitted at least 120 days prior to the intended date of
     information collection. DOE will seek the requisite approval from the
     Office of Management and Budget (0MB) and will promptly notify the
     Recipient of the disposition of the request.

2.15 PUBLIC ACCESS TO INFORMATION (APR 2000)

     The Freedom of Information Act, as amended, and the DOE implementing
     regulation (10 CFR 1004) require DOE to release certain documents and
     records regarding awards to any person who provides a written request. The
     intended use of the information will not be a criterion for release.

2.16 COMPLIANCE WITH BUY AMERICAN ACT (JULY 2003)

     In accepting this award, the Recipient agrees to comply with sections 2
     through 4 the Act of March 3, 1933 (41 U.S.C. 10a-lOc, popularly known as
     the "Buy American Act"). The Recipient should review the provisions of the
     Act to ensure that expenditures made under this award are in accordance
     with it.

2.17 NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS
     --SENSE OF CONGRESS (JULY 2OO3)

     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.

2.18 LOBBYING RESTRICTION (INTERIOR ACT, 2003) (JULY 2003)

     The awardee agrees that none of the funds obligated on this award shall be
     made available for any activity or the publication or distribution of
     literature that in any way tends to promote public Support or opposition to
     any legislative proposal on which Congressional action is not complete.
     This restriction is in addition to those prescribed elsewhere in statute
     and regulation.

     A copy of the DOE "Lobbying Brochure" which provides a summary of the
     statutory and regulatory restrictions regarding lobbying activities for
     Federal contractors can be found at

http://professionals.pr.doe.gov/ma5/MA-5Web.nsf/Procurement/Lobbying+Brochure?
OpenDocument

2.19 NOTICE REGARDING UNALLOWABLE COSTS AND LOBBYING ACTIVITIES (NOV 1998)

     Recipients of financial assistance are cautioned to carefully review the
     allowable cost and other provisions applicable to expenditures under their
     particular award instruments. If financial assistance funds are spent for
     purposes or in amounts inconsistent with the allowance cost or any other
     provisions governing expenditures in an award instrument, the government
     may pursue a number of remedies against the Recipient, including in
     appropriate circumstances, recovery of such funds, termination of the
     award, suspension or debarment of the Recipient from future awards, and
     criminal prosecution for false statements.

     Particular care should be taken by the Recipient to comply with the
     provisions prohibiting the expenditure of funds for lobbying and related
     activities. Financial assistance award may be used to describe and promote
     the understanding of scientific and technical aspects of specific energy
     technologies, but not to encourage or support political activities such as
     the collection and dissemination of information related to potential,
     planned or pending legislation.

2.20 REPORTING (NOV 1998)

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     Failure to comply with the reporting requirements contained in this award
     will be considered a material noncompliance with the terms of the award.
     Noncompliance may result in a 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 of
     unsatisfactory performance of this and/or other financial assistance
     awards, may also result in a debarment action to preclude future awards by
     Federal agencies.

2.21 SAFETY & HEALTH AND ENVIRONMENTAL PROTECTION (JAN 1999)

     The Recipient shall implement the DOE work in accordance with all
     applicable Federal, State, and local laws, including codes, ordinances, and
     regulations, covering safety, health, and environmental protection.

     The Recipient agrees to include this clause in first-tier subcontracts and
     agrees to enforce the terms of this clause.

2.22 HAZARDOUS WASTES MANIFESTS AND LABELS (MAR 2003)

     The Recipient shall not identify, on wastes manifests or container labels
     or otherwise, the DOE or the NETL as the owner or generator of hazardous
     wastes without written permission signed by either the NETL Director or
     both the NETL Contracting Officer and the NETL ES&H division Director,
     unless expressly and specifically permitted by the award.

2.23 PERMITS AND LICENSES (AUG 1999)

     Within sixty (60) days of award, the Recipient shall submit to the DOE
     Contracting 0fficer Representative (COR) a list of ES&H approvals that, in
     the Recipient's opinion, shall be required to complete the work under this
     award. The list shall include the topic of the approval being sought, the
     approving authority, and the expected submittal/approval schedule. The COR
     shall be notified as specific items are added or removed from the list and
     processed through heir approval cycles.

     The Recipient agrees to include this clause in first-tier subcontracts and
     agrees to enforce the terms of this clause.

2.24 RECIPIENT PRESS RELEASES (APR 1998)

     The DOE policy and procedure on planned press releases requires that all
     Recipient press releases be reviewed and approved by DOE prior to issuance.
     Therefore, the Recipient shall, least ten (10) days prior to the planned
     issue date, submit a draft copy to the Contracting Officer of any planned
     press releases related to work performed under this award. The Contracting
     Officer 11 then obtain necessary reviews and clearances and provide the
     Recipient with the results of such reviews prior to the planned issue date.

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<PAGE>

                  SECTION III: INTELLECTUAL PROPERTY PROVISIONS

3.1  INTELLECTUAL PROPERTY PROVISIONS (JAN 1999)

     The patent and technical data clauses included in this section apply to
     this award. A used in these applicable clauses, the term "Patent Counsel"
     refers to the following point of contact:

                        Intellectual Property Law Division
                        U.S. Department of Energy
                        Chicago Operations Office
                        9800 South Cass Avenue
                        Argonne, IL 60439

     In any of the FAR and DEAR clauses contained in this section, use of the
     term "Contract" means "Award" and Contractor" means "Recipient."

     The Recipient shall include Intellectual property clauses in any contract
     awarded in accordance with requirements of the clauses in this section and
     of 10 CFR Part 600.27.

3.2  PUBLICATION OF RESULTS1ACKNOWLEDGMENT STATEMENT (JAN 1999)

     Publication of the results of the award is encouraged subject to any
     applicable restrictions in 10 CFR 600.27 (Patent and Data Provisions).
     Publications, as well as reports prepared under this award shall contain
     the following acknowledgment statement:

     "This (describe material) was prepared with the support of the U.S.
     Department of Energy, under Award No. DE-FC26-03NT41986. However, any
     opinions, findings, conclusions, or recommendations expressed herein are
     those of the author(s) and do not necessarily reflect the views of the
     DOE".

3.3  CONFIDENTIAL BUSINESS INFORMATION (AUG 2003)

     Information represented to the Department as being confidential business
     information, and which does not include "Technical Data" as that term is
     defined in FAR 52.227-14, Rights in (data - general, shall be submitted as
     an attachment to the required reports and will be withheld from disclosure
     outside the U.S. Government to the extent permitted bylaw. Such attachment
     and each page therein shall be stamped with the following legend and no
     other:

                        CONFIDENTIAL BUSINESS INFORMATION

          The Recipient considers the material furnished herein to contain
          confidential business information which is to be withheld from
          disclosure outside the U.S. Government to the extent permitted by law.

3.4  52.221-1 AUTHORIZATION AND CONSENT. (JUL 1995) - ALTERNATE 1 (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 supplies or services (including construction, architect-engineer
     services, and materials, supplies, models, samples, and design or testing
     services expected to exceed the simplified acquisition threshold); however,

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     omission of this clause from any subcontract, including those at or below
     the simplified acquisition threshold, does not affect this authorization
     and consent,

3.5  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.

3.6  DEAR 952.227-11 PATENT RIGHTS-RETENTION BY THE CONTRACTOR (SHORT FORM).
     (FEB 1995)

(a)  Definitions.

     (1)  "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.).

     (2)  "Made" when used in relation to any invention means the conception of
          first actua1 reduction to practice of such invention.

     (3)  "Nonprofit organization" means a university or other institution of
          higher education or an organization of the type described in section
          501 (cX3) 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.

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

     (5)  "Small business firm" means a small business concern as defined at
          section: 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing
          regulations of the Administrator o the Small Business Administration.
          For the purpose of this clause, the size standards or small business
          concerns involved in Government procurement and subcontracting at 13
          CFR 121.3-8 and 13 CFR 121.3-12, respectively, will be used.

     (6)  "Subject invention" means any invention of the contractor conceived or
          first actually reduced to practice in the performance of work under
          this contract, 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 contract performance.

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     (7)  "Agency licensing regulations" and "agency regulations concerning the
          licensing of Government-owned inventions" mean the Department of
          Energy patent licensing regulations at 10 CFR Part 781.

(b)  Allocation of principal rights. The Contractor may retain the entire right,
     title, and interest throughout the world to each subject invention subject
     to the provisions of this clause and 35 U.S.C. 203. With respect to any
     subject invention in which the Contractor retains title, the Federal
     Government shall have a nonexclusive, nontransferable, irrevocable, paid-up
     license to practice or have practiced for or on behalf of the United States
     the subject invention throughout the world.

(c)  Invention disclosure, election of title, and filing of patent application
     by Contractor.

     (1)  The Contractor will disclose each subject invention to the Department
          of Energy (DOE) within 2 months after the inventor discloses it in
          writing to Contractor personnel responsible for patent matters. The
          disclosure to DOE shall be in the form of a written report and shall
          identify the contract under which the invention was made and the
          inventor(s). It shall be sufficiently complete in technical detail to
          convey a ear understanding to the extent known at the time of the
          disclosure, of the nature, purpose, operation, and the physical,
          chemical, biological or electrical characteristic 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 the DOE, the Contractor will promptly notify that agency
          of the acceptance of any manuscript describing the invention for
          publication or of any on sale or public use planned by the Contractor.

     (2)  The Contractor will elect in writing whether or not to retain title to
          any such invention by notifying DOE within 2 years of disclosure to
          DOE. However, in any case ere publication, on sale or public use has
          initiated the 1-year statutory period wherein valid patent protection
          can still be obtained in the United States, the period for election of
          title may be shortened by DOE to a date that is no more than 60 days
          prior to the end of the statutory period.

     (3)  The Contractor will file its initial patent application on a subject
          invention to which it elects to retain title within 1 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 United
          States after a publication, on sale, or public use. The Contractor
          will file patent applications in additional countries or International
          patent offices within either 10 months I the corresponding initial
          patent application or 6 months from the date permission is granted by
          the Commissioner of Patents and Trademarks to file foreign patent
          applications where such filing has been prohibited by a Secrecy Order.

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

(d)  Conditions when the Government may obtain title. The Contractor will convey
     to the Federal agency, upon written request, title to any subject
     invention-

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

     (2)  In those countries in Which the Contractor fails to file patent
          applications within the times of this clause; provided, however, that

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          if specified in paragraph (c) the Contractor has filed a patent
          application in a country after the times specified in paragraph (c) I
          this clause, but prior to its receipt of the written request of the
          Federal agency, the Contractor shall continue to retain title in that
          country.

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

(e)  Minimum rights to Contractor and protection of the Contractor right to
     file.

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

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

     (3)  Before revocation or modification of the license, DOE will furnish the
          Contractor a written notice of its intention to revoke or modify the
          license, and the Contractor will be allowed 30 days (or such other
          time as may be authorized by DOE for good cause shown by the
          Contractor) after the notice to show cause why the license should not
          be revoked or modified. The Contractor has the right to appeal, in
          accordance with applicable regulations in 37 CFR Part 404 and agency
          regulations concerning the licensing of Government owned inventions,
          any decision concerning the revocation or modification of the license.

(f)  Contractor action to protect the Government's interest.

     (1)  The Contractor 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 to which the Contractor elects
               to retain title, and

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

     (2)  The Contractor 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
          Contractor each subject invention made under contract in order that
          the Contractor can comply with the disclosure provisions of paragraph

                                       10
<PAGE>

          (c) of this clause, and execute all papers necessary to file patent
          applications on subject inventions and to establish the Government's
          rights in the subject inventions. This disclosure format should
          require, as a minimum, the information required by subparagraph (c)(1)
          of this clause, he Contractor shall instruct such employees, through
          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 bar.

     (3)  The Contractor will notify DOE of any decision not to continue the
          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 he response
          period required by the relevant patent office.

     (4)  The Contractor agrees to include, within the specification of any
          United States patent application and any patent issuing thereon
          covering a subject invention, the following statement, "This invention
          was made with Government support under (identify the contract) awarded
          by the United States Department of Energy. The Government has certain
          rights in the invention."

(g)  Subcontracts.

     (1)  The Contractor will include this clause, suitably modified to identify
          the parties, in all subcontracts, regardless of tier, for
          experimental, developmental, or research work to be performed by a
          small business firm or domestic nonprofit organization. The
          subcontractor will retain all rights provided for the Contractor in
          this clause, and the Cant actor will not, as part of the consideration
          for awarding the subcontract, obtain rights in the subcontractor's
          subject inventions.

     (2)  The contractor shall include in all other subcontracts, regardless of
          tier, to experimental, developmental, demonstration, or research work
          the patent rights clause at 952.227-13.

     (3)  In the case of subcontracts, at any tier, DOE, subcontractor, and the
          Contractor agree that the mutual obligations of the parties created by
          this clause constitute contract between the subcontractor and DOE with
          respect to the matters covered by the clause; provided, however, that
          nothing in this paragraph is intended to confer and jurisdiction under
          the Contract Disputes Act in connection with proceedings under
          paragraph (j) of this clause.

(h)  Reporting on utilization of subject inventions. The Contractor 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 Contractor 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 Contractor, and Such other data and information as DOE may
     reasonably specify. The Contractor also agrees to provide additional
     reports as may be requested by DOE in connection with any march-in
     proceeding undertaken by that agency in accordance with paragraph (j) of
     this clause. As required by 35 U.S. 202(c)(5), DOE agrees it will not
     disclose such information to persons outside the Government without
     permission of the Contractor.

(i)  Preference for United States industry. Notwithstanding any other provision
     of this clause, the Contractor agrees that neither it nor any assignee will
     grant to any person the exclusive right to use or sell any Subject
     invention in the United States unless such person agrees that any product
     embodying the subject invention or produced through the use of the subject
     invention will be manufactured substantially in the United States. However,
     in individual cases, the requirement for such an agreement may be waived by
     DOE upon a showing by the Contractor or its assignee that reasonable but
     unsuccessful efforts have been made to grant licenses on similar terms to

                                       11
<PAGE>

     potential licensees that would be likely to manufacture substantially in
     the United States or that under the circumstances domestic manufacture is
     not commercially feasible.

(j)  March-in rights. The Contractor agrees that, with respect to any subject
     invention in which it has acquired title, DOE has the right in accordance
     with the procedures in 37 CFR 401.6 and any supplemental regulations of the
     agency to require the Contractor, an assignee or exclusive licensee of a
     subject invention to grant a nonexclusive, 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 Contractor, 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 Contractor 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 Contractor, 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 Co tractor, assignee, or licensees; or

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

(k)  Special provisions for contracts with nonprofit organizations. If the
     Contractor is a nonprofit organization, it agrees that -

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

     (2)  The Contractor 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 Contractor 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 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 a preference to a small business firm when
          licensing a subject invention if the Contractor determines that the
          small business firm has a plan or proposal for marketing the invention
          which, if executed, is equally as likely to bring the invention to
          practical application as any plans or proposals from applicants that
          are not small business firms; provided, that the Contractor 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 contractor. However, the Contractor agrees that the Secretary of
          Commerce may review the Contractor's licensing program and decisions
          regarding small business applicants, and the Contractor will negotiate
          changes to its licensing policies, procedures, or practices with the
          Secretary of Commerce when that Secretary's review discloses that the
          Contractor could take reasonable steps to more effectively implement
          the requirements of this subparagraph (k)(4).

                                       12
<PAGE>

(l)  Communications.

     (1)  The contractor shall direct any notification, disclosure, or request
          to DOE provided for in this clause to the DOE patent counsel assisting
          the DOE contracting activity, with a copy of the communication to the
          Contracting Officer.

     (2)  Each exercise of discretion or decision provided for in this clause,
          except subparagraph (k)(4), is reserved for the DOE Patent Counsel and
          is not a claim or dispute and is not subject to the Contract Disputes
          Act of 1978.

     (3)  Upon request of the DOE Patent Counsel or the contracting officer, the
          contractor shall provide any or all of the following:

          (i)  a copy of the patent application, filing date, serial number and
               title, patent number, and issue date for any subject invention in
               any country in which the contractor has applied for a patent;

          (ii) a report, not more often than annually, summarizing all subject
               inventions which were disclosed to DOE individually during the
               reporting period specified; or

          (iii) a report, prior to closeout of the contract, listing all subject
               inventions or stating that there were none.

3.7  FAR 52.227-14 RIGHTS IN DATA - GENERAL. (JUN 1987) WITH ALT. V (JUN 1987)

     This clause is amended by DEAR 927.409 (JAN 1999) and 10 CFR 600.27

(a)  Definitions.

     (1)  "Computer databases," 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 computer. The term does not include
          computer software.

     (2)  "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.

     (3)  "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. For the purposes of this clause,
          the term does not include data incidental to the administration of
          this award, such as financial, administrative, cost and pricing, or
          management information.

     (4)  "Form, fit, and function data," as used in this clause, means data
          relating o 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.

                                       13
<PAGE>

     (5)  "Limited rights data," as used in thIs clause, means data, other than
          computer software, developed at private expense that embody trade
          secrets or are commercia1 or financial and confidential or privileged.
          The Government's rights to use, duplicate, or disclose limited rights
          data are as set forth in the Limited Rights Notice of subparagraph
          (g)(2) of this section if included in this clause.

     (6)  "Restricted computer software," as used in this clause, means computer
          so ware 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 any such computer software. The Government's rights to use,
          duplicate, or disclose restricted computer software are as set forth
          in the Restricted Rights Notice of subparagraph (g)(3) of this section
          If included in this clause.

     (7)  "Technical data," as used in this clause, means recorded data,
          regardless of form or characteristic, that 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.

     (8)  "Unlimited rights," as used in this clause, means the rights of the
          Government to use, disclose, reproduce, prepare derivative works,
          distribute copies to the Public, including by electronic means, and
          perform publicly and display publicly, in any manner, including by
          electronic means, and for any purpose whatsoever, and to have or
          permit others to do so.

(b)  Allocation 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 award;

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

          (iii) Data delivered under this award (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 award; and

          (iv) All other data delivered under this award 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 award, 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 pan graph (g) of this clause;

          (iii) Substantiate use of, add or correct limited rights, restricted
               rights, or copyright notices and to take other appropriate
               action, in accordance with paragraphs (a) and (1) of this clause;
               and

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

                                       14
<PAGE>

(c)  Copyright -

     (1)  Data first produced in the performance of this award. 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 scientific and technical articles based on or
          containing data first produced in the performance of this award and
          published in academic, technical or professional Journals, symposia
          proceedings or similar works. The prior, express written permission of
          the Contracting Officer is required to establish claim to copyright
          subsisting in all other data first produced in the performance of this
          award. When claim to copyright is made, the Recipient shall affix the
          applicable copyright notices of 17 U.S.C. 401 or 402 and
          acknowledgment of Government sponsorship, (including award 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 data other than
          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. For computer
          software, the Recipient grants to the Government and others acting in
          its behalf, a paid-up nonexclusive, irrevocable worldwide license in
          such copyrighted computer software to reproduce, prepare derivative
          works, and perform publicly and display publicly by or on behalf of
          the Government.

     (2)  Data not first produced in the performance of this award, The
          Recipient shall not, without prior written permission of the
          Contracting Officer, incorporate in data delivered under this award
          any data not first produced in the performance of this award 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 a me 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 award or as otherwise may be provided in a collateral
          agreement incorporated in or made part of this award.

     (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 award,
          except to the extent such data may be subject to the Federal (port
          control or national security laws or regulations, or unless otherwise
          provided in this paragraph of this clause or expressly set forth in
          this award.

     (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.

     (3)  The Recipient agrees not to assert copyright in computer software
          first produced in the performance of this award without prior written
          permission of the DOE Patent Counsel assisting the contracting
          activity. When such permission is granted, the patent Counsel
          shall specify appropriate terms, conditions, and submission
          requirements to assure utilization, dissemination, and
          commercialization of the data. The Recipient, when requested, shall
          promptly deliver to Patent Counsel a duly executed and a proved
          instrument fully confirmatory of all rights to which the Government is
          entitled.

                                       15
<PAGE>

(e)  Unauthorized marking of data.

     (1)  Notwithstanding any other provisions of this award concerning
          inspection or acceptance, if any data delivered under this award are
          marked with the notices sped led 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 no
          authorized by this award 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
               subdivision (e)(1)(i) of this clause, the Contracting Officer
               shall consider such written justification and determine whether
               or not the markings are to be canceled or ignored. if the
               Contracting Office 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
               subdivision (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,

     (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.

     (3)  This paragraph (e) does not apply if this award is for a major system
          or for support of a major system by a civilian agency other than NASA
          and the U.S. Coast Guard agency subject to the provisions of Title III
          of the Federal Property and Administrative Services Act of 1949.

     (4)  Except to the extent the Government's action occurs as the result of
          final disposition of the matter by a court of competent jurisdiction,
          the Recipient is not precluded by this paragraph (e) from bringing a
          claim under the Contract Disputes Act, including pursuant to the
          Disputes clause of this award, as applicable, that may arise as the
          result of the Government removing or ignoring authorized markings on
          data delivered under this award.

(f)  Omitted or incorrect markings.

                                       16
<PAGE>

     (1)  Data delivered to the Government without either the limited rights or
          restrict 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 of such
          data, permission to have notices placed on qualifying data at the
          Recipient's expense, and the Controlling 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 o
               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.

     (1)  When data other than that listed in subdivisions (b)(1)(i), (ii), and
          (iii) of this clause are specified to be delivered under this award
          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 is award. As a condition to this withholding, the
          Recipient shall identify the data being wit aid 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.

     (2)(Reserved)

     (3)(Reserved)

(h)  Subcontracting. The Recipient has the responsibility to obtain from its
     subcontractors all data and rights therein necessary to fulfill the
     Recipient's obligations to the Government under this award. If a
     subcontractor 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 subcontract award without further
     authorization.

(i)  Relationship to patents. Nothing contained in this clause shall imply a
     license to the Government under any patent or be construed as affecting the
     scope of any license or other right otherwise granted to the Government.

(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 authorize 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)(1) 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 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.

                                       17
<PAGE>

3.8  RIGHTS IN TECHNICAL DATA (FE-Inspection) (JULY 2003)

     Withholding of limited rights data. Notwithstanding the inclusion of clause
     FAR 52.227-16, Additional Technical Data Requirements in this award or any
     provision of this award specifying the delivery of technical data, the
     Recipient may withhold limited rights data from delivery, provided that the
     Recipient furnishes in lieu of any such limited rights data so withheld
     technical data disclosing the source, size, configuration, mating and
     attachment characteristics functional characteristics and performance
     requirements ("Form, Fit and Function" data, e.g., specification control
     drawing, catalog sheets, envelope drawings. etc.), or a general description
     of such limited rights data when "Form, Fit and Function" data are not
     applicable. Such data shall be subject to the provision of clause FAR
     52.227-14, Rights in Data--General with Alternative V, paragraph (j),
     "Inspection Rights," and paragraph (g), "Protection of Limited Rights Data
     and Restricted Computer Software."

     1.   The limited rights data subject to clause FAR 52.227-14 are listed
          below. The listing of data, which are asserted by the Recipient to be
          limited rights data, does not constitute an a admission by the
          Government that the data is in fact limited rights data.

          1.   Sorbent Injection System (design of sorbent storage and sorbent
               feeding equipment)
          2.   Sorbents (manufacturing process and composition)

          If a patent is issued by the United States Patent and Trademark Office
     (U.S. PT0) or the patent office of any foreign country based on any
     information asserted to be limited rights data, the Government will no
     longer treat any data contained in such issued patent as limited rights
     data. In addition, if any information asserted to be limited rights data
     results in or becomes a Subject Invention, as that term is defined in the
     patent rights clause of this agreement, the Government will only treat such
     data as limited rights data until the Recipient has filed its initial
     patent application.

     2.   Subject to clause FAR 52.227-14 paragraph (j), any limited rights data
          specifically used in the performance of this award shall, at the
          option of the Contracting Officer, be available for inspection by a
          designee of the Contracting Officer at the project facility.

     3.   The Recipient shall not introduce or utilize any limited rights data
          not identified in paragraph (1) above in the performance of the award
          without the expressed written permission of he Contracting Officer,

Minimum technical data deliverable with unlimited rights. Not withstanding any
other provision of this award, the following technical data first produced under
this award as a minimum, shall be delivered a the DOE with unlimited rights:

     1.   Sorbent Injection System (operating parameters-throughput, airflow
          rate, location of injection ports, number of injection locations,
          general process diagram)

     2.   Sorbents

          a.   performance at removing mercury from flue gas (% removal)
          b:   physical properties (particle size distribution, pore size,
               surface area, iodine numbers, sorption capacity)
          c.   conditions of use (temperature, use rate, concentrations of gas
               components treated)
          d.   impacts of fly ash (if tested)

3.9  52.227-16 ADDITiONAL DATA REQUIREMENTS. (JUN 1987)

                                       18
<PAGE>

(a)  In addition to the data (as defined in the clause at 52.227-14, Rights in
     Data - General clause or other equivalent included in this contract)
     specified elsewhere in this contract to be delivered, the Contracting
     Officer may, at any time during contract performance or within a period of
     3 years after acceptance of all items to be delivered under this contract,
     order any data first produced or specifically used in the performance of
     this contract.

(b)  The Rights in Data - General clause or other equivalent included in this
     contract is applicable to all data ordered under this Additional Data
     Requirements clause. Nothing contained in this clause shall require the
     Contractor to deliver any data the withholding of which is authorized by
     the Rights in Data - General or other equivalent clause of this contract,
     or data which are specifically identified in this contract as not subject
     to this clause.

(c)  When data are to be delivered under this clause, the Contractor will be
     compensated for converting the data into the prescribed form, for
     reproduction, and for delivery.

(d)  The Contracting Officer may release the Contractor from the requirements of
     this clause for specifically identified data items at any time during the
     3-year period set forth in paragraph (a) of this clause.

3.10 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 April 4, 2003, upon
     which this contract is based.

                                       19
<PAGE>

                        SECTION IV - LIST OF ATTACHMENTS

4.1  LIST OF ATTACHMENTS (JAN 1999)

     Attachment A -- Statement of Project Objectives

     Attachment B -- Federal Assistance Reporting Checklist

     Attachment C -- Budget Page(s)

                                       20
<PAGE>

4.2 ATTACHMENT A -- STATEMENT OF PROJECT OBJECTIVES (JAN 1999)

                                       21
<PAGE>

                         Statement of Project Objectives

             "Evaluation of Sorbent Injection for Mercury Control"

A. OBJECTIVES

The purpose of this project is to evaluate the capabilities of activated
carbon/sorbent injection by gathering operating data that will document actual
performance levels and accurate cost information. The specific objectives of
this program arc to:

     o    accelerate the scale-up and availability of commercial mercury control
          systems for subbituminous-fired plants with spray dryers and ESPs,

     o    evaluate alternate sorbents and techniques to enhance the
          effectiveness of commercially-available activated carbon for spray
          dryer and PRB ESP applications,

     o    obtain data on operability, maintainability, and reliability,

     o    determine maximum mercury removal for various plant configurations,
          and determine the total costs associated with mercury control as a
          function of fuel and plant characteristics.

B. SCOPE OF WORK

     The scope of work is for two, 18-month long budget periods and intended to
     generate the necessary information to assess the costs of controlling
     mercury from coal-fired utilities. Testing will be conducted at four
     different host sites that represent a significant percentage of unit
     configurations. The subsequent cost analyses will include capital costs,
     byproduct utilization issues, sorbent usage, any necessary enhancements,
     such as SO3 control or flue gas conditioning, balance of plant, manpower
     requirements and waste issues, The host sites are Sunflower Electric's
     Holcomb Station, Ontario Power Generation's Nanticoke Station AmerenUE's
     Meramec Station and American Electric Power's (AEP) Conesville

                                       1
<PAGE>

     Station. Table 1 presents a matrix showing how the four test sites address
     areas of interest for mercury control research.

<TABLE>
<CAPTION>
                    Table 1. Matrix Identifying Host Site with Area of Interest
------------------------------------------------------------------------------------------------------
Area of Interest                             Holcomb        Meramec       Nanticoke         Conesville
------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>             <C>
Low Rank fuels (PRB)                            X               X              X
------------------------------------------------------------------------------------------------------
Bituminous Fuels                                                                                X
------------------------------------------------------------------------------------------------------
Blended Fuels                                   X                              X
------------------------------------------------------------------------------------------------------
Medium SCA ESP                                                  X              X                X
------------------------------------------------------------------------------------------------------
Spray Dryer (effect of HC1 removal on           X
sorbent performance)
------------------------------------------------------------------------------------------------------
Synergy between WFGD and Sorbent                                                                X
injection
------------------------------------------------------------------------------------------------------
Longer term tests (1 - 2 months)                X               X              X                X
------------------------------------------------------------------------------------------------------
</TABLE>

C. TASKS TO BE PERFORMED

     The program is divided into 5 major tasks. Each task addresses one or more
     of the program objectives. A description of these tasks is presented below.

Task 1. Design and Fabrication of Sorbent Injection System

ADA-ES shall properly design and size sorbent injection equipment to cover the
expected range of plant sizes (14O-5OO MW) and flue gas conditions, with the
flexibility for both baghouse and ESP applications. The, new equipment should
incorporate modifications identified during the Phase I tests necessary to meet
the needs of the different sites and to assure DOE that a representative
evaluation can be performed. Prior to finalizing the equipment design, a design
review meeting shall be organized to assure a critical analysis of the system.
It is expected that the participating parties will include DOE, ADA-ES, ALSTOM,
equipment suppliers, and site-specific program engineers. The carbon injection
system shall consist of a bulk-storage silo (equipped with a bin vent bag
filter), twin blower/feeder train, variable speed screw feeders, regenerative
blowers, a PLC system, distribution manifolds and injection probes.

                                        2
<PAGE>

Task 2. Field Testing

Each host site task has seven subtasks. A summary of the field test subtasks is
presented in Table 2. The four sites identified for testing are Sunflower
Electric's Holcomb Station, AmerenUE's Meramec Station, AEP's Conesville Station
and Ontario Power Generation's Nanticoke Station.

           Table 2. Task 2 Subtasks (to be Repeated at Each Test Site)

     Subtask         Description
     -------         -----------
     2.1             Host site kickoff, meeting, test plan and QA/QC plan
     2.2             Design and install site specific equipment
     2.3             Field Tests
        2.3.1          Sorbent screening
        2.3.2          Sample and data coordination
        2.3.3          Baseline tests
        2.3.4          Parametric tests
        2.3.5          Long-term tests
     2.4             Data analysis
     2.5             Sample Evaluation
     2.6             Economic analysis
     2.7             Site report

Subtask 2.1. Host Site Planning and Coordination

Efforts within this subtask include planning the site-specific tests with the
host kite utility, DOE/NETL and contributing team members. The planning process
shall inclu4e meeting with plant personnel, corporate, and environmental
personnel to discuss and agree upon the overall scope of the program, the
potential impact on plant equipment and operation, and to gather preliminary
information necessary to develop a detailed draft test plan and scope of work.
The host site agreements, team member cost sharing arrangements, permit
requirements, quality assurance/quality control plan, site-specific scope for
each of the team members, and Ontario Hydra mercury measurement subcontracts
shall be finalized during this subtask. At least three Ontario Hydro sampling
periods shall be conducted at each test site and mercury S-CEMs shall be
operated continuously throughout the test period.

                                        3
<PAGE>

The test program at each site shall allow for the evaluation of different
sorbents including a lignite-derived activated carbon supplied by NORIT,
referred to as Darco FGD carbon, and other alternative sorbents that have the
potential to capture mercury at the low HC1 conditions typical of subbituminous
units, especially those with upstream spray dryers. A draft test plan (for each
site) shall be presented at kickoff meetings at the plant sites. The test plan
and supporting documents shall be available for host site perso4iei to use when
addressing permitting, scheduling and operating issues. Following the kickoff
meeting, the final test plan shall be developed with input and approval from
both the host site and DOE. The final test plan shall be completed 30 days prior
to testing and require concurrence from both the host site and DOE COR. The
participant shall also prepare a program management plan that includes
coordination, accounting, and proj4 tracking activities for each host-site field
test.

Subtask 2.2. Design, Fabricate, and Install Site-Specific Equipment

All site specific components that must be sized and designed for the spe4ific
plant arrangements and ductwork configurations shall be provided by the host
utility. Site-specific equipment includes the sorbent distribution manifold and
sorbent injectors (which shall be re-used at multiple sites if possible).
Required site support sh4ll include installation of the injection and sampling
ports (if not available), installation of required platforms and scaffolding,
compressed air, electrical power, wiring plant signals including boiler load to
the injection skid and control trailer, and balance of plant engineering. ADA-ES
engineers shall work with plant engineers to develop an installation and
contractor bid package for installation activities, and work with the
installation contractors. ADA-ES shall oversee installation arid system
checkout of the mercury control equipment and shall work with each host utility
to assure that the equipment is installed in an efficient manner, within the
resources available to the site. ADA-ES and ALSTOM shall also be responsible for
the final checkout of all systems and for the general maintenance of the
systems during testing. The project team will ensure that at least one engineer
or technician is solely dedicated to the operation of the equipment and will be
on-site for all tests. ADA-ES shall install the mercury S-CEMs at the host
utility. Each host utility shall be responsible for all permitting and ar4r

                                        4
<PAGE>

variance requirements associated with its particular site. In addition, ADA-EA
will coordinate with the host utility to make arrangements to isolate fly ash
from the test unit during sorbent injection.

Subtask 2.3. Field Testing

The field tests shall be accomplished through a series of five (5) sub-subtasks.
The sub-subtasks are independent from each other in that they each have
specific goals and tests associated with them. However, they are also
interdependent, as the results from each task shall influence the test
parameters of subsequent tasks. A summary of each task is presented.

     Sub-subtask 2.3.1 Sorbent Screening: Prior to the start of equipment
     installation, elected sorbents shall be screened on actual flue gas.
     Screening procedures could include measuring adsorption capacity of the
     sorbent in a fixed bed laboratory test (performed by URS Corporation) or
     utilizing a sorbent screening device designed to provide a comparison of
     sorbent effectiveness in a fabric filter application. The performance of
     the sorbents shall be evaluated by comparing the mercury removal
     effectiveness of each sorbent as a function of mass injected upstream of
     the filter. Results on screening tests shall be used to select alternative
     sorbents. Mercury measurements shall be made with a mercury S-CEM. Samples
     of the candidate and selected sorbents shall be supplied to DOE if
     requested by the COR.

     Sub-subtask 2.3.2 Sample and data coordination: ADA-ES engineers shall
     coordinate with plant personnel to retrieve the necessary plant operating
     data files as described in Table 3. These data shall be reviewed daily (if
     available and integrated into the sorbent injection and mercury control
     data. ADA-ES site engineers shall closely monitor plant operation in
     real-time during testing and evaluate key operating parameters including
     spray dryer pH and solids conveying, baghouse pressure drop, and cleaning
     frequency, and ESP secondary power and spark rate. If at any time the
     performance of the existing pollution control equipment deteriorates or if
     there is a measurable increase in outlet emissions, testing shall be
     halted.

     The primary extraction locations for the mercury S-CEMs shall be across the
     entire air pollution control train, at the inlet to the ESP or spray dryer
     and downstream of the ESP, fabric filter or wet scrubber. The extraction
     location shall be identified after a full velocity and temperature traverse
     to indicate a representative duct average mercury concentration, Additional
     extraction locations shall be designated by ADA-ES as appropriate for
     various eqi4pment configurations at various sites. For example, additional
     locations upstream of the particulate collector and downstream of sorbent
     injection between the spray dryer and fabric filter at Holcomb, and between

                                        5
<PAGE>

     the ESP and wet scrubber at Conesville may be necessary. Triplicate manual
     mercury samples using the draft Ontario Hydro Method shall be collected at
     the inlet and outlet locations. HC1 measurements Shall be made at each site
     to better characterize the flue gas. Engineers shall also develop a sample
     Chain-of-Custody and coordinate with plant personnel to assure coal) ash,
     and other samples (such as the spray dryer product at Holcomb) are sampled
     and tracked properly.

<TABLE>
<CAPTION>
                        Table 3. Data Collected During Field Testing
-------------------------------------------------------------------------------------------
Parameter               Sample/signal/test                      Baseline        Parametric/
                                                                                Long-Term
-------------------------------------------------------------------------------------------
<S>                    <C>                                      <C>            <C>
Coal                    Batch sample                            Yes             Yes
-------------------------------------------------------------------------------------------
Coal                    Plant signals:                          Yes             Yes
                         burn rate (lb/hr)
                         quality (lb/MMBTU, % ash)
------------------------------------------------------------------------------------------
Fly ash                 Batch sample                            Yes             Yes
------------------------------------------------------------------------------------------
Wet scrubber            Batch sample                            Yes             No/Yes
blowdown, solids
discharge and feed
limestone
------------------------------------------------------------------------------------------
Unit operation          Plant Signals:                          Yes             Yes
                         Boiler load
                         Measure of flow for partial
                           unit test (i.e. fan amps)
------------------------------------------------------------------------------------------
Temperature             Plant signal at particulate             Yes             Yes
                         collector inlet and outlet
------------------------------------------------------------------------------------------
Temperature             Full traverse, inlet & outlet           Yes             No
------------------------------------------------------------------------------------------
Duct Gas Velocity       Full traverse, inlet & outlet           Yes             No
------------------------------------------------------------------------------------------
Mercury (total and      Au-CVAAS S-CEM                          Yes             Yes
speciated)
------------------------------------------------------------------------------------------
Mercury (total and      Ontario Hydro, inlet and outlet         Yes (1 set)     No/Yes (2
speciated)                                                                         sets)
------------------------------------------------------------------------------------------
Multi-Metals            Method 29                               Yes, outlet     No/Yes,
Emissions                                                                       outlet
------------------------------------------------------------------------------------------
Sorbent Injection       PLC, lbs/min                            No              Yes
Rate
------------------------------------------------------------------------------------------
Plant CEM data          Plant data - stack)                     Yes             Yes
(Nox3, O2, SO2)
------------------------------------------------------------------------------------------
HC1                     EPA Method      26A                     Yes             Yes
------------------------------------------------------------------------------------------
Stack Opacity           Plant data                              Yes             Yes
------------------------------------------------------------------------------------------
Pollution control       Plant data                              Yes             Yes
 equipment operation     (ESP power, baghouse cleaning, etc.)
------------------------------------------------------------------------------------------

                                        6
</TABLE>
<PAGE>

     Sub-subtask 2.33 Baseline Testing: After equipment installation, a set of
     baseline tests shall be conducted prior to the parametric testing. Unit
     operation shall be set at conditions expected during the parametric tests.
     Boiler load should be held constant at full-load and air pollution
     equipment shall be operated under standard full-load conditions (standard
     soot blowing, ESP rapping sequences, baghouse cleaning logic, spray dryer
     recycle, etc. will be used). Ontario Hydro mercury measurements shall be
     conducted in conjunction with SCEM measurements during this subtask. For
     sites with the ability to co-fire with a blend of bituminous and PRB coals,
     tests shall be conducted to measure the effect of partial co-firing with a
     bituminous coal on both mercury removal and speciation across the
     particulate control devices. Mercury measurements shall be made using only
     the S-CEMs. DOE may request that at least one Ontario-Hydro measurement be
     collected if mercury removal levels increase by more than 25%.

     Sub-subtask 23.4 Parametric Tests: Up to four weeks of parametric testing
     shall be conducted (depending on the host site test plan) to define the
     quality of sorbent required to obtain different levels of mercury removal.
     The first week of parametric testing at each site shall be conducted using
     the benchmark sorbent, FGD in order to develop a performance curve relating
     carbon injection concentration to incremental mercury removal. The second
     week shall be used to evaluate alternate sorbents at injection
     concentrations determined in the week 1 tests. The third and fourth weeks
     shall be used to evaluate additional sorbents, vary operating conditions
     including blended coals, and different injection locations (upstream and
     downstream of spray dryer).

     Sub-subtask 2.3.5 Long-Term Testing: Long-term testing shall be conducted
     at the "optimum" settings as determined in the parametric tests and
     approved by both DOE and the host utility in order to obtain sufficient
     operational data on removal efficiency over a 4 to 8 week period, the
     effects on the particulate control device, the effects on the sulfur
     control equipment, effects on byproducts, and impacts to the balance of
     plant equipment to prove viability of the process and determine the
     economics. The settings Shall represent the maximum mercury removal.
     Ontario Hydro measurements shall be conducted at the inlet and outlet of
     the pollution control device(s) at least once during this testing, and
     possibly more if the results verifying S-CEM measurements during the
     baseline tests are more than 20% different than Ontario-Hydro measurements
     obtained during the same test period.

Subtask 2.4. Data Analysis

Data collection and analysis for this program shall be performed to measure the
effect of sorbent injection on mercury control and the impact on the existing
pollution control equipment. The mercury levels and plant operation shall be
characterized without sorbent injection, during coal blending, with various

                                        7
<PAGE>

injection rates and possible combustion modifications (as defined by the final
test plan), and a long term evaluation to identify effects that may not be
immediate. Archived plant signals shall be monitored to determine if any
correlation exists between changes in mercury concentration with measured plant
operation. One example could be the correlation between temperature and load.
HC1 measurements shall be made and samples analyzed to determine if a
correlation between sorbent effectiveness and HC1 concentrations exist.

Subtask 2.5. Coal and Byproduct Evaluation

During all test phases, samples of coal, fly ash and scrubber waste shall be
collected. The ash shall be analyzed at a minimum for mercury and LOI. Other
potential tests include alkalinity, size distribution and other metals. Ash
shall be collected from multiple locations when appropriate to determine if
there is mercury segregation throughout the system or across the particulate
collector. Ultimate and proximate analyses shall be performed and mercury,
chlorine and sulfur levels shall be determined. Activated carbon injection will
result in the fly ash and scrubber materials being mixed with a certain amount
of the mercury containing sorbent. The combined ash samples shall be analyzed
for mercury and LOI. Scrubber feed limestone, solids product discharge and
blowdown shall also be analyzed for mercury. Additional ash and scrubber samples
shall be collected and archived for other tests, including tests requested by
EPA, DOE, independent companies approved by DOE.

Standard leaching test methods shall include the Toxicity Characteristic Leachin
Procedure (TCLP, SW846-1311) and synthetic groundwater leaching procedure
(SGLP). Analytical tests shall be conducted to determine if the ash at the
Nanticoke and Meramec stations is suitable for use in concrete under ASTM
Specification C618, which include chemical and physical property analysis. Air
entrainment shaker tests shall also be performed as part of the concrete
suitability test series. The final series of tests are optional based on whether
a determination is made that additional analyses are needed for purposes of
troubleshooting or for gaining additional insight into control options. For
example, it may be desirable to determine the size and composition of the ash
for certain applications.

                                        8
<PAGE>

Ash Sampling Method

Grab samples of ash shall be collected from control device hoppers each day of
testing. Samples shall be segregated by the test condition (baselines each
parametric test, and long-term test). The samples shall be stored in 1 liter or
5 gallon sample containers for shipping to the analytical laboratories. Sampling
and compositing procedures shall follow the protocol of ASTM C311 (Standard Test
Methods for Sampling and Testing Fly Ash or Natural Pozzolans for Use as a
Mineral Admixture in Portland-Cement Concrete).

Summary of Tests Planned

ADA-ES shall contract with qualified analytical organizations to provide
specific analytical services specified in Table 4 (testing to be conducted under
Task 2.5) and Table 5 (sampling frequency and total volume of samples to be
collected from each site).

<TABLE>
<CAPTION>

                                 Table 4. Summary of Waste Characterization Testing

-----------------------------------------------------------------------------------------------------------------
Series      Test Purpose                 Test Method                     Comments
  s
-----------------------------------------------------------------------------------------------------------------
<S>         <C>                          <C>                             <C>
1           Ash Disposal                 TCLP (SW846-1311)               Measures leachable Hg, As, Ba, Cd,
                                                                         Cr, Pb, Se, Ag
-----------------------------------------------------------------------------------------------------------------
2           Cement Additive              ASTM C618                       Measures LOI, total oxides, sulfur
            Suitability                  Air Entrainment Shaker          trioxide, moisture, available alkalines,
                                         Test                            fineness, pozzolanic activity,
                                                                         autoclave soundness, specific gravity,
                                                                         air entrainment
-----------------------------------------------------------------------------------------------------------------
3           Environmental                EERC SGLP                       Measures leachable Hg at 18 hrs,
            Stability - Leaching                                         2 weeks, and 4 weeks

            Environmental                EERC Thermal                    Measures Hg release as a function of
            Stability - Air Release      Desorption                      temperature up to 500 degrees C
-----------------------------------------------------------------------------------------------------------------
4           Special Testing              Various                         As needed for troubleshooting or site
                                                                         specific information needs
-----------------------------------------------------------------------------------------------------------------

                                        9
</TABLE>
<PAGE>

          Table 5. Ash Sampling Schedule and Volumes - Each Test Site

--------------------------------------------------------------------------------
Test Condition                Frequency                   Comments
--------------------------------------------------------------------------------
Baseline              Grab samples Daily during tests     ~30-gal. sample
--------------------------------------------------------------------------------
Parametric Test #1    Grab Samples Daily for l-week       ~10-gal. total sample
--------------------------------------------------------------------------------
Parametric Test #2    Grab Samples Daily for 1-week       ~10-gal. total sample
--------------------------------------------------------------------------------
Parametric Test #3    Grab Samples Daily for 1-week       ~10-gal. total sample
--------------------------------------------------------------------------------
Long-term Test        Grab Samples Daily for 2-week       ~200-gal. total sample
--------------------------------------------------------------------------------

Subtask 2.6. Design and Economics of Site-Specific Control System

After completion of testing and analysis of the data at each plant, the
requirements and costs for full-scale permanent commercial implementation of the
selected mercury control technology shall be determined. The ADA-ES program team
shall meet with the host utility plant and engineering personnel to develop
plant specific design criteria. Process equipment shall be sized and designed
based on test results and the plan specific requirements (reagent storage
capacity, plant arrangement, retrofit issues, winterization, controls interface,
etc.). A conceptual design document shall be developed. Modifications to
existing plant equipment shall be determined and a work scope document shall be
developed based on input from the plant. This may include modifications to the
particulate collector, ash handling system, compressed air supply, electric
power capacity, other plant auxiliary equipment, utilities and other balance of
plant engineering requirements. Sorbent type and sources shall be evaluated to
determine the most cost effective reagent(s) for the site. Cost
credits/penalties for fly ash liability shall be estimated. Finally, a budget
cost estimate shall be developed to implement the control technology. This shall
include capital cost estimates for mercury control process equipment as well as
projected annual operating costs, Where possible, order-of-magnitude estimates
shall be included for plant modifications and balance of p1ant items. ALSTOM
shall provide levelized economics for this evaluation.

                                       10
<PAGE>

Subtask 2.7. Prepare Site Report

A site report shall be prepared documenting measurements, test procedures,
analyses, and results obtained in Task 2. This report shall be a stand-alone
document providing a
comprehensive review of the testing that shall be submitted to the host utility.

Task 3. Technology Transfer

ADA-ES and ALSTOM shall work with NETL in determining and supporting the key
meetings, presentations and publications necessary to make results available to
the public as quickly, comprehensively and accurately as possible. Additionally,
the participant shall attend and present project results at a minimum of three
mercury-control technology symposiums identified in collaboration with the DOE
COR.

Task 4. Program Management and Reporting

In addition to the standard financial and technical reports, ADA-ES shall
prepare topical reports for each site tested, the equipment disposition plan and
the final report. ADA-ES shall also coordinate periodic meetings with the NETL
COR to discuss progress and obtain overall direction of the program.

Subtask 4.1 - EQuipment Disposition Plan

The participant shall prepare a detailed plan for maintaining/disposing of all
project related equipment following the project including the transportable
mercury treatment system consisting of carbon injection equipment, reagent
injection for SO3 control, and controllers. The participant shall maintain
custody until final disposition with the DOE Contracting Office. Site specific
equipment, as described elsewhere, shall remain at the test site unless
otherwise specified by DOE. This shall exclude items that can be reworked for
uses at different sites.

                                       11
<PAGE>

Subtask 4.2- Final Report

The participant shall prepare a final report sixty days after completion of
tasks 1-3. The final report shall summarize the results of all field sites. The
DOE COR will either provide comments and recommended changes or approve as is
within 45 days of receiving the draft report. The participant shall have 30 days
to submit the final version of the final report after receiving the DOE COR
comments or approval.

Table 8 provides a summary of the reporting activities to be conducted under the
program.

        Table 8. Summary of Reporting and Technology Transfer Activities

        ========================================================================
        Activity                        or                              Report
                                                               Frequency
        ------------------------------------------------------------------------
        Program/Project Management
        Federal Assistance Program/Project Status Report       Quarterly
        Financial Status Report                                Quarterly

        Technical
        Technical Progress Report                              Quarterly
        Powerpoint Presentation Update                         Quarterly
        Topical Report                                        As Required
        Final Report                                             Final

        Environmental
        Hazardous Substance Plan                           Once After Award
        Hazardous Waste Report                                   Final

        Property
        Report of Termination or Completion Inventory            Final

        Exception
        Hot Line Report                                       As Required
        Journal Articles/Conference Papers and Proceedings    As Required

        Technical Exchange Meetings
        Contractor Review Meetings                               Yearly
        Technical Conferences (e.g., A&WMA, Specialty          Semiannual
         Conferences)
        ------------------------------------------------------------------------
        Other Deliverables
        Mercury Control Cost Data                                 Final
        ========================================================================

                                       12
<PAGE>

     QA/QC Plan

As part of the proposed scope, Quality Assurance and Quality Control (QA/QC)
shall be documented and specific procedures adhered to. The primary objectives
of the I A/QC effort at each proposed site shall be to control, evaluate, and
document data quality to ensure that data generated are of sufficient quality to
meet program objectives. pecific key parts of the QAIQC plan shall include:

     o    QA/QC in sample collection, analytical and data analysis,
     o    Integral performance evaluation and verification of Hg removal,
     o    Procedural remedies for identified data deficiencies, and
     o    Oversight and documentation of all QA/QC.

Detailed QA/QC plans shall be prepared as part of the detailed test planning wor
to be conducted under Task 2.

     D. DELIVERABLES

     The periodic and final reports shall be submitted as indicated in the
     Financial Assistance Reporting Requirements Checklist and prepared in
     accordanc with the instructions for preparation and submission of said
     reports. In additioi to these reports, the participant shalt prepare the
     following deliverables:

     a.   Final Host Site Test Plan and Program Management Plan as described in
          Subtask 2.1

     b.   Candidate Sorbents (if requested) as described in Sub-subtask 2.3.1

     c.   Economic Analysis as described in Subtask 2.6

     d.   Host Site Field Test Topical Reports as described in Subtask 2.7

     e.   Symposium Technical Papers as described in Task 3

     f.   Equipment Disposition Plan as described in Subtask 4.1

     g.   Final Report as described in Subtask 4.2

     h.   QA/QC Plan as described in Task 4

                                       13
<PAGE>

     E. BRIEFINGS/TECNICAL PRESENTATIONS

     ADA-ES shall be asked to prepare and present at least one annual detailed
     briefing for presentation to the COR at the COR's facility located in
     Pittsburgh, PA or Morgantown, WV. Briefings shall cover the plans,
     progress, and results o the technical effort. In addition, ADA-ES shall
     provide and present technical papers at any DOE/NETL Annual Contractor's
     Review Meeting.

                                       14
<PAGE>
<TABLE>
<CAPTION>

                                           4.3 ATTACHMENT B - FEDERAL ASSIATANCE REPORTING CHECKLIST

                                                  FEDERAL ASSISTANCE REPORTING CHECKLIST
-------------------------------------------------------------------------------------------------------------------------------
1.  AWARDEE:                                                            2.  IDENTIFICATION NUMBER:
ADA Environmental Solutions                                             DE - FC 26 - 03NT41986
-------------------------------------------------------------------------------------------------------------------------------
3.  REPORT SUBMITTSION ADDRESS: The requested quantity of all required report deliverables shall be submitted
                                to the following address:
                                                NETL AAD DOCUMENT CONTROL
                                             BLDG. 921U.S. DEPARTMENT OF ENERGY
                                           NATIONAL ENERGY TECHNOLOGY LABORATORY
                                                   P.O. BOX 10940
                                              PITTSBURGH, PA 15236-0940
-------------------------------------------------------------------------------------------------------------------------------
4.  PLANNING AND REPORTING REQUIREMENTS:
-------------------------------------------------------------------------------------------------------------------------------
                                                                        FORM NO.                FREQ.          NUMBER OF COPIES
-------------------------------------------------------------------------------------------------------------------------------
A,  PROGRAM/PROJECT MANAGEMENT

<S>                                                                           <C>
[ ] Federal Assistance Program/Project Status Report                    DOE F 4600.6
[X] Financial Status Report                                             SF-269 or SF-269A       Q, FG                   3
[X] Federal Cash Transaction Report                                     SF-272                  Q                       3

B.  TECHNICAL (One paper copy and one PDF electronic file copy)

[X] Technical Progress Report                                           None                    Q                       2
[X] Topical Report                                                      None                    A                       2
[X] Final Report                                                        None                    FG                      2

C.  ENVIRONMENTAL

[X] Hazardous Substance Plan                                            None                    O, C                    3
[X] Hazardous Waste Report                                              None                    FC                      3
[ ] Environmental Compliance Plan                                       None
[ ] Environmental Monitoring Plan                                       None
[ ] Environmental Status Report                                         None

D.  PROPERTY
                                                                        F 580.1-8
[ ] Annual Report of Property in the Custody of Contractors             F 580, 1-25
[ ] High Risk Property Report                                           NETL F 580.1-9 and
                                                                        SF - 120                FC                      2
[X] Report of Termination or Completion Inventory

E.  EXCEPTION

[ [ Conference Record                                                   None
[X] Hot Line Report                                                     None                    A                       2
[X] Journal Articles/Conference Papers and Proceedings                  None                    A                       3
[ ] Software
[ ] Other_____________________________________
-------------------------------------------------------------------------------------------------------------------------------
5.  FREQUENCY CODES AND DUE DATES:
    A - As required; see attached text for applicability.
    C - Change/revision, within 15 calendar days after event.
    FG - Final; within ninety (90) calendar days after the project period ends.
    FC - Final - End of Effort.
    M - Monthly; within twenty-five (25) calendar days after end of the report period.
    O - Once after award; within thirty (30) calendar days after award.
    Q - Quarterly; within thirty (30) calendar days after end of the calendar quarter or portion thereof.
    S - Semiannually; within thirty (30) calendar days after end of project year and project half-year.
    YF - Yearly; 90 calendar days after the end of project year.
    YP - Yearly Property - due 15 days after period ending 9/30.
-------------------------------------------------------------------------------------------------------------------------------
6.  SPECIAL INSTRUCTIONS:
    The forms identified in the checklist are available at http://www.netl.doe.gov/business/faapiaf/paaforms.html. Alternate
    formats are acceptable provided the contents remain consistent with the form. All technical reports submitted to the DOE
    must be accompanied by a complete and signed NETL F 510.1-5 addressing patent information
-------------------------------------------------------------------------------------------------------------------------------

                                       22
</TABLE>
<PAGE>

4.4  GENERAL INSTRUCTIONS FOR THE PREPARATION AND SUBMISSION OF REPORTS (MAY
     1999)

     The Recipient shall prepare and submit (postage prepaid) the plans and
     reports indicated on the "Federal Assistance Reporting Checklist" to the
     addressee identified on the checklist. The level of detail the Recipient
     provides in the plans and reports shall be commensurate with the scope and
     complexity of the effort and shall be as delineated in the guidelines and
     instructions co tamed herein, The prime Recipient shall be responsible for
     acquiring data from any contractors or subrecipients to ensure that data
     submitted are compatible with the data elements which prime Recipients are
     required to submit to DOE.

4.5  FINANCIAL STATUS REPORT (STANDARD FORM 269 OR 269A) (FEB 2002)

     This report is used for the Recipient to provide regular periodic
     accounting of project funds expended. The accounting may be on either a
     cash or accrual basis. Actual total expenditures and obligations incurred,
     but not paid, are reported for each reporting period for each major
     activity. Provision is made to identify the Federal and non-Federal share
     of project outlays for each identified activity.

4.6  REPORT OF FEDERAL CASH TRANSACTIONS (STANDARD FORM 272) (MAY 1999)

     This report is used by DOE to monitor cash advanced to Recipients and to
     obtain disbursement information. The content of the report is prescribed in
     10 CFR 600.152 for Institutions of higher Education, Hospitals, Other
     Non-Profit Organizations and Commercial Organization or 10 CFR 600.241 for
     States and Local Governments.

4.7  TECHNICAL REPORTS (AUG 2003)

     CAUTION: In order to assure that the technical report deliverables under
     this award are submitted in a publicly releasable form, the following
     guidance shall be followed.

     If this award DOES NOT include Alternate II to FAR 52.227-14, Rights in
     Data-General the Recipient SHALL NOT include Limited Rights Data (as
     defined in FAR 52.227-14) in any report or other document delivered to the
     Government under this award.

     If this award DOES include Alternate 1110 FAR 52.227-14, Rights in
     Data-General, any Limited Rights Data (as defined in FAR 52.227-14) to be
     delivered shall be submitted in a SEPARATE APPENDIX to the technical
     report. This appendix SHALL NOT be submitted in an electronic format but
     rather ONE GOOD QUALITY PAPER COPY SHALL BE SENT DIRECTLY TO THE
     CONTRACTING OFFICER'S REPRESENTATIVE. The appendix SHALL NOT be referenced
     in the sanitized techinical report. In accordance with FAR 52.227-14(g)(2),
     the appendix SHALL be marked ONLY with he authorized legend. A good quality
     paper copy plus an electronic version of the sanitized technical report
     shall be submitted in accordance with the Federal Assistance Reporting
     Checklist. In accord rice with FAR 52.227-14(g)(i). form, fit and function
     data SHALL be supplied in the sanitized report in lieu of any Limited
     Rights Data.

     Further, if this award authorizes the Recipient under the provisions of The
     Energy Policy Act of 1992 (EPAct) to request protection from public
     disclosure for a limited period of time of certain information developed
     under this award, such Protected EPAct Information shall be submitted In
     SEPARATE APPENDIX to the technical report. This appendix shall be suitable
     for release after the agreed upon period of protection from public
     disclosure has expired. The appendix SHALL NOT be submitted in an
     electronic format but rather shall be submitted In ONE GOOD QUALITY PAPER
     COPY SENT DIRECTLY TO THE CONTRAC11NG OFFICER'S REPRESENTATIVE. The
     appendix SHALL NOT be referenced in the sanitized technical report. In
     accordance with the clause titled "Obligations as to Protected Energy
     Policy Act (EPAct) Information," the appendix SHALL be marked ONLY with the

                                       23
<PAGE>

     authorized legend. A good quality paper copy plus an electronic version of
     the sanitized technical report shall be submitted in accordance with the
     Federal Assistance Reporting Checklist.

     All TECHNICAL REPORTS submitted to the DOE MUST be accompanied by a
     completed and signed NETL F 510.1-5, addressing potentially patentable
     information.

4.8  TECHNICAL PROGRESS REPORT (ANNUAL, QUARTERLY, AND SEMI-ANNUAL) (MAY 1999)

     The body of the report should contain a full account of progress, problems
     encountered, plans for the next reporting period, and an assessment of the
     prospects for future progress.

     The Technical Progress Report should Include sufficient detail to allow the
     work to be reproduced by others. Results and reduced data shall be
     presented together with a discussion of the relevance of the findings. When
     experimental systems and/or procedures are being utilized for the first
     time, they shall be described in detail. This description shall contain
     detailed information on equipment and procedures utilized, as well as
     providing a rationale for their use. All data reduction and transformation
     methods shall be fully documented. For every fourth calendar quarter for
     quarterly reports or every second half year for semi-annual reports, the
     report should be expanded to provide for detailed information on the
     results of the past year, problems encountered, significant
     accomplishments, listing of publications, presentations, arid approaches to
     be taken the following year.

     Informational items in technical progress reports shall include:

     Experimental Apparatus -- A comprehensive description, including
     dimensioned drawings or sketches, of the apparatus and associated
     diagnostic measurement equipment employed to perform the experimental
     research.

     Experimental and Operating Data -- All experimental data acquired during
     the course of research including detailed characterization of the sample
     materials subjected to experimentation.

     Data Reduction -- A complete description of the methods employed to
     transform ray measured data into a form usable for interpretation along
     with any assumptions or restrictions inherent in the method and the
     resultant reduced data.

     Hypothesis and Conclusions -- Logic for drawing conclusions or developing
     hypotheses shall be clearly stated along with applicable assumptions or
     restrictions.

4.9  TOPICAL REPORT (MAY 1999)

     These reports usually provide a comprehensive statement of the technical
     result of the work performed for a specific task or subtask of the
     Statement of Project Objectives, or detail significant new scientific or
     technical advances. If required, DOE shall review and approve the report
     outline prior to submission of the report.

4.10 FINAL TECHNiCAL REPORT (AUG 2000)

     The Final Report shall document and summarize all work performed during the
     award period in a comprehensive manner. It shall also present findings
     and/or conclusions produced as a consequence of this work. This report
     shall not merely be a compilation of information contained, in subsequent
     quarterly, or other technical reports, but shall present that information
     in an integrated fashion, and shall be augmented with findings and
     conclusions drawn from the research as a whole.

                                       24
<PAGE>

4.11 GUIDELINES FOR ORGANIZATION OF TECHNiCAL REPORTS (DEC 1999)

     The following sections should be Included (as appropriate) in technical
     reports in the sequence shown. Any section denoted by an asterisk is
     required in all technical reports.

     TITLE PAGE* - The Title Page of the report itself must contain the
     following information in the following sequence:

          Report Title
          Type of Report (Quarterly, Semi-Annual, Annual, Topical, Final)
          Reporting Period Start Date
          Reporting Period End Date
          Principal Author(s)
          Date Report was Issued (Month [spelled out] and Year [4 digits])
          DOE Award Number (e.g., DE-FG26-99NT12345) and if appropriate, task
          number
          Name and Address of Submitting Organization (This section should also
          contain the name and address of significant subcontractors or
          subrecipients who participated in the production of the report.)

     DISCLAIMER" -- The Disclaimer must follow the title page, and must contain
     the following paragraph:

     "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 responsibility for the accuracy,
     completeness, or usefulness of any information, apparatus, product, or
     process disclosed, or represents that 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 o authors expressed herein do not necessarily state or reflect
     those of the United States Government or any agency thereof.

     ABSTRACT* - should be a brief, concise summary of the report.

     TABLE OF CONTENTS*

     LIST(S) OF GRAPHICAL MATERIALS

     INTRODUCTION

     EXECUTIVE SUMMARY - this should be a well organized summary that highlights
     the important accomplishments of the research during the reporting period.
     It should be no less than one page and no more than two pages in length,
     and should be single spaced. This summary must be more comprehensive than
     the traditional "abstract."

     EXPERIMENTAL* - this should describe, or reference all experimental methods
     being used for the research. It should also provide detail about materials
     and equipment being used. Standard methods can be referenced to the
     appropriate literature, where details can be obtained. Equipment should be
     described only if it is not standard, or if information is not available
     thru the literature or other reference publications.

                                       25
<PAGE>

     RESULTS AND DISCUSSION* - It is extremely important that this section
     includes enough relevant data, especially statistical data, to allow the
     project manager to justify the conclusions. With the relevant data, explain
     how the data was interpreted and how it relates to the original purpose of
     the research. Be concise in the discussion on how this research effort
     solved or contributed to solving the original problem.

     CONCLUSION* - The conclusion should not simply reiterate what was already
     included in the "Results and Discussion" section. It should, however,
     summarize what has already been presented, and include any logical
     implications of how the successes are relevant to technology development in
     the future, This is extremely important, since "relevancy" continues to be
     a criterion of the program.

     REFERENCES*
     BIBLIOGRAPHY
     LIST OF ACRONYMS AND ABBREVIATIONS
     APPENDICES (IF NECESSARY)

     Company Names and Logos -- Except as indicated above, company names, logos,
     or similar material should not be incorporated into reports.

     Copyrighted Material -- Copyrighted material should not be submitted as
     part of a report unless written authorization to use such material is
     received from the copyright owner and is submitted to DOE with the report.

     Measurement Units -- All reports to be delivered under this instrument
     shall use the 1 Metric System of Units as the primary units of measure.
     When reporting units in all reports primary SI units shall be followed by
     their U.S. Customary Equivalents in parentheses (),

     The Recipient shall insert the text of this clause, including this
     paragraph, in all subcontracts under this award.

     Note: SI is an abbreviation for "Le Systeme International d'Unites."

4.12 ELECTRONIC MEDIA STANDARD FOR PREPARATION OF TECHNICAL REPORTS (DEC 1999)

     FILE FORMAT

     Production of high-quality, electronic documents is dependent on the
     quality of the in input that is provided. Thus, the Recipient shall submit
     one good quality paper copy using either permanent or alkaline paper plus
     an electronic version of each technical report.

     ELECTRONIC REPORTS SHALL BE SUBMITTED IN THE ADOBE ACROBAT P0RTABLE
     DOCUMENT FORMAT (PDF). ELECTRONIC REPORTS SUBMITTED IN A FORMAT OTHER THAN
     ADOBE WILL BE RETURNED AND THE REPORT CONSIDERED DELINQUENT.

     Each report shall be an integrated file that contains all text, tables,
     diagrams, photographs, schematics, graphs, and charts.

     SUBMISSION FORMAT

     The electronic file(s) shall be submitted via diskette or CD-ROM. Diskettes
     or CD-ROMs must be labeled as follows:

          DOE Award Number
          Type/Frequency of Report(s)
          Reporting Period (if applicable)

                                       26
<PAGE>

          Name of submitting organization
          Name, phone number and fax number of preparer

     Diskettes-- Diskettes must be 3.5" double-sided, high-density (1.4 M Byte
     capacity). If file compression software is used to transmit a PDF file
     spanning more than one diskette, PKZIP from PKWare, Inc., is the required
     compression software. State the number of diskettes in the set (e.g., 1/3)

     CD-ROM -- The electronic file(s) may be submitted on an 1509660-format
     CD-ROM.

     FILE NAMING

     In naming the electronic file, the Recipient shall use the standard
     eight-character naming convention for the main file name, and the three
     character extension applicable to the software use, e.g.. .pdf for Adobe.

     For the main file name, the first five characters are the last five digits
     from the award number; e.g., for Award Number DE-F026-97NT12345, the first
     five characters are 12345.

     The next character represents the technical report and will always be
     designated as "R".

     The remaining two characters indicate the chronological number of the
     particular type of report; e.g., Quarterly Technical Progress Reports for a
     5-year award are numbered R0i through R20. Thus, the main file name for the
     sixth Quarterly Technical Progress Report under Award No. DEFG26-99NT1 2345
     would be I 2345R06.PDF. If monthly, quarterly, annual, and a final
     technical report are required, the numbers would run from ROl through R86
     (60 monthly reports, 20 quarterly reports, 5 annual reports, and 1 final
     report).

4.13 ENVIRONMENTAL (MAR 2003)

     In response, in part, to the requirements of the National Environmental
     Policy Act of 1969 (NEPA), ISO 14001, and other related environmental
     statutes, the National Energy Technology Laboratory (NETL) requires the
     submission of various documents that assess the environmental aspects and
     projected impacts of all of its proposed actions. These documents may
     include the following: (1) Hazardous Substance Plan; (2) Hazardous Waste
     Report; (3) Environmental Compliance Plan: (4) Environmental Monitoring
     Plan; and (5) Environmental Status Reports; and (6) IS0 14001 forms (if
     applicable).

     The environmental information provided in these documents will enable NETL
     to fulfill its responsibilities under NEPA (additional information about
     the requirements of the National Environmental Policy Act can be found in
     the DOE NEPA Compliance Guide and 40 CFR 1021) and to monitor the
     applicant's compliance with other environmental regulations. The
     implementation of any task associated with a proposed action will be
     dependent upon DOE submitting and acquiring approval of necessary NEPA
     documentation. Therefore, to minimize the risk of project delays, it is
     imperative that these reports be submitted in a timely mariner.

     The information contained herein specifies the basic environmental
     requirements for this procurement action, but it is riot to be interpreted
     as containing all necessary information for any given project. Likewise,
     certain aspects of the requirements may not be applicable. Accordingly, the
     level of information provided should be sufficient for DOE to assess the
     environmental implications of the proposed action,

4.14 HAZARDOUS SUBSTANCE PLAN (MAY 1999)

     The Recipient shall submit a Hazardous Substance Plan not later than thirty
     (30) days after initial award. The Plan shall specifically identify each
     Hazardous Substance (as defined under 40 CFR 261, Subpart D, entitled Lists

                                       27
<PAGE>

     of Hazardous Wastes") anticipated to be purchased, Utilized or generated in
     the performance of this award For each such Hazardous Substance identified,
     the Plan shall specifically provide the following information:

     Description of Substance/Chemical
     EPA Hazardous Waste Number
     EPA Hazard Code
     Anticipated Quantity to be purchased, utilized or generated
     Anticipated Hazardous Waste Transporter
     Anticipated Hazardous Waste Disposal Facility Contractor and Location
     (City/Municlpality,State)
     Anticipated Treatment Method

4.15 HAZARDOUS WASTE REPORT (MAY 1999)

     The Recipient shall submit a Hazardous Waste Report at the completion of
     award performance. The Report shall specifically identify each Hazardous
     Waste (as defined under 40 CFR 261. Subpart D, entitled "Lists of Hazardous
     Wastes") actually utilized, or generated in the performance of this award.
     For each such Hazardous Waste identified, the Report shall specifically
     provide the following information:

     Description of Substance/Chemical
     EPA Hazardous Waste Number
     EPA Hazard Code
     Actual Quantity Disposed
     Actual Hazardous Waste Transporter
     Actual Hazardous Waste Disposal Facility Contractor and Location
     (City/Municipality, State)
     Actual Disposal Date
     Actual Treatment Method

     The Hazardous Waste Report is intended as a final reconciliation of
     anticipated versus actual Hazardous Substances purchased, utilized, or
     generated in the performance of this award.

4.16 PROPERTY REPORTS (DEC 1999)

     The NETL Property Handbook entitled "Management of Government Property in
     the Possession of Contractors," contains forms, instructions, and suggested
     formats for submission of property reports. This handbook can be found at
     http://www.netl.doe.gov/business/index.html.

4.17 REPORT OF TERMINATION OR COMPLETION INVENTORY (NETL F 580.1-9 AND SF-120)
     (SEPT 2000)

     This report submitted on the NETL F 580.1-9 is due immediately upon
     completion or termination of the award. The SF-120 is also required if
     there is Government-furnished property involved. The Recipient is required
     to perform and cause each subcontractor to perform a physical inventory,
     adequate for disposal purposes, of all Government property applicable to
     the award.

4.18 HOT LINE REPORT (MAR 2002)

     The "Hot Line Report" may be used to report a major break through in
     research, development, or o design; an event causing a significant schedule
     slippage or cost growth; an environmental, safety and health violation;
     achievement of or failure to achieve an important technical objective; or
     any requirement for quickly documented direction or redirection. The report
     shall be submitted by the most rapid means available, usually electronic,
     and should confirm telephone conversations with DOE representatives.
     Identification as a "Hot Line Report" Serves notice at each link in the
     delivery chain that expedition in handling is required. Unless otherwise
     agreed by the parties involved, DOE is expected to take action and respond
     in a similarly timely manner. The report should include:

                                       28
<PAGE>

     1.   Recipient's name and address;
     2.   Award title and number;
     3.   Date;
     4.   Brief statement of problem or event;
     5.   Anticipated impacts; and
     6.   Corrective action taken or recommended.

     Hot line reports shall document the incidents listed below:

     1.   Any single fatality or injuries requiring hospitalization of fIve or
          more individuals is to be immediately reported.

     2.   Any significant environmental permit violation is to be reported as
          soon as possible, but within 24 hours of the discovery of the
          incident.

     3.   Other incidents that have the potential for high visibility in the
          media are to be reported as quickly as possible, but within 24 hours
          following discovery.

     4.   Any failure resulting in damage to Government-owned equipment in
          excess of $50,000 is to be reported as quickly as possible, but within
          24 hours of the discovery of the failure.

     5.   Any unplanned event which is anticipated to cause a schedule slippage
          or cost increase significant to the project is to be reported within
          24 hours.

     6.   Any verbal or written Notice of Violation of any Environmental,
          Safety, and Health statutes arising from the performance of this award
          is to be immediately reported.

     7.   Any accidental spill or release which is in violation of any
          Environmental, Safety, and Health statutes arising from the
          performance of this award is to be immediately reported, but within 24
          hours of the discovery of the accident.

     8.   Any incident which causes a significant process or hazard control
          system failure, or is indicative of one which may lead to any of the
          above defined incidents, is to be reported as soon as possible, but
          within 5 days of discovery.

     The requirement to submit Hot Line Reports for the incidents identified in
     1, 2, 3, 6, or 7 is for the sole purpose of enabling DOE officials to
     respond to questions relating to such events from the media and other
     public.

     When an incident is reported in accordance with4, 5, 6, 7, or 8, the
     Recipient shall conduct an investigation of its cause and make an
     assessment of the adequacy of resultant action, A written report is
     required no later than ten (10) calendar days following the incident and
     shall include an analysis of the pertinent facts regarding the cause and a
     schedule of the remedial events and lime periods necessary to correct the
     action.

     When an event results in the need to issue a written or verbal statement to
     the local media, the statement is to be cleared first; if possible, and
     coordinated with NETL's Office of P4iblic Affairs, the Contracting Officer
     Representative (COR) and the Contracting Officer.

4.19 JOURNAL ARTICLES. CONFERENCE PAPERS AND PROCEEDINGS GENERATED BY A SMALL
     BUSINESS OR NONPROFIT ORGANIZATION FOR DOE REVIEW (SEPT 2000)

     The Recipient shall submit to DOE for review and approval all documents
     generated by the Recipient, or any subcontractor, which communicate the
     results of scientific or technical work supported by DOE under this award,

                                       29
<PAGE>

     whether or not specifically identified in the award, prior to submission
     for publication, announcement, or presentation. Such documents include
     journal articles, conference papers and proceedings, etc. Each such
     document shall be accompanied by a properly completed NETL Form 510.1-5,
     "Request for Patent Clearance for Release of Contracted Research
     Documents."

     The Recipient shall submit a draft version of the document to the COR prior
     to the publication, presentation, or announcement. The COR shall review the
     draft version of the document and notify the Recipient of approval or
     recommended changes. The final version, along with a completed NETL Form
     510.1-5, shall be submitted to the NETL AAD Document Control Coordinator.

     The following information shall be provided for conference papers and
     proceedings, etc.

         --Name of conference
         --Location of conference (city, state, and country)
         --Date of conference (month/day/year)
         --Conference sponsor

                                       30
<PAGE>

4.20 ATTACHMENT C-- BUDGET PAGE (S)

                                       31
<PAGE>

4.21 RECIPIENT ACQUIRED PROPERTY

All Mercury analyzer components and ACI system components installed at all 4
host sites, as follows:

Holcomb Plant:
        Hg Analyzer components           $147,030
        ACI System                       $346,831
        Norit Sorbent costs              $180,339

Nanticoke Plant:
        Hg Analyzer components           $ 96,515
        ACI System                       $358,922
        Norit Sorbent costs              $206,140

Ameren-Meramec:
        Hg Analyzer Components           $ 95,515
        ACI System                       $358,088
        Norit Sorbent costs              $104,221

AEP-Conesville:
        Hg Analyzer components           $ 96,514
        ACI System                       $341,631
        Norit Sorbent Costs              $298,537

                                       32
<PAGE>
<TABLE>
<CAPTION>

                                                     U.S. DEPARTMENT OF ENERGY

                                              Federal Assistance Budget Information

                                                 OMB Burden Disclosure Statement

Public reporting burden for this collection of information is estimated to average 1.87 hours per response, including the time
for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing
the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to Office of Information Resources Management, AD-241.2 - GTN, Paperwork Reduction
Project (1910-0400), U.S. Department of Energy, 1000 Independence Avenue, S.W., Washington, DC 20585; and to the Office of
Management and Budget (OMB), Paperwork Reduction Project (1910-0400), Washington, DC 20503.
------------------------------------------------------------------------------------------------------------------------------------
<C>                                                                       <C>
1.  Program/Project Identification No.                                    2.  Program/Project Title
                                                                          Evaluation of Sorbent Injection for Mercury Control
------------------------------------------------------------------------------------------------------------------------------------
3.  Name and Address                                                                    4.  Program/Project Start Date
ADA Environmental Solutions                                                             October 1, 2003
8100 SouthPark Way, Unit B                                                              --------------------------------------------
Littleton, CO 80120                                                                     5.  Completion Date
                                                                                        December 31, 2006
------------------------------------------------------------------------------------------------------------------------------------
                                                    SECTION A - BUDGET SUMMARY
------------------------------------------------------------------------------------------------------------------------------------
Grant Program
  Function              Federal         Estimated Unobligated Funds                             New or Revised Budget
  Activity             Catalog No.    ----------------------------------------------------------------------------------------------
   (a)                   (b)             Federal        Non-Federal                   Federal        Nono-Federal          Total
------------------------------------------------------------------------------------------------------------------------------------
1.                      81-089                                                       6,000,000        2,773,787          8,773,787
------------------------------------------------------------------------------------------------------------------------------------
2.
------------------------------------------------------------------------------------------------------------------------------------
3.
------------------------------------------------------------------------------------------------------------------------------------
4.
------------------------------------------------------------------------------------------------------------------------------------
5.  TOTALS                                  $               $                       $6,000,000       $2,773,787         $8,773,787
------------------------------------------------------------------------------------------------------------------------------------
                                                   SECTION B - BUDGET CATEGORIES
------------------------------------------------------------------------------------------------------------------------------------
                                                  Grant Program, Function or Activity
6.  Object Class Categories                                                                                             Total
                             ----------------------------------------------------------------------------                (5)
                                (1)             (2)             (3)             (4)
------------------------------------------------------------------------------------------------------------------------------------
a.  Personnel                   $595,625        $               $               $                                       $595,625
------------------------------------------------------------------------------------------------------------------------------------
b.  Fringe Benefts              included in                                                                             included in
                                    j below                                                                                 j below
------------------------------------------------------------------------------------------------------------------------------------
c.  Travel                       235,353                                                                                 235,353
------------------------------------------------------------------------------------------------------------------------------------
d.  Equipment                          0                                                                                       0
------------------------------------------------------------------------------------------------------------------------------------
e.  Supplies                   2,634,983                                                                               2,634,983
------------------------------------------------------------------------------------------------------------------------------------
f.  Contractual                1,108,626                                                                               1,108,626
------------------------------------------------------------------------------------------------------------------------------------
g.  Construction                       0                                                                                       0
------------------------------------------------------------------------------------------------------------------------------------
h.  Other                        751,210                                                                                 751,210
------------------------------------------------------------------------------------------------------------------------------------
i.  Total Direct Charges       5,325,797                                                                               5,325,797
------------------------------------------------------------------------------------------------------------------------------------
j.  Indirect Charges           3,447,990                                                                               3,447,990
------------------------------------------------------------------------------------------------------------------------------------
k.  TOTALS                    $8,773,787        $               $               $                                     $8,773,787
------------------------------------------------------------------------------------------------------------------------------------
7.  Program Income                    $0        $               $               $                                             $0
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>EXHIBIT 4

EXHIBIT 4.2

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “ACT”) OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE OR UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SAID ACT.

VALIDIAN CORPORATION

Form Of

Warrant To Purchase Common Stock

Warrant No.:  _____

Number of Warrant Shares: _________

Series E

Date of Issuance: May 31, 2003

Validian Corporation, a Nevada corporation (the "Company"), hereby certifies that, for value received, _________________ (the “Holder”) is entitled, subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined herein) ____________ (___________) fully paid nonassessable shares of Common Stock (as defined in Section 1(b)) of the Company (the "Warrant Shares") at the purchase price per share provided in Section 1(b) below (the "Exercise Price"); provided, however, that in no event shall the Holder be entitled to exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant Shares which, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates to exceed 4.99% of the outstanding shares of the Common Stock following such exercise.  For purposes of the foregoing proviso, the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such proviso is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised Warrants beneficially owned by the Holder and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Holder and its affiliates (including, without limitation, any convertible notes, convertible preferred stock, warrants or rights to receive shares of Common Stock) subject to a limitation on conversion or exercise analogous to the limitation contained herein.  Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.  The Holder may waive the foregoing limitations by written notice to the Company upon not less than 61 days prior notice (with such waiver taking effect only upon the expiration of such 61 day notice period).

Section 1.

 (a)

Definitions.  The following words and terms as used in this Warrant shall have the following meanings:

"Business Day" means any day except Saturday, Sunday and any day which is designated in the State of New York as a legal holiday or a day on which banking institutions are authorized or legally required or other government action to close.

"Closing Bid Price" means, for any security as of any date, the last closing bid price for such security on The Nasdaq SmallCap Market as reported by Bloomberg Financial Markets ("Bloomberg"), or, if The Nasdaq SmallCap Market is not the principal trading market for such security, the last closing bid price of such security on a Subsequent Market (as defined below) on which such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the "pink sheets" by the National Quotation Bureau, Inc.  If the Closing Bid Price cannot be calculated for such security on such date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holders the Common Stock Warrants.  If the Company and the Holders of the Common Stock Warrants are unable to agree upon the fair market value of the Common Stock, then such dispute shall be resolved pursuant to Section 2(a) of this Warrant with the term "Closing Bid Price" being substituted for the term "Market Price."  (All such determinations to be appropriately adjusted for any stock dividend, stock split or other similar transaction during such period).

"Common Stock" means the Company's common stock, par value $.001 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

"Common Stock Deemed Outstanding" means, at any given time, the number of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be outstanding pursuant to Section 8 or Convertible Securities (as defined in Section 8) are actually exercisable or convertible at such time, but excluding any shares of Common Stock issuable upon exercise of the Common Stock Warrants.

“Escrow Agent” means Alan R. Turem, P.C. having an office at 4651 Roswell Road, Suite B-105 Atlanta, Georgia 30342.

"Exercise Price" shall be $0.33, subject to adjustment as hereinafter provided.

"Expiration Date" means December 31, 2007.

"Other Securities" means (i) those securities, convertible securities, options and warrants of the Company issued prior to, and outstanding on, the date of issuance of this Warrant, (ii) shares of Common Stock, and warrants or other securities that are convertible into or exchangeable for shares of Common Stock, issuable in connection with the subsequent acquisitions by the Company.

"Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, a government or any department or agency thereof, or any other entity or organization.

"Securities Act" means the Securities Act of 1933, as amended.

 "Warrant" means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.

“Warrant Shares” means the shares of Common Stock issuable upon the exercise of this Warrant.

(b)

Other Definitional Provisions.

(i)

Except as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company's successors and (B) to any applicable law defined or referred to herein, shall be deemed references to such applicable law as the same may have been or may be amended or supplemented from time to time.

(ii)

When used in this Warrant, the words "herein," "hereof," and "hereunder," and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words "Section," "Schedule," and "Exhibit" shall refer to Sections of, and Schedules and Exhibits to, this Warrant unless otherwise specified.

(iii)

Whenever the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural, and vice versa.

Section 2.

Exercise of Warrant.

(a)

Exercise may be done at any time during normal business hours on any business day on or after the opening of business on the date hereof and prior to 11:59 P.M. Eastern Time on the Expiration Date by delivery to the Escrow Agent and the Company in the manner specified below of (i) a written notice of such Holder's election to exercise this Warrant which notice shall be in the form attached as Exhibit A hereto, (the “Exercise Notice”), and shall specify the number of Warrant Shares to be purchased and the other information set out therein, (ii) payment to the Company of an amount equal to the Exercise Price multiplied by the number of Warrant Shares as to which the Warrant is being exercised (the "Aggregate Exercise Price") in cash or by check or wire transfer payable to the Company in immediately available funds, and (iii) the surrender of this Warrant.  Provided, that if such Warrant Shares are to be issued in any name other than that of the registered Holder of this Warrant, such issuance shall be deemed a transfer and the provisions of Section 7 shall be applicable and the Exercise Notice shall be accompanied by such additional documentation as may be required by that Section.  Such Exercise Notice, payment, Warrant and other documentation required for exercise shall be delivered to the Escrow Agent at the address set out in Section 1 with a copy of the Exercise Notice being delivered simultaneously to the Company. 

(b)

In the event of any exercise of the rights represented by this Warrant in compliance with this Section 2(a), a certificate or certificates for the Warrant Shares so purchased, in such denominations as may be requested by the Holder hereof and registered in the name of, or as directed by, the Holder, shall be delivered at the Company's expense to, or as directed by, such Holder as soon as practicable after such rights shall have been so exercised, and in any event no later than five (5) business days after delivery of the Exercise Notice to the Escrow Agent.  In the case of a dispute as to the determination of the Exercise Price of a security or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of shares of Common Stock that is not disputed and shall submit the disputed determinations or arithmetic calculations to the Holder via facsimile within one business day of receipt of the Holder's subscription notice.  If the Holder and the Company are unable to agree upon the determination of the Exercise Price or arithmetic calculation of the Warrant Shares within one day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall immediately submit via facsimile (i) the disputed determination of the Exercise Price to an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its independent, outside accountant.  The Company shall cause the investment banking firm or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than two (2) Business Days from receipt of the disputed determinations or calculations.  Such investment banking firm's or accountant's determination or calculation, as the case may be, shall be deemed conclusive absent manifest error.

(c)

Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in no event later than five business days after any exercise and at its own expense, issue a new Warrant identical in all respects to the Warrant exercised except (i) it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such exercise under the Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised, and (ii) the Holder thereof shall be deemed for all corporate purposes to have become the Holder of record of such Warrant Shares immediately prior to the close of business on the date on which the Warrant is surrendered and payment of the amount due in respect of such exercise and any applicable taxes is made, irrespective of the date of delivery of certificates evidencing such Warrant Shares, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are properly closed, such person shall be deemed to have become the Holder of such Warrant Shares at the opening of business on the next succeeding date on which the stock transfer books are open.

(d)

No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock issued upon exercise of this Warrant shall be rounded up or down to the nearest whole number.

Section 3.

Covenants as to Common Stock; Certain Registrations.  The Company hereby covenants and agrees as follows:

(a)

This Warrant is, and any Common Stock Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued.

(b)

All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.

(c)

During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Exercise Price.

(d)

The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant.  Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

(e)

This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets.

Section 4.

Taxes.  The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. 

Section 5.

Warrant Holder Deemed Not a Stock Holder.  Except as otherwise specifically provided herein, no Holder, as such, of this Warrant shall be entitled to vote or receive dividends or be deemed the Holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such Holder to purchase any securities or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 5, the Company will provide the Holder of this Warrant with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

Section 6.

Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment and not with a view to, or for sale in connection with, any distribution hereof or of any of the shares of Common Stock or other securities issuable upon the exercise thereof, and not with any present intention of distributing any of the same.  The holder of this Warrant further represents, by acceptance hereof, that, as of this date, such holder is an accredited investor as such term is defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an "Accredited Investor").  Upon exercise of this Warrant, the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale other than pursuant to an effective registration statement or an exemption under the Securities Act and that such holder is an Accredited Investor.  Notwithstanding the foregoing, by making the representations herein, the holder does not agree to hold the Warrant or the Warrant Shares for any minimum or other specified term and reserves the right to dispose of the Warrant and the Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.  If such holder cannot make such representations because they would be factually incorrect, it shall be a condition to such holder's exercise of the Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon exercise of the Warrant shall not violate any United States or state securities laws.

Section 7.

Ownership and Transfer.

(a)

The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee.  The Company may treat the person in whose name any Warrant is registered on the register as the owner and Holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant.

(b)

The Holder of this Warrant understands that this Warrant has not been and is not expected to be, registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (a) subsequently registered thereunder, or (b) such Holder shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration; provided that (i) any sale of such securities made in reliance on Rule 144 promulgated under the Securities Act may be made only in accordance with 

the terms of said Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder; and (ii) except as provided below, neither the Company nor any other person is under any obligation to register the Common Stock Warrants under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder except as may be expressly set out herein.

(c)

The Company is obligated to register the Warrant Shares for resale under the Securities Act and the Holder of this Warrant is not entitled to the registration rights in respect of the Warrant Shares, unless and until the Company enters into a Registration Rights Agreement with the Holder of these Warrants, at the sole discretion of the Company.

Section 8.

Adjustment of Exercise Price and Number of Shares.  In order to prevent dilution of the rights granted under this Warrant, the Exercise Price and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time as follows:

(a)

Adjustment of Exercise Price upon Subdivision or Combination of Common Stock.  If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased.  If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately decreased.

(b) 

Reorganization, Reclassification, Consolidation, Merger or Sale.  Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company's assets to another Person (as defined below) or other transaction which is effected in such a way that Holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as "Organic Change."  Prior to the consummation of any Organic Change, the Company will make appropriate provision (in form and substance satisfactory to the Holders of the Common Stock Warrants representing a majority of the shares of Common Stock issuable upon exercise of such Common Stock Warrants then outstanding) to ensure that each of the Holders of the Common Stock Warrants will thereafter have the right to acquire and receive in lieu of or addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of such Holder's Common Stock Warrants, such shares of stock, securities or assets as may be issued or payable in the Organic Change with respect to or in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of such Holder's Common Stock Warrants had such Organic Change not taken place (without taking into account any limitations or restrictions on exercise).  In any such case, the Company will make appropriate provision (in form and substance satisfactory to the Holders of the Common Stock Warrants representing a majority of the shares of Common Stock issuable upon exercise of such Common Stock Warrants then outstanding) with respect to such Holders' rights and interests to insure that the provisions of this Section 8 and Section 9 will thereafter be applicable to the Common Stock Warrants (including, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Company, an immediate adjustment of the Exercise Price to the value for 

the Common Stock reflected by the terms of such consolidation, merger or sale, and a corresponding immediate adjustment in the number of shares of shares of Common Stock acquirable and receivable upon exercise of the Common Stock Warrants, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger or sale).  The terms of any documents evidencing an Organic Change shall include such terms as to give effect to the tenor of this provision and evidencing  the obligation to deliver to each Holder of Common Stock Warrants such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to acquire.

(c) 

Distribution of Assets.  If the Company shall declare or make any distribution of its assets (or rights to acquire its assets) to Holders of Common Stock as a partial liquidating dividend, by way or return of capital or otherwise (including any dividend or distribution to the Company's stockholders of cash or shares (or rights to acquire shares) of capital stock of a subsidiary) (a "Distribution"), at any time after the issuance of this Warrant, then the Holder of this Warrant shall be entitled upon exercise of this Warrant for the purchase of any or all of the shares of Common Stock subject hereto, after the record date for determining shareholders entitled to receive such Distribution, to receive the amount of such assets (or rights) which would have been payable to the Holder had such Holder been the Holder of such shares of Common Stock on the record date for determination of stockholders entitled to such Distribution.

(d)

Notices.

(i)

Immediately upon any adjustment of the Exercise Price, the Company will give written notice thereof to the Holder of this Warrant, setting forth in reasonable detail and certifying the calculation of such adjustment.

(ii)

The Company will give written notice to the Holder of this Warrant at least twenty (20) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to Holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change, dissolution or liquidation and in no event shall such notice be provided to such Holder prior to such information being made known to the public.

(iii)

The Company will also give written notice to the Holder of this Warrant at least twenty (20) days prior to the date on which any Organic Change, dissolution or liquidation will take place and in no event shall such notice be provided to such Holder prior to such information being made known to the public.

Section 9.

Lost, Stolen, Mutilated or Destroyed Warrant.  If this Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt of an indemnification undertaking, issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.

Section 10.

Notice.  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) upon receipt, when delivered by a delivery service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

If to the Company:

Validian Corporation

4651 Roswell Road, suite B-106

Atlanta, Georgia 30342

Telephone:

(404) 256-1963

Telefax:

(404) 256-2500

Attention:

 Andre Maisonneuve

Chairman, President, Chief Executive Officer and

Chief Financial Officer

If to the Holder of this Warrant: 

Echo Technologies S.A., 

297 route de St-Cergue, 1260 Nyon

Switzerland

Telephone:

+41 22 362 70 30

Attention:

Henrik Olsen, President

Each party shall provide five days' prior written notice to the other party of any change in address or facsimile number.

Section 11.

Miscellaneous.  

(a)

No Voting Rights; Limitation of Liability - Prior to exercise, this Warrant will not entitle the Holder to any voting rights or other rights as a stockholder of the Company.  No provision hereof, in the absence of affirmative action by the Holder to exercise this Warrant, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of the Warrant Shares pursuant to the exercise hereof.

(b)

 Waiver and Modification This Warrant and any term hereof may be changed, waived, discharged, or terminated only by an instrument in writing signed by the party or Holder hereof against which enforcement of such change, waiver, discharge or termination is sought.  

(c)

Headings - The headings in this Warrant are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.  

(d)

Governing Law - THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA. The Holder hereby submits to the jurisdiction of the State of Georgia and agrees that service of all writs, process and summonses in any such suit, action or proceeding brought in the United States against the Company may be made upon the Escrow Agent and shall be governed by and interpreted under the laws of the State of Georgia without regard to principles of conflicts of law thereof.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its duly authorized officer as of the date first indicated above.

VALIDIAN CORPORATION

By:  /s/ Andre Maisonneuve 

Name:  Andre Maisonneuve

Title: Chairman, President,

Chief Executive Officer and

Chief Financial Officer

Series E Warrant Holders

Echo Technologies S.A.

1,635,000

Andre Maisonneuve

   520,000

Total

2,155,000

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