(HOLTER TECHNOLOGIES LETTERHEAD OMITTED)


                        EXCLUSIVE DISTRIBUTION AGREEMENT

                       "UV systems for water disinfection"

         Between:

         Laboratory of Impulse Technique  (L.I.T.) ZAO., a company organized and
         existing under the laws of Russia and having its  registered  office at
         9, Institutskiy Per, Dolgoprudny, Moscow Region, Russia 141700, and its
         principal  place of business  at 44,  Krasnobogatyrskaya  Str.,  Moscow
         107076, Russia, in the person of Director Mr. S. Kostiouchenko,  acting
         on the basis of the power of Attorney  No.98-10-20-1  dd. 20.10.1998 on
         the one party hereinafter called "LIT,

         and

         PHILAQUA  Aufbereitungstechnik  GmbH, a company  organized and existing
         under the laws of  Germany  and having its  offices  at,  Beisenstrasse
         39-41,  D-45964 Gladbeck,  Germany, in the person of the Director Prof.
         Dr. H. Holler and Director Dr. O.  Leitzke,  acting on the basis of the
         Statutes  of  the  company,  on the  other  party,  hereinafter  called
         "PHILAQUA".

         Hereafter  respectively or together called as the context  requires the
         "Party/Parties".


                                       1
<PAGE>


         ARTICLE 1 - DEFINITIONS

         In this  Agreement,  the  following  terms  shall  bear  the  following
         meanings Unless the context clearly indicates otherwise:

         1.1.  "Territory" means world regions where the terms of this exclusive
         Agreement  are valid and  which  are  specified  in the Annex 1 to this
         Agreement.  The  Territory  contents  are  subject to change by written
         approval of both Parties.

         1.2.  "Products" means those UV-based water treatment devices as listed
         in Annex 2 of this  Agreement  and such other  products the Parties may
         from time to time decide upon prior written approval. Such decision may
         only be evidenced by express  written  agreement  duly  executed by the
         Parties.  1.3.  ,,Trademarks" means registered under the name of LIT or
         PHILAQUA  trademarks  which  are  agreed  to b8 used  for the  Products
         according to the terms of this Agreement.

         ARTICLE 2. PURPOSE OF THE AGREEMENT AND REPRESENTATION

         2.1.  PHILAQUA hereby agrees to procure  Products  exclusively from LIT
         and to take delivery of tile  Products  from LIT and to distribute  the
         same according to the terms of this Agreement.

         2.2.  LIT hereby authorizes PHILAQUA, under the conditions set forth in
         this  Agreement,  to distribute  Products  under the  Trademarks in the
         Territory.

         2.3.  During the terms of this  Agreement LIT  undertakes not to supply
         Products to other  distributors in the Territory.  in case LIT receives
         an order for delivery of Products from third parties in the  Territory,
         which are not  caused by the  marketing  activity  of  Philaqua,  as an
         exception,  LIT may sell the Products  directly to these third  parties
         upon preliminary written agreement of such sale with Philaqua. LIT will
         inform  PHILAQUA  about  every  third  party  which  is  acting  in the
         Territory and which contacts LIT directly with the intention to buy the
         Products.

         2.4.  During the terms of this  Agreement  PHILAQUA  undertakes  not to
         sell Products  outside the Territory.  If the Parties consider it to be
         necessary,  PHILAQUA will  undertake the sales of Products  outside the
         Territory.  Such  decision  should  be  confirmed  in  written  by both
         Parties.

         2.5.  This  Agreement  shall  not  confer  on  PHILAQUA  any  right  or
         authority  to assume  obligations  in the name of or on account of LIT,
         PHILAQUA shall not make any  representations or warranties with respect
         to Products  except as it is expressly  provided herein or as it may be
         subsequently authorized in writing by LIT.

         2.6.  PHILAQUA  is not  allowed  in any  kind to act on  behalf  of LIT
         unless this is specifically agreed upon in writing by LIT.

         2.7.  LIT is not  allowed  in any  kind to act on  behalf  of  PHILAQUA
         unless this is specifically agreed upon in writing by PHILAQUA.

         2.8.  PHILAQUA  shall  be  deemed  at all  times  to be an  independent
         contractor and nothing  contained  herein shall be deemed to create any
         agency or other relationship of any kind between PHILAQUA and LIT.

         2.9   PHILAQUA represents and agrees that it shall not procure Products
         (in the  form of kits or  otherwise)  from  any  party  other  than LIT
         without prior written consent of LIT.

         2.10. LIT  guarantees  that the Products  under this Agreement meet all
         standards  and  requirements  of DVGW and CE and which are specified in
         the technical documentation and manuals for the Products.  Annex 5 will
         specify the minimal technical requirements of the products. The parties


                                       2
<PAGE>


         agreed to sign this  Annex by the 31.  January  1999.  To this  extent,
         PHILAQUA  agrees to inform LIT timely and actively in a written form of
         all applicable standards,  norms and laws, etc. in the Territory and of
         any changes of such, whatsoever.


         2.11. PHILAQUA  represents  that it  is  perfectly  familiar  with  the
         features and  capabilities  of Products,  and that it shall perform its
         undertakings under this Agreement.

         ARTICLE 3 - MARKETING AND DISTRIBUTION OF PRODUCTS

         3.1.  PHILAQUA  shall  devote its best  efforts to promote  the sale of
         Products  throughout  the  Territory.  PHILAQUA  shall  market and sell
         Products as it considers  appropriate,  according to commonly  accepted
         commercial practices.

         3.2.  Without  limiting the  generality  of the  foregoing,  PHILAQUA's
         duties shall include:


         3.2.1.Carrying  out  appropriate   advertising  and  promotion  of  the
         Products In the Territory at its own cost;

         3.2.2.Maintaining adequate inventory levels of Products; in particular,
         PHILAQUA shall keep on hand a minimum stock of each type of Product and
         spare parts therefor,  as determined by PHILAQUA in  consultation  with
         LIT, corresponding to the probable sales and servicing requirements for
         the next  succeeding  six months,  or such other  period of time as the
         parties consider reasonable with respect to market conditions. PHILAQUA
         will ensure that this stock is  maintained  in good  condition and that
         all reasonable  precautions are taken to prevent its  deterioration.  A
         detailed  stock  position  will  be  communicated  in  writing  to  LIT
         periodically and at least by the end of each calendar quarter;

         3.2.3.Performing  warranty and after-sales  services of Products as set
         forth in Article 5 below;

         3.2.4.Causing a sufficient  number of adequately  trained and competent
         sales and  technical  (service)  personnel  to be  available  to ensure
         proper  and full  performance  of all of its  duties,  obligations  and
         responsibilities under this Agreement.

         3.2.5.Periodically advising LIT of any information  which may be useful
         to LIT and/or its affiliates in the manufacture, promotion or servicing
         of  Products,   including  information  relating  to  volume  of  sales
         initiated and concluded,  customer specifications,  import regulations,
         safety  codes or  similar  regulations  in the  Territory,  in order to
         enable UT to improve  Products  according to market  requirements,  and
         copies of promotional  and sale materials  relating to Products,  which
         are used by PHILAQUA or by its customers.

         3.3.  LIT will perform  research and development  activities to improve
         the Products  according to the changes in the regulations and standards
         in the Territory.

         3.4.  Should  PHILAQUA so request,  LIT shall  supply  PHILAQUA  with a
         reasonable  amount of written or oral information  concerning  relevant
         technical and/or marketing  questions.  This information  shall include
         service instructions and lists of spare parts.

         3.5.  In all  circumstances,  PHILAQUA  shall  indemnify  and  hold LIT
         harmless against any claim, action,  damage, loss or reasonable expense
         related  to the use of  Products  sold by  PHILAQUA,  except for claims
         based  upon the design or  manufacture  of the  Products  for which LIT
         shall be  responsible.  PHILAQUA  shall have and keep,  for the term of
         this  Agreement,   adequate   insurance  against  any  consequences  of
         PHILAQUA's  operations  pursuant  to this  Agreement,  shall  hold  LIT
         harmless against claims related thereto

         3.6.  PHILAQUA  agrees  to give LIT the  right  upon  request  to visit
         PHILAQUA  and/or  affiliates and have access to all documents and stock
         related to this Agreement.


                                       3
<PAGE>


         ARTICLE 4. CERTIFICATIONS

         4.1.  PHILAQUA   shall  obtain  at  its  own  expense  all   approvals,
         authorizations   and  certifications   from  all  competent   standards
         institutes,  laboratories,  government  agencies or  authorities of the
         Territory  that  may be  required  for  importing,  marketing  or using
         Products,  or which are reasonably  necessary to the marketing and sale
         of  Products.  LIT  shall  make  its  best  efforts  to  give  PHILAQUA
         reasonable assistance in applying for and obtaining the same.

         4.2.  PHILAQUA shall not sell to any  distributor,  dealer or agent any
         Product in any area where local  regulations  prohibit  the sale of the
         same, including any area where any required approval,  authorization or
         certification  has not been  obtained.  In case of any doubts  Philaqua
         will obtain written agreement from it's dealers, distributors or agents
         with  the  confirmation  of the  conformity  of the  Products  to local
         regulations.

         ARTICLE 5. GUARANTEE

         5.1.  As LIT does not have an appointed after-sales  service network at
         its  disposal in the  Territory  to effect  guarantee  and  after-sales
         service itself, the prices quoted to PHILAQUA,  as detailed in Annex 2,
         already  include  a  discount  of 2 % (two  per  cent)  which  shall be
         considered by the Parties as putting PHILAQUA in the position to effect
         a 1  (one)-year  guarantee  and  after-sales-service  for  Products and
         thereby excluding any obligation of third parties on LIT to provide for
         or supply the same.  All  obligations  on LIT by PHILAQUA  concerning 1
         (one)-year warranty and after-sales-service are not effected by this.

         5.2.  PHILAQUA  shall  establish  and  maintain  for  the  term of this
         Agreement the technical staff referred to under Article 3.2.4.  for the
         proper  performance of the services described above, and shall promptly
         take action on all reasonable  service  requests  concerning  Products.
         PHILAQUA  shall  adequately  and  expeditiously  perform  all the tasks
         described  under  this  Article  5, in  order  that  Product  users  be
         satisfied and that reputations of both Parties be maintained thereby.

         5.3   In order to enable LIT to Improve its Product  line and images of
         both Parties,  PHILAQUA shall supply LIT with quarterly written reports
         on PHILAQUA's guarantee and after-sales  activities undertaken pursuant
         to this Article 5.

         ARTICLE 6. ORDERS AND STOCK OF PRODUCTS.

         6.1.  Parties  agreed  herein on the minimum  planned  sale of Products
         during the terms of this Agreement which is represented in the Annex 4.

         6.2.  LIT shall make all reasonable  efforts,  within the limits of its
         plant capacity,  production schedules and subject to the fulfillment of
         prior  orders,  to supply to PHILAQUA the Products  during the terms of
         this  Agreement,  provided that PHILAQUA has placed the orders and made
         all payments as agreed under Article 7 below.

         6.3.  PHILAQUA  will  place  an  order  to LIT  for  each  purchase  of
         Products.

         6.4.  LIT will undertake the obligations to manufacture  and to prepare
         shipment of the Products after getting official order for the specified
         set of Products by sending an acknowledgement  of order.  Delivery time
         depends on the amount of the purchased products, can vary between 4 and
         14 weeks as it is stated in the Annex 2.

         6.5.  To ensure best  service for the  customer, Parties  will create a
         Stock of  Products  and spare  parts in the amounts to be agreed in the


                                       4
<PAGE>


         beginning of every calendar year. The Stock contents for the first year
         of this agreement is agreed as it is specified in the Annex 3. Position
         of the Stock will be chosen by PHILAQUA to be the most convenient.

         6.6.  In order to fill  initially the Stock of Products as specified in
         the Annex 3, Philaqua will place an order with LIT for the whole volume
         of equipment  as  mentioned  in the Annex 3. The delivery  time of this
         equipment  will be not later than 12 weeks from the day of placing  the
         order.

         6.7.  In case Philaqua will receive a certain order from a customer for
         the  Products  which are in stock,  it will place an order with LIT for
         these Products with a view to complete the stock. Time of such an order
         will be agreed upon by the Parties.

         ARTICLE 7. PRICES, PAYMENT AND PROCEDURE OF GETTING PRODUCTS

         7.1.  Basic  prices  of the  Products  are  agreed  by the  Parties  as
         specified in the Annex2_  Basic prices are subject to change by written
         approval of both sides.

         7.2.  Prices  for the set of Products  which  will be  ordered  for the
         initial filling of the Stock (as specified in Annex 3) are agreed to be
         85(degree)k  of the  basic  prices  specified  in the  Annex  2 of this
         Agreement.

         7.3.  All  prices  are  quoted on the basis of FICA  Moscow  conditions
         (Incoterms 1990).

         7.4.  PHILAQUA will pay 100% of the amount of ordered  Products  within
         10 (ten)  days  after  receiving  the  shipment  but not later  than 20
         (twenty) days after receiving from LIT the shipping  documents (invoice
         and packing list)

         7.5.  The date when the money is  credited  to the bank  account of LIT
         will be considered  as the date of payment.

         7.6.  In case  PHILAQUA  will  discover  any  faults o  defects  of the
         Products  caused by improper  manufacturing,  it shall send a letter to
         LIT with the detailed description of the problems.

         7.7.  LIT will  admit  the  claims  of  defects  within  30 days  after
         receiving the Products by PHILAQUA.  This does not concern the warranty
         claims according to Article 5 of this Agreement.

         7.8.  LIT is obliged to repair all defects at its own  expenses  within
         30 days after  receiving  the  written  information  about the  defects
         (according to ch. 7.7) from PHILAQUA.

         ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS

         8.1   LIT has all rights on the "LIT" trademark, which is registered in
         Russia and in any other country where LIT considers it to be necessary.
         PHILAQUA  has  all  rights  on  the  _  "PHILIT"  trademark,  which  is
         registered in Germany and in any other country where PHILAQUA considers
         it to be necessary.

         8.2   The Trademarks, PHILIT"  and "LIT" are allowed to be used for the
         Products  mentioned  in the  Annex  to  this  Agreement.  If one of the
         Parties wishes to use the Trademarks  for any other  purposes,  written
         approval of the other Party should be  obtained.  The said use shall be
         in accordance with the shape, form and color as agreed by both Parties.

         8.3   LIT will give to PHILAQUA free license to us ,,LIT" trademark for
         the Products.

         8.4   PHILAQUA  will give to LIT free license to us ,PHILIT"  trademark
         for the Products.


                                       5
<PAGE>


         8.5. In conjunction  with Products or the marketing  thereof,  PHILAQUA
         shall  not use any  trade  names,  trademarks  or logo  other  than the
         "PHILIT" and/or "LIT" trademarks. PHILAQUA's obligation hereunder shall
         survive the expiration or termination  of this  Agreement.  Use of free
         licenses terminates when this Agreement terminates or expires.

         8.6.  No representation  is made by LIT,  expressly or by  implication,
         that any Products  used by, sold to, or to be sold by PHILAQUA will not
         infringe third party proprietary rights. Accordingly,  LIT shall not be
         responsible,  either  directly or as an  indemnitor  of PHILAQUA or its
         vendees,  for any consequence of any alleged,  purported or established
         infringement  of  said  third  party's  rights  in  connection  with or
         resulting  from said use or sale of Products.

         8.7.  PHILAQUA  will not  apply  to  obtain  any  kind of  intellectual
         property  rights  related to the Products in the  Territory  and beyond
         without prior written approval by LIT.

         8.8.  If both Parties  decide that it is needed for the better sales of
         the  Products,  they  may  apply  and  obtain  additional  intellectual
         property  rights  related to the Products in the  countries  inside the
         Territory  according to a separate  written  agreement in each case. If
         one of the parties will not support to get intellectual property rights
         in the  Territory for mutual  ownership  each Party is allowed to apply
         and obtain these  rights by itself upon  written.  confirmation  of the
         other Party.

         ARTICLE 9. TERMINATION

         9.1.  This Agreement  shall  retroactively  come into force on the date
         when it is signed by both parties,  and,  unless  sooner  terminated as
         hereinafter  provided,  shall remain in force until  December 31, 2001.
         Subject to the  PHILAQUA  fulfilling  its  obligations  and meeting the
         sales  targets,  this  Agreement  may be extended  subject to terms and
         conditions  to be agreed upon by the Parties  hereto at least 3 (three)
         months prior to its expiration,  it being  understood that such renewal
         should be  substantially  similar to the terms and  conditions  of this
         Agreement.

         9.2.  If either LIT or PHILAQUA do not have any longer the intention to
         extend  this  Agreement  they  have to inform  the other  Party 6 (six)
         months prior to its expiration at the least.

         9.3.  Without  limiting  the  generality  of  the  foregoing,  LIT  may
         forthwith terminate this Agreement:

         9.3.1.If PHILAQUA fails (i) to take delivery as scheduled of any of its
         orders  provided  for  under  Article  6,  (ii) to  supply  information
         requested in  conformity  with Article  3.2.2 and 3.7. or (iii) to make
         any payments as provided for in this Agreement;

         9.3.2.If PHILAQUA  fails to fulfill the sales  program as agreed in the
         Annex 4 to this Agreement.

         9.3.3.In the event of the  bankruptcy,  winding  up or  liquidation  of
         PHILAQUA,  whether  voluntary  or  involuntary,   or  of  the  sale  of
         substantially  all of PHILAQUA's  assets, or of taking over of PHILAQUA
         directly or indirectly by a third party.

         9.4.  Without  limiting the generality of the  foregoing,  PHILAQUA may
         forthwith terminate this Agreement

         9.4.1 If LIT violates the exclusivity right as specified in ch 2.3.

         9.4.2 If LIT does not fulfill its  obligations as mentioned in ch. 2.10
         and does not  cooperate  with  PHILAQUA  to  eliminate  problems  which
         prevent from distribution of the Products in the Territory.


                                       6
<PAGE>


         9.4.3      If LIT  fails its  obligation  concerning  delivery  time as
         specified in Annex 2.

         9.5.       The rights and obligations of the parties upon expiration or
         early   termination  of  this  Agreement  for  any  reason   whatsoever
         (including,  but not limited to,  cancellation  caused by court order),
         shall be as follows:

         9.5.1.     PHILAQUA  shall 9.5.1.1 Settle all payments for the Products
         according to the article 7 of this Agreement.

         9.5.1.2.   Return to LIT within  thirty (30) days of LIT's  request all
         documents of any kind  communicated  to PHILAQUA by LIT,  which contain
         any confidential  information relating to Products, and likewise return
         all  materials  bearing  the  Trademark  prepared  by LIT,  and destroy
         PHILAQUA prepared material bearing the Trademark;

         9.5.1.3.   Cease  any  business  or  activity  directly  or  indirectly
         connected  with  this  Agreement  except  (i)  for  the  guarantee  and
         after-sales  services explained under Article 5, and (ii) insofar as is
         necessary for the safe of the remaining inventory of Products.

         9.5.1.4.   Cancel, within the shortest  possible  time,  any  insertion
         relating to Products,  the  Trademark or any  tradenames  of LIT in all
         telephone and trade or professional  directories,  and remove forthwith
         any signs or advertising  referring to or in connection  with Products,
         the  Trademark  or  tradenames  of LIT and,  in general,  refrain  from
         holding forth thereafter in any manner whatsoever that PHILAQUA has, or
         has had, any connection with Products.

         9.5.2      LIT shall:

         9.5.2.1    Return to PHILAQUA  within  thirty  (30) days of  PHILAQUA's
         request all  documents  of any kind  communicated  to LIT by PHILAQUA,
         which contain any confidential  information  relating to Products,  and
         likewise  return  all  materials  bearing  the  Trademark  prepared  by
         PHILAQUA, and destroy LIT prepared material bearing the Trademark;

         ARTICLE 10. GENERAL PROVISIONS

         10.1. Waiver
         Failure by either party on one or more occasions to avail itself of one
         or more  provisions of this Agreement shall in no event be construed as
         a waiver thereof.

         10.2. Delayed Performance - Force Majeure
         Neither  party  shall be  liable  in any way  because  of any  delay in
         performance  hereunder  which  is due to  unforeseen  circumstances  or
         causes  beyond its  control.  including,  but not limited  to,  strike;
         lockout; riot; war; fire; flood; changing in national regulations which
         can prevent from implementation of this Agreement.

         10.3. Notices
         All notices, summons and communications related to this Agreement shall
         be written do English and native language of the sender,  and addressed
         by registered air mail to the other Party at its  hereinabove set forth
         address,  or any new  address  that has been  notified In the same way.
         Each Party is  entitled to  disregard  any text not written in English.

         10.6. Infringement of laws or regulations
         In case any provision of this Agreement infringes any applicable law or
         legally  enforceable rule, said law or rule shall prevail,  but only to


                                       7
<PAGE>


         the extent necessary to comply therewith,  and the infringing provision
         shall be null and void to that extent,  while the other  provisions  of
         this Agreement shall remain in full force and effect; In which case the
         parties shall then endeavor to replace any such infringing provision by
         mutually  acceptable  substitutes,  in order  that the  balance of this
         Agreement remain unchanged to the extent permissible.

         10.7. Governing Law - Competence
         This Agreement, its interpretation,  performance, or any breach thereof
         shall be  governed  by and  construed  according  to Dutch law  without
         reference  to  the  rules  on  conflicts  of  laws,  and in  case  of a
         disagreement that cannot be settled amicably,  the Rotterdam  arbitrage
         court, The Netherlands, exclusively, shall be competent.

         IN WITNESS  WHEREOF the Parties  have signed this  Agreement  on .Y2a o
         &cew6?F 1998 in duplicate in the Russian, German and English languages,
         the  three  texts  being  equally  authentic.  In  case  there  is  any
         divergence of interpretation  between the Russian and German texts, the
         English text shall be operative.

         Correspondent addresses of the Parties:
         -----------------------------------------------------------------------
         L.I.T. ZAO.                            PHILAQUA Aufbereitungstechnik
         107076 Moscow, Russia                  GmbH
         Krasnobogatyrskaya str. 44             Beisenst. 39 -41
                                                D-45964 Gladbeck
         -----------------------------------------------------------------------
         Bank:                                  Bank
         Federal Bank for Innovations &         Commerzbank Gladbeck
         Development                            Account No. 82 88 666
         account No. 4070 2280 9000 0000 0001   BLZ: 360 400 39
         Corr. Bank: Commerzbank,
         Frankfurt/Main, Germany
         SWTFT: COBA DE FF
         Corr. Acc-No.: 4008864324 DEM
         -----------------------------------------------------------------------
         Signed:                                Signed:
         /s/ Sergei Kostiouchenko               /s/ Dr. H. Holter
         ------------------------               -----------------
         Name: Sergei Kostiouchenko             Name: Prof. Dr. H. Holter
         Title: Director                        Title: Director
         -----------------------------------------------------------------------
                                                Signed:
                                                /s/ Dr. O. Leitzke
                                                ------------------
                                                Name: Dr. O. Leitzke
                                                Title: Director
         -----------------------------------------------------------------------


                                       8
<PAGE>


         Annex 1.

         Territory  under the EXCLUSIVE  DISTRIBUTION AGREEMENT, UV  systems for
         water disinfection.

         The Territory  agreed by the Parties  includes all the countries in the
         wood with exception of the countries of the former Soviet Union.






                                       9
<PAGE>


         Annex 2.

         List of Products under the EXCLUSIVE DISTRIBUTION AGREEMENT "UV systems
         for water disinfection":

         UV systems for  disinfection of drinking water (PHILIT series according
         to Tablet).  UV systems for  disinfection of secondary  effluent at the
         sewage water  purification  plants including  packaged and open channel
         systems,  spare  parts  for  the  mentioned  UV  systems.  Table  1. UV
         Sterilizers of PHILIT series:
<TABLE>
<CAPTION>

         -------------------------------------------------------------------------------------------
         No    Equipment description                                        Price           Delivery
                                                                            [DM]              Time
                                                                                             (weeks)
         -------------------------------------------------------------------------------------------
<S>            <C>                                                          <C>                 <C>
         1     UV Sterilizer PHILIT 5,                                      2300                4
               UV reactor of polished stainless steel, 6 m3/h water
               flow at 98% transmissivity, IP-65 plastic control
               cabinet, UV sensor, with control system and
               stainless steel connection box
               Options:
               Stainless steel control cabinet                              500
               Clearting system VB-2(2)                                     110
               Painted steel frame                                          120
               Stainless steel frame                                        300
               Spare lamp DB-75-2                                           50
               Spare quartz sleeve                                          36
         ------------------------------------------------------------------------------------------
         2     UV Sterilizer PHILIT 12,                                     3000                4
               UV reactor of polished stainless steel, 13.9 m3/h
               water flow at 98% transmissivity, IP-65 plastic
               control cabinet, UV sensor with control system and
               stainless steel connection box
               Options:
               Stainless steel control cabinet                              500
               cleaning system WB-2(2)                                      110
               painted steel frame                                          120
               stainless steel frame                                        300
               spare lamp DB-75-2                                           50
               spare oartz sleeve                                           36
         ------------------------------------------------------------------------------------------
         3     UV Sterilizer PHILIT 50,                                     5000                4
               UV reactor of polished stainless steel, 50 m3/h
               water flow at 98% transmissivity. IP-65 plastic
               control cabinet, UV sensor with control system told
               stainless steel connection box
               Options:
               Stainless steel control cabinet                              500
               cleaning system WB-5(2)                                      153
               painted steel frame                                          120
               stainless steel frame                                        300
               spare lamp DB-75-2                                           50
               spare uartz sleeve                                           36
         ------------------------------------------------------------------------------------------
         4     UV Sterilizer PHILIT 100,                                    6000                4
               UV reactor of polished stainless steel, 100 m3/h
               water flow at 98% transmissivity, IP-65 plastic
               control cabinet, UV sensor with control system and
         ------------------------------------------------------------------------------------------
</TABLE>


                                       10
<PAGE>

<TABLE>
<CAPTION>

         -------------------------------------------------------------------------------------------
         No    Equipment description                                        Price           Delivery
                                                                            [DM]              Time
                                                                                             (weeks)
         -------------------------------------------------------------------------------------------
<S>            <C>                                                          <C>                 <C>
               stainless steel connection box
               Options:
               Stainless steel control cabinet                              500
               cleaning system WB-5(2)                                      153
               painted steel frame                                          120
               stainless steel frame                                        300
               spare lamp DB-75-2                                           50
               spare quartz sleeve                                          36
         -------------------------------------------------------------------------------------------
         5     UV Sterilizer PHILIT 200,                                    11500               6
               UV reactor of polished stainless steel, 200 m3/h
               water flow at 98% transmissivity, IP-65 plastic
               control cabinet, UV sensor with control system and
               stainless steel connection box
               Options:
               Stainless steel control cabinet                              500
               cleaning system WB-5(2)                                      153
               painted steel frame                                          120
               stainless steel frame                                        300
               spare lamp DB-75-2                                           5O
               spare quartz sleeve.                                         36
         -------------------------------------------------------------------------------------------
         6     UV Sterilizer PHILIT 400,                                    22000               14
               UV reactor of polished stainless steel, 486 m3/h
               water flow at 98% transmissivity, IP-65 stainless
               steel control cabinet and connection box, UV
               sensor with control system
               Options:
               Cleaning system WB-5(2)                                      153
               Spare lamp DB-75-2                                           50
               Spare quartz sleeve                                          36
         -------------------------------------------------------------------------------------------
         7     UV Sterilizer PHILIT 800,                                    43000               14
               UV reactor of polished stainless steel, 1000 m3/h
               water flow at 99% transmissivity, IP-65 stainless
               steel control cabinet and connection box UV
               sensor with control system
               Options:
               Cleaning system WB-5(2)                                      153
               spare lamp DB-75-2                                           50
               spare quartz sleeve                                          36
         -------------------------------------------------------------------------------------------
</TABLE>
         Delivery time means period of time between LIT receiving the order from
         PHILADUA and LIT  informing  PHIUIOUA  that the order is completed  and
         ready for  shipment  and  sends the  shipping  documents  (invoice  and
         packing list).




                                       11
<PAGE>


         Annex3.

         Stuck  of  Products  in  Philaquft  under  Me  EXCLUSIVE   DISTRIBUTION
         AGREEMENT.UV  systems for wafer disinfection" for the first year of the
         Agreement validity.

             1. Philit 5 - 5 pieces,
             2. Philit 12 - 5 pieces,
             3. Philit 50 - 2 pieces,
             a. Philit 100 - 2 pieces,
             5  Philit 200 - 1 piece.
             6. Spare lamps DB-75 - 50 lamps,
             7. Spare quartz sleeves - 30 pieces,
             8. Cleaning system WB-2 - 2 pieces,
             9. Cleaning system WB-5 - 2 pieces.




                                       12
<PAGE>


         Annex4.

         The minimum  volumes of sales to maintain the conditions of Exclusivity
         under  the  EXCLUSIVE  DISTRIBUTION  AGREEMENT  "UV  systems  for water
         disinfection"

              Year                            Volume of purchase of
                                              Products from LIT
         -----------------------------------------------------------------------
              1999                              250 000 DM
              2000                            1 500 000 DM
              2001                            3 000 000 DM

         The aim of the parties is to achieve total volume of purchase of 5 Mio.
         DM dunng the mentioned three years.

         If PHILAQUA exceeds the specified volume for a given year the volume of
         excess will be added to the volume of the subsequent year.






                                       13