Exhibit 10.2

                             DISTRIBUTION AGREEMENT

      THIS  DISTRIBUTION  AGREEMENT  (this  "Agreement") is made between Ovation
Products  Corporation,  a Delaware  corporation  ("Ovation"),  and S. J. Electro
Systems, Inc., a Minnesota corporation ("SJE" ).

                                    RECITALS

      A.  Ovation  is engaged in the  design  and  development  of  distillation
technology  for use in  wastewater  treatment,  water  purification  and related
processes.

      B. SJE is engaged in the design, development, manufacture, marketing, sale
and  distribution  of liquid  level  control  devices  for the  water,  sump and
wastewater markets.

      C. The  parties  desire to work  together  to  develop,  market,  sell and
distribute septic appliances which incorporate Ovation's distiller technology.

      D. The parties are entering into  contemporaneously  with and  conditional
upon this  Agreement  that  certain  Strategic  Alliance  Agreement as well as a
Series  A  Preferred  Stock  Purchase  Agreement,   First  Refusal  and  Co-Sale
Agreement,  Investor  Rights  Agreement,   Promissory  Note,  Pledge  Agreement,
Confidentiality Agreement and Intellectual Property Agreement.

                                    AGREEMENT

      NOW, THEREFORE,  the parties,  intending to be legally bound, hereby agree
as follows:

1. APPOINTMENT

      1.1  APPOINTMENT.  Ovation  appoints SJE as its authorized  distributor of
Ovation distiller products used in Septic Appliances (as such term is defined in
the Strategic Alliance  Agreement)  ("Products")  within Canada,  Mexico and the
United  States of America  ("Territory")  upon the terms and  conditions of this
Agreement.

      This  appointment is exclusive  within the Territory  during the Exclusive
Term.  Exclusive  means that Ovation will not  directly or  indirectly  sell the
Products in the Territory or authorize  anyone other than SJE to distribute  the
Products in the Territory.

      This appointment is non-exclusive for a period of five years following the
termination of the Exclusive Term (the "Non-Exclusive Term").

      At all times while SJE is an authorized  distributor in the Territory,  it
shall also have the  non-exclusive  right to distribute and sell the Products in
any  geographical  area  outside  the  Territory  for which  Ovation has not yet
granted  exclusive  distribution  rights to a third  party with  respect to such
area.


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      1.2 INDEPENDENT RELATIONSHIP; NO AGENCY. SJE's status under this Agreement
is that of an independent contractor. Nothing in this Agreement shall constitute
either  party as the agent or legal  representative  of the other  party for any
purpose,  and no officer,  representative  or employee of either  party shall be
considered as having employee status with Ovation.  Neither party is granted the
right or  authority  to assume or to create any  obligation  or  responsibility,
express or implied, in the name of or on behalf of the other party except as may
be  specifically   authorized  in  writing.  Each  party  shall  have  the  sole
responsibility  for the satisfaction of any and all claims made by third parties
on account of its conduct or that of its employees or agents in the  performance
of this Agreement.

      1.3  STRATEGIC  ALLIANCE  AGREEMENT.   This  Agreement  and  that  certain
Strategic Alliance Agreement have been entered into concurrently by the parties.
Capitalized  terms not otherwise defined in this Agreement shall be provided the
meanings afforded to them in the Strategic Alliance Agreement.

2. TERM

      2.1 EXCLUSIVE TERM.  Except as otherwise  provided  herein,  the Exclusive
Term, as used in this  Agreement,  begins on the date that both parties agree in
writing  that sales in  commercial  quantities  of Products  are first made (the
"Commencement  Date," which shall be mutually agreed and recording in writing as
close to the date agreed upon as practicable)  and ends on the later of: (a) the
seventh (7th)  anniversary of the Commencement Date or (b) the date on which SJE
has received  $50,000,000 in Profit Sharing Payments,  provided that in no event
shall the  Exclusive  Term extend  beyond the tenth  (10th)  anniversary  of the
Commencement Date.

      2.2 AGREEMENT  TERM.  The term of this  Agreement  shall begin on the date
both parties has signed this Agreement  ("Effective  Date") and terminate on the
earlier  of  the  end of the  Non-Exclusive  Term  or  upon  termination  of the
Strategic  Alliance  Agreement.  This  Agreement  will be renewed  only upon the
written mutual agreement of the parties.

3. PRICES, PAYMENTS AND TERMS AND CONDITIONS OF SALE

      3.1 ORDERS.  SJE shall submit purchase orders to Ovation for such Products
as SJE may require.  Each purchase order will include: (a) Products ordered; (b)
quantity requested; (c) shipment dates requested; and (d) shipping instructions.

      3.2 DETERMINATION OF PRICES TO CUSTOMERS DURING THE EXCLUSIVE TERM. During
the Exclusive  Term,  SJE shall  recommend the prices for Products to be sold by
SJE to its  customers.  Such  recommended  prices  shall be subject to Ovation's
approval (which shall not be unreasonably withheld).

      3.3 PRICES DURING  NON-EXCLUSIVE  TERM. During the Non-Exclusive Term, the
price  to be paid by SJE  for the  Products  shall  be  according  to  Ovation's
standard price lists in effect at the time an order is filled provided that such
prices shall not exceed the lower of:

            (a) Prices available in the best price package (based on quantities,
payment terms,  delivery requirements and other terms) offered by Ovation to any
of its other customers; or


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            (b) The best price  offered by  Ovation to any other  party  selling
Septic  Appliances  in each  geographical  area where SJE has the  non-exclusive
right to distribute and sell the Products.

4. WARRANTY

      4.1 APPLICABLE WARRANTY.  The Products are subject to the Ovation warranty
and limitation of warranty set forth in Exhibit 4.1 attached hereto.

5. TERMINATION PRIOR TO EXPIRATION OF NONEXCLUSIVE TERM

      5.1 IMMEDIATE TERMINATION UPON CERTAIN EVENTS OF BANKRUPTCY.  Either party
may at its option  terminate this Agreement  immediately  upon written notice to
the other in the event that the other party makes an assignment  for the benefit
of  creditors;  admits in writing its  inability to pay its debts as they become
due; files a voluntary petition in bankruptcy;  is adjudicated to be bankrupt or
insolvent; files a petition seeking for itself any reorganization,  arrangement,
composition, readjustment, liquidation, dissolution or similar arrangement under
any present or future  statute,  law or  regulation,  files an answer or similar
pleading  admitting the material  allegations  of a petition filed against it in
any such proceeding;  or consents to or acquiesces in the appointment of, or has
its  business  placed  in the  hands  of,  a  trustee,  receiver,  assignee,  or
liquidator of it or any substantial part of its business,  assets or properties,
whether by voluntary act or otherwise (a "Bankruptcy  Event"). In the event of a
Bankruptcy  Event of SJE,  Ovation  shall  have the  option  to  terminate  this
Agreement  as  well as the  Strategic  Alliance  Agreement.  In the  event  of a
Bankruptcy  Event of  Ovation,  SJE shall  have the option of  terminating  this
Agreement and the Strategic Alliance Agreement.

      5.2  DUTIES  OF  PARTIES  UPON  TERMINATION.   Upon  termination  of  this
Agreement,  each party  shall  perform  all  obligations  incurred  prior to the
effective date of such  termination  and all  indebtedness  of each party to the
other shall become immediately payable, and any rights and obligations regarding
confidentiality,  intellectual  property and indemnification for events prior to
termination shall survive termination of this Agreement.

      5.3  TERMINATION  FOR  MATERIAL  BREACH.   Either  party  may  immediately
terminate  this  Agreement  in the event  that the other  party  does not cure a
material breach of this Agreement within 30 days of receiving  written notice of
such breach.

      5.4 LICENSE  AGREEMENT.  So long as this  Agreement  and the  Distribution
Agreement  have not been  terminated:  (a) SJE  shall  have no right  under  the
License Agreement attached as Exhibit 5.4 to the Distribution  Agreement to: (i)
manufacture  Products or (ii) utilize  intellectual  property of Ovation for any
purposes other than those  contemplated  in the  Distribution  Agreement and the
Strategic  Alliance  Agreement;  and (b) SJE shall not be  obligated to make the
payments under the License Agreement.

6. SETTLEMENT OF DISPUTES

      6.1 BASIC DISPUTE RESOLUTION  PROCEDURES.  Any dispute between the parties
either with respect to the  interpretation of any provision of this Agreement or
with respect to the


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performance  of either  party will be resolved as specified in Article 10 of the
Strategic Alliance Agreement.

7. GENERAL PROVISIONS

      7.1 AMENDMENT.  Amendment of this Agreement shall only be binding upon the
parties if made in writing and duly signed by both parties.

      7.2  WAIVER.  Failure by either  party to enforce  any  provision  of this
Agreement  shall not be construed to be a waiver of such  provision or its right
thereafter to enforce such provision or any other provision.

      7.3 ENTIRE  AGREEMENT.  This  Agreement as well as the Strategic  Alliance
Agreement,  the Series A Preferred Stock Purchase  Agreement,  the First Refusal
and Co-Sale Agreement,  the Investor Rights Agreement,  the Promissory Note, the
Pledge Agreement,  the Confidentiality  Agreement and the Intellectual  Property
Agreement  constitute the entire agreement between the parties and supersede all
previous understandings,  representations,  proposals, and discussions,  whether
oral or written, between the parties.

      7.4 GOVERNING  LAW;  DISPUTES.  This Agreement  shall be  interpreted  and
enforced  pursuant to the laws of the State of Minnesota.  Any disputes  arising
under this Agreement shall be resolved by arbitration  according to the rules of
the American  Arbitration  Association  following  the  procedures  set forth in
Section 6 above.

      7.5 NOTICES.  All notices and other  communications  required or permitted
under this  Agreement  shall be in writing and shall be considered  given on the
day sent when given in one of the following ways with simultaneous  transmission
by e-mail to the e-mail address shown:

            (a)   delivered personally,

            (b)   sent by facsimile, telegram, telex or cable; or

            (c)   by registered or certified mail, return receipt requested;

to the parties at the  following  addresses (or at such other address as a party
may specify by written notice to the other):

            If to Ovation:              Ovation Products Corporation
                                        Attention: Mr. Allen Becker 395
                                        Dunstable Road
                                        Nashua, NH 03062
                                        Email: a_becker@ovationproducts.com


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            If to SJE:                  S.J. Electro Systems, Inc.
                                        Attention: Mr. Nathan Fetting
                                        22650 County Highway 6
                                        P.O. Box 1708
                                        Detroit Lakes, MN 56502
                                        Email: nathanf@sjerhombus.com

      7.6 ASSIGNMENT.  Neither party hereto shall assign,  transfer or otherwise
dispose  of this  Agreement,  in  whole  or in part,  to any  individual,  firm,
corporation,  association or other entity  without the prior written  consent of
the other party.

      IN WITNESS WHEREOF,  the parties have caused this Agreement to be executed
on the day and year first above written.

OVATION PRODUCTS CORPORATION                    S.J. ELECTRO SYSTEMS, INC.


By: /s/ Allen E. Becker                         By:
    ----------------------------                    ----------------------------
    Its: CEO                                        Its:


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            If to SJE:                  S.J. Electro Systems, Inc.
                                        Attention: Mr. Nathan Fetting
                                        22650 County Highway 6
                                        P.O. Box 1708
                                        Detroit Lakes, MN 56502
                                        Email: nathanf@sjerhombus.com

      7.6 ASSIGNMENT.  Neither party hereto shall assign,  transfer or otherwise
dispose  of this  Agreement,  in  whole  or in part,  to any  individual,  firm,
corporation,  association or other entity  without the prior written  consent of
the other party.

      IN WITNESS WHEREOF,  the parties have caused this Agreement to be executed
on the day and year first above written.

OVATION PRODUCTS CORPORATION                    S.J. ELECTRO SYSTEMS, INC.


By:                                             By: /s/ Laurie Lewandowski
    ----------------------------                    ----------------------------
    Its: CEO                                        Its: CEO


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                                  EXHIBIT 4.1

                                OVATION WARRANTY

NO EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR PARTICULAR PURPOSE OR
MERCHANTABILITY, OR EXPRESS OR IMPLIED WARRANTY OF ANY OTHER NATURE IS GRANTED
HEREIN. NO ONE IS AUTHORIZED TO ASSUME FOR OVATION ANY LIABILITY IN CONNECTION
WITH THE SALE OF THIS PRODUCT.

OVATION'S OBLIGATIONS UNDER THIS WARRANTY SHALL BE LIMITED TO THE REPAIR OR
REPLACEMENT OF THE PRODUCT, AT OVATION'S SOLE DISCRETION, DURING THE TWO (2)
YEAR PERIOD FROM THE DATE ON WHICH THIS PRODUCT WAS INSTALLED IN YOUR SYSTEM.

YOUR RIGHTS UNDER THIS WARRANTY ARE YOUR EXCLUSIVE REMEDIES FOR ANY FAILURE TO
OVATION TO COMPLY WITH ANY EXPRESS OR IMPLIED WARRANTY. OVATION SHALL NOT BE
LIABLE IN EITHER TORT OR CONTRACT FOR ANY LOSS OR DAMAGE, WHETHER DIRECT,
CONSEQUENTIAL, OR INCIDENTAL, ARISING UNDER THE USE OR INABILITY TO USE THIS
PRODUCT OR ANY BREACH BY OVATION OF ANY EXPRESS OR IMPLIED WARRANTY. SOME STATES
DO NOT ALLOW FOR LIMITATIONS ON HOW LONG ANY IMPLIED WARRANTY LASTS, SO THE
ABOVE LIMITATION MAY NOT APPLY TO YOU. SOME STATES DO NOT ALLOW THE EXCLUSION OR
LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATION OR
EXCLUSION MAY NOT APPLY TO YOU. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS,
AND YOU MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE.

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                                   EXHIBIT 5.4

                                LICENSE AGREEMENT

                                   (SEE TAB 9)