Exhibit 10.7

DATED                                                                       2002
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                      (1) OVATION PRODUCTS CORPORATION INC

                                     - and -

                       (2) LANCY WATER TECHNOLOGY LIMITED

                    ----------------------------------------
                             DISTRIBUTION AGREEMENT
                                   relating to

                           water distillation systems
                    ----------------------------------------

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                                TABLE OF CONTENTS

                                                                            PAGE

1.       INTERPRETATION........................................................1

2.       APPOINTMENT...........................................................3

3.       TERMS OF BUSINESS.....................................................3

4.       SPECIFICATION OF THE PRODUCTS.........................................6

5.       MANUFACTURE AND DELIVERY OF THE PRODUCTS..............................6

6.       OBLIGATIONS OF THE DISTRIBUTOR........................................7

7.       OBLIGATIONS OF THE COMPANY...........................................10

8.       MODIFICATIONS........................................................11

9.       PURCHASE TARGETS.....................................................11

10.      DEFECTIVE PRODUCTS...................................................12

11.      INDUSTRIAL PROPERTY RIGHTS...........................................12

12.      GRANT OF PATENT LICENCE..............................................13

13.      WARRANTIES...........................................................13

14.      PAGE MISSING!!!!!!!!!!!!!............................................14

15.      DEFENCE OF LICENSED PATENTS..........................................14

16.      CONFIDENTIALITY......................................................15

17.      DURATION AND TERMINATION.............................................15

18.      CONSEQUENCES OF TERMINATION..........................................16

19.      FORCE MAJEURE........................................................17

20.      ENTIRE AGREEMENT.....................................................17

21.      WAIVER OF RIGHTS BASED ON MISREPRESENTATION..........................18

22.      ASSIGNMENT...........................................................18

23.      RELATIONSHIP OF THE PARTIES..........................................18

24.      COSTS AND EXPENSES...................................................18

25.       EXECUTION...........................................................18

26.      AMENDMENT AND WAIVER.................................................19

27.      THIRD PARTY RIGHTS...................................................19

28.      LAW AND JURISDICTION.................................................19

29.      NOTICES..............................................................19

30.      SURVIVORSHIP.........................................................19

31.      PRECEDENCE AND INVALIDITY............................................20

SCHEDULE 1....................................................................26

Products......................................................................26

SCHEDULE 2....................................................................27


                                      -i-
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                                TABLE OF CONTENTS
                                   (continued)

                                                                            PAGE

Territory and Market..........................................................27

SCHEDULE 3....................................................................28

List prices of Products.......................................................28

SCHEDULE 4....................................................................29

Minimum purchase targets and Time Period......................................29

SCHEDULE 5....................................................................30

Specification.................................................................30

SCHEDULE 6....................................................................31

Licensed Patents..............................................................31

SCHEDULE 7....................................................................32

Trade Mark....................................................................32


                                      -ii-
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THIS DISTRIBUTION AGREEMENT is made on                                      2002

BETWEEN

(1)   OVATION PRODUCTS  CORPORATION INC of 395 East Dunstable Road,  Nashua,  NH
      03062 USA ("COMPANY")

(2)   LANCY  WATER  TECHNOLOGY  LIMITED  (registered  in England and Wales under
      company  number  4473542)  whose  registered  office is at  Godiva  Place,
      Coventry CV1 5PN, United Kingdom ("DISTRIBUTOR")

1.    INTERPRETATION

      1.1   In this agreement unless the context requires otherwise:

            "ALPHA PRODUCT" means 8 gallon per hour bottom drive compressor with
            a non-cleanable heat exchanger.

            "BETA  PRODUCT"  means 15-20  gallon per hour  distiller  top with a
            clean inplace heat exchanger.

            "IMPROVEMENT" means

            (i)   any  invention  developed  or  acquired  with  free  rights of
                  disposal  by the Company or the  Distributor  (as the case may
                  be) and used  commercially  by the Company or the  Distributor
                  during  the  term of this  agreement,  the use of which in the
                  territory  without a licence under the licensed  patents would
                  be an infringement thereof; and/or

            (ii)  any change in the process  involved in the construction of the
                  products or their  specifications  which has been developed or
                  acquired  with free  rights of  disposal by the Company or the
                  Distributor (as the case may be) and used  commercially by the
                  Company or the Distributor, during the term of this agreement,
                  which  makes the  products  more  efficient  or  adaptable  or
                  enables them to be manufactured more cheaply or efficiently.

            "INDUSTRIAL  PROPERTY RIGHTS" means all know-how,  copyright,  trade
            marks, patents,  designs,  information and documentation (including,
            but not limited to, drawings  relating to the manufacture,  assembly
            and  use  of the  Products  and  sales  and  promotional  literature
            relating to the Products) other than the Trade Mark which in any way
            relates to the Products.

            "KNOW-HOW" means information,  knowledge,  experience, test results,
            formulae,  data,  drawings  and designs in the  possession  and free
            disposal of the Company on the date of this  agreement  or which the
            Company  develops during the life of this agreement and which relate
            to the construction, use, marketing or sale of the products.

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            "LICENSED PATENTS" means:

            (i)   the patents and patents applications  particulars of which are
                  set out in schedule 6 hereto (or which are added to schedule 6
                  dining the term hereof);

            (ii)  any  improvement  patent filed  pursuant to the  provisions of
                  this agreement;

            (iii) any application for utility models;

            (iv)  any continuations-in-part; and

            (v)   any patents granted on the applications set out in (i) to (iv)
                  above.

            "MARKET" means the market for the Products  within the Territory set
            out in  schedule 2 as  amended  from time to time  pursuant  to this
            agreement.

            "NET SELLING PRICE" means twelve thousand US Dollars (US$12,000).

            "PRODUCTS"  means those products  currently being  manufactured  and
            sold by the Company set out in schedule 1 together  with any extras,
            accessories,  spare parts and  maintenance  equipment  supplied with
            them and all modifications,  developments and improvements  relating
            to the  Products  introduced  or acquired by the Company  during the
            continuance of this agreement.

            "SALE"  means,  with  respect  to  any  Product,  the  sale,  lease,
            licensing,  transfer or other disposal of that Product or any rights
            in it  (whether  or not for value or at arm's  length and whether or
            not individually or in combination with any other  Product(s]).  For
            the purposes of this agreement,  in the context of sales made by the
            Distributor  on  its  own  account  of  Products  sold  to it by the
            Company,  "Sale" shall include  resale where the context  admits and
            "sell" and "sold" shall be construed accordingly.

            "SHAREHOLDERS  `AGREEMENT'"  means an agreement  entered into on the
            date  of  this  agreement  between  the  Company,   its  independent
            investors and Norman Hay Plc.

            "SPECIFICATION"  means the  specification of the Products set out in
            schedule 5 or any other specification  agreed in writing between the
            parties.

            "TERRITORY"  means the  territories set out in schedule 2 as amended
            from time to time pursuant to this agreement.

            "TRADE MARK" means the name and mark details of which are set out in
            schedule 7.


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      1.2   Reference  to a  clause,  paragraph  or  schedule  is  to a  clause,
            paragraph  or  schedule of or to this  agreement  unless the context
            requires otherwise.

      1.3   Reference  to the singular  includes the plural and vice versa,  and
            reference to a gender  includes the other genders unless the context
            requires otherwise. Reference to a "person" includes any individual,
            firm, unincorporated association or body corporate.

      1.4   Reference  to a statutory  provision  includes a  reference  to that
            statutory  provision  as  from  time to time  amended,  extended  or
            re-enacted and any regulations made under it.

      1.5   The headings in this  agreement  are for ease of reference  only and
            shall not affect its construction or interpretation.

2.    APPOINTMENT

      The Company  appoints the  Distributor as its distributor in the Territory
      for the Sale of Products in  accordance  with the terms and  conditions of
      this  agreement.  The  Distributor's  appointment  under this agreement is
      exclusive  (but for the terms of Sherman  Agreement (as defined  below) in
      relation to the Market and the Company shall not sell or appoint any other
      distributor  or agent for the Sale of  Products  in the Market  within the
      Territory. In addition, in the first year of the agreement the Distributor
      shall be  appointed on an  exclusive  project  basis (but for the terms of
      Sherman  Agreement (as defined below)) in respect of  government/statutory
      third world clean up and  manufacturing  effluent  following  consultation
      with Ovation on the terms of appointment for such project.

3.    TERMS OF BUSINESS

      3.1   All Sales of  Products by the  Company to the  Distributor  shall be
            made in accordance with the terms of this agreement.

      3.2   The Products shall be sold by the Company to the  Distributor at the
            list  prices of the  Company  set out in  schedule 3, as varied from
            time to time by written agreement of the parties.

      3.3   All  prices  for  the  Products  exclude  any  charge  for  postage,
            packaging,  carriage,  freight,  any  handling  charges,  insurance,
            import or other duties and value added tax or other applicable sales
            tax, all of which will be  separately  invoiced to, and paid by, the
            Distributor and the Distributor  hereby  undertakes to indemnify the
            Company  accordingly  in respect of any  liability,  expense,  cost,
            damage  or  other  loss  of  whatever  kind  arising,   directly  or
            indirectly,  out of the  Distributor's  failure  to  make  any  such
            payment.


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      3.4   The Company  shall allow the  Distributor  such  discount for prompt
            payment or  otherwise as the Company may from time to time notify to
            the Distributor  provided that the Distributor is not then in breach
            of any of the terms of this agreement.

      3.5   The  Distributor  shall pay the Company for all Products sold to the
            Distributor  under  this  agreement  within 45 days from date of the
            relevant  invoice.  All payments  for Products  shall be made by the
            Distributor  in US dollars (US$) or such other currency in which the
            Company  notifies the  Distributor of the price of the Products from
            time to time. In addition to the  Company's  rights to suspend under
            clause  17, if the  Distributor  does not pay any  amount or amounts
            when due,  the Company may charge  interest  (calculated  on a daily
            basis) at the  statutory  rate of eight percent (8%) per annum above
            the base rate of the Bank of England from time to time, from the due
            date  until  the date of  actual  payment  (whether  before or after
            judgement).  The Distributor's common law right of set off is hereby
            expressly  excluded and all sums due from the  Distributor  shall be
            paid by the  Distributor  to the Company  free from any  deductions,
            withholding or set off of any kind.

      3.6   The Products shall be promoted, marketed and sold by the Distributor
            bearing  the  Trade  Mark.   The  Company   hereby   grants  to  the
            Distributor,  and the Distributor hereby accepts from the Company, a
            non-exclusive, non-transferable, and royalty-free license to use the
            Trade Mark and other  intellectual  property  notified in writing by
            the Company from time to time (the  "Intellectual  Property") solely
            in connection with the promotion,  advertising  and  distribution of
            the  Products.  The  Distributor  shall  not  use any  other  marks,
            intellectual   property  or  trade  names  in  connection  with  the
            marketing and  distribution of the Products unless  otherwise agreed
            with the Company.  The  Intellectual  Property  shall be used by the
            Distributor  solely  in  accordance  with the  Company's  standards,
            specifications  and  instructions,  but in no event beyond the terms
            set down in this  agreement.  The  Distributor  is not  granted  any
            right,  title or  interest  in the Trade  Mark or  generally  in the
            Intellectual Property, other than the foregoing limited license, and
            the  Distributor  shall not use any such Trade Mark or  Intellectual
            Property  as part of the  Distributor's  corporate  or trade name or
            otherwise than as expressly permitted hereunder, nor shall it permit
            any third party to do so. In  addition,  the  Distributor  shall not
            register  or use  any  of the  Company's  trademarks,  trade  names,
            slogans,  intellectual property,  logos or packaging designs (or any
            similar trademarks,  trade names,  slogans,  intellectual  property,
            logos or packaging  designs)  except as  specifically  authorised in
            writing in  advance.  Sale by the  Distributor  of  Products  in the
            packages in which they were shipped shall not be considered  use for
            this  purpose.  The  Distributor  shall  not  remove  or  alter  any
            trademarks,  trade names,  copyright notices,  labels, tags or other
            identifying  marks,  symbols  or legends  affixed  to the  Products,
            containers  or  packages  by  or  on  behalf  of  the  Company.  The
            Distributor  shall not add any  trademarks,  trade names,  copyright
            notices, labels, tags or other


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            identifying  marks,  symbols or legends to the Products or packaging
            without  the  prior  written  consent  of the  Company.  Should  the
            Distributor  become  aware  of the  fact  that  a  third  party  has
            infringed upon the patent rights, trademarks or trade names or other
            intellectual property of the Company or that such rights, trademarks
            or trade  names or other  intellectual  property  are  likely  to be
            infringed,  the Distributor shall immediately  inform the Company of
            the facts and at the same time shall make  reasonable  efforts  (but
            only if specifically requested by the Company) to assist the Company
            in prevention and/or remedy of such infringement.  The Company shall
            have no  obligation  to the  Distributor  under  this  agreement  to
            prevent or remedy any such infringement.

      3.7   Delivery  or  performance  dates in  relation  to the  supply by the
            Company of  Products  are  approximate  only and,  unless  otherwise
            expressly  stated,  time is not of the  essence  for  delivery.  The
            Company will use  commercially  reasonable  endeavours to deliver or
            procure the delivery of the Products by the stated delivery date but
            may suspend or delay  delivery  and will not be liable for any loss,
            damage,  cost, expense or other liability whatsoever in the event of
            late  delivery  or   non-delivery  of  Products  or  any  instalment
            outstanding.  The  Distributor  shall not be  entitled  to refuse to
            accept late delivery or treat late delivery as a breach of contract.
            Title to each of the Products  shall  transfer upon the later of (a)
            delivery of such Product to the  Distributor  (or as agreed with the
            Distributor) or (b) receipt by the Company of payment in full of all
            sums due and owing from the Distributor to the Company,  pursuant to
            this  agreement.  The  Company at all times  reserves  the legal and
            beneficial  ownership in Products  sold by it until payment has been
            made by the Distributor in full of all sums owing by the Distributor
            to  the  Company,   pursuant  hereto  and  the  Distributor   hereby
            authorises the Company to enter onto the Distributor's  premises (or
            any other  premises at which  Products may be stored) to recover any
            Products which are not paid for in accordance with the terms of this
            agreement.  Risk of loss or damage to any Product  shall pass to the
            Distributor  upon the earlier of (a) delivery of such Product to the
            freight carrier  nominated by the Distributor (or as agreed with the
            Distributor)  or (b)  receipt by the  Company of payment in full for
            such Product from the Distributor.

      3.8   In  addition  to  clauses  3.1 - 3.7.  The  supply  of the  first 10
            Products shall be subject to the following terms.

            3.8.1 Upon signature of this agreement the Distributor will place an
                  order  for 10  Products  and  will  make a  pre-payment  of US
                  $80,000.

            3.8.2 Delivery of the 10 Products  referred to in clause 3.8.1 shall
                  take place as follows:

                  3.8.2.1 the  first  Alpha  Product  which  shall be a test and
                          evaluation  unit  will be  delivered  no  later  than
                          30 January 2003; and


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                  3.8.2.2 the  remaining  nine  Products  which  shall  be  full
                          production  units  will be  delivered  no  later  than
                          six months after receipt of the signed purchase order.

            3.8.3 It is a  condition  of  the  Distributor  entering  into  this
                  agreement that the Company  provide an on demand  guarantee in
                  favour of the Distributor to the value of US $80,000 of common
                  stock of the Company at $15 per share,  such  guarantee  shall
                  expire on the later of (i) the date  which is three (3) months
                  after the date of  signature  of this  agreement  and (ii) the
                  delivery of the first ten Products to the  Distributor  (or as
                  agreed with the Distributor).

            3.8.4 During  2003  the   Distributor   shall  use  all   reasonable
                  endeavours to place further orders consistent with demand.

            3.8.5 Not later than 31 December  2003 the Company shall supply five
                  Beta  Products  to  the  Distributor  such  Products  to be in
                  satisfaction   of  the   Company's   obligation   to   provide
                  consideration  for its  investment in the share capital of the
                  Distributor pursuant to the Shareholders' Agreement.

4.    SPECIFICATION OF THE PRODUCTS

      4.1   The Company shall use all  reasonable  endeavours to ensure that all
            Products  sold by the  Company to the  Distributor  pursuant to this
            agreement   shall   conform  in  all   material   respects   to  the
            Specification  and,  subject  to the  provisions  of  clause  5, the
            Distributor shall be entitled to reject any quantity of the Products
            which are not in accordance with the Specification.

      4.2   The Company  shall  consult with the  Distributor  from time to time
            during  the  continuance  of  this  agreement  to  ensure  that  the
            Specification is acceptable to both parties.

5.    MANUFACTURE AND DELIVERY OF THE PRODUCTS

      5.1   The Company shall use all reasonable  endeavours to manufacture  and
            maintain sufficient stocks of the Products to fulfil its obligations
            under this agreement.  No accepted order for Product or Products may
            be  modified  or  cancelled  except in writing  and as agreed by the
            Company and any terms or  conditions  of  purchase,  order or change
            order which add to,  modify or conflict with the terms or conditions
            of this agreement shall be deemed excluded and of no legal effect as
            between the parties.

      5.2   Delivery of the Products shall take place FOB Port.

      5.3   The  Distributor  shall,  within  30  days  of the  arrival  of each
            delivery of the Products at the Distributor's  premises, give notice
            to the  Company  of any  defect by  reason of which


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            the  Distributor  alleges  that the  Products  delivered  are not in
            accordance  with the  Specification  and which should be apparent on
            reasonable  inspection.  All claims must be in writing,  must recite
            the nature and details of the claim, the date the cause of the claim
            was first observed and the serial number of the Product concerned.

      5.4   If the  Distributor  rejects any delivery of the Products  which are
            not in accordance with the Specification,  the Company shall, within
            30 days of being requested to do so by the  Distributor,  repair the
            relevant  Products  or  supply  replacement  Products  which  are in
            accordance with the  Specification (in which event the Company shall
            not be  deemed  to be in  breach  of  this  agreement  or  have  any
            liabilities to the Distributor) or shall notify the Distributor that
            it is unable to do so. For the avoidance of doubt, the Distributor's
            sole remedy against the Company with respect to Products  considered
            to  be  defective  or  faulty  shall  be to  require,  at  the  sole
            discretion of the Company, (i) the repair of such Products; (ii) the
            replacement  of such  Products  with  Products  which conform to the
            requirements  set out in this agreement;  or (iii) the refund of the
            purchase  price  of such  Products  paid by the  Distributor  to the
            Company excluding any freight, taxes or other charges.

      5.5   If the  Company  is  unable  to meet the  requirements  of any order
            placed  on it by the  Distributor  in terms  of  either  numbers  of
            Products  or delivery  times,  or if the Company is unable to repair
            the  Products  or supply  replacement  Products in  accordance  with
            clause 5.4 within six months of a request from the Distributor  then
            the Distributor shall,  subject to payment of a royalty of 5% of the
            Net Selling Price of the Products, be entitled to manufacture itself
            or to obtain from any other person such  quantity of the Products as
            the Company has been unable so to supply, and that quantity shall be
            deemed,  for the  purposes  only of clause 10, to have been  ordered
            from the Company.

6.    OBLIGATIONS OF THE DISTRIBUTOR

      6.1   The  Distributor  undertakes  and agrees  with the  Company  that it
            shall, at all times and at its own expense during the continuance of
            this agreement:

            6.1.1   use its best  endeavours to sell and promote the Sale of the
                    Products  and,  subject to the Company being able to supply,
                    the same to  ensure  that it  maintains  adequate  stocks of
                    Products to meet demand and to promptly  fulfil  orders from
                    its customers within the Territory;

            6.1.2   employ  such   numbers  of   technically   qualified   sales
                    personnel,  able  efficiently to demonstrate and explain the
                    Products,  as may be necessary  to ensure full  promotion of
                    the Products throughout the Territory;


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            6.1.3   supply  the  Company   with  a  report  every  three  months
                    informing.  the Company of the progress and  development  of
                    the  market for the  Products  in the  Territory  and of all
                    regulations  affecting the import,  distribution and Sale of
                    the Products in the Territory;

            6.1.4   send to the Company, on reasonable request,  such details of
                    future Sales and stocks and other  statistical  forecasts as
                    the Company may  reasonably  require for budgetary  purposes
                    and for programming future production;

            6.1.5   promptly  submit to the Company all  complaints  relating to
                    the Products together with all available  evidence and other
                    information  relating to those complaints and forward to the
                    Company,   at  the  Company's   expense,   for  examination,
                    representative  samples of the  Products in respect of which
                    complaints  are made  (including,  but not  limited to, full
                    identification of such Products including Product references
                    and numbers);

            6.1.6   in all relevant  correspondence  and other dealings relating
                    directly or indirectly to the Sale of the Products,  clearly
                    indicate  that  it  is  acting  as  principal,  and,  in  no
                    circumstances,  expressly  or  impliedly do any act or thing
                    which may cause third  parties to think that it is acting as
                    an agent of the Company;

            6.1.7   comply with all applicable laws and  regulations  during the
                    course  of  performance  of this  agreement  and in  related
                    activities and be responsible  for obtaining and maintaining
                    in force all such  licences,  consents and  approvals of any
                    governmental  or   quasi-governmental  or  other  regulatory
                    authority as may be required in connection  with the import,
                    advertising,  storage, marketing and Sale of the Products in
                    the  Territory and shall  indemnify the Company  against any
                    and all  loss,  damage,  costs,  expenses,  claims  or other
                    liabilities which may arise, directly or indirectly,  out of
                    the  Distributor's  failure to comply  with its  obligations
                    hereunder;

            6.1.8   instruct the purchasers  and users in the correct  operation
                    and safe  use of the  Products  [and  supply  to every  such
                    person   a  copy   of  the   Company's   service/operational
                    manual/guarantee;

            6.1.9   make  available  after-sales  service and service  under the
                    Company's guarantee,  on a free of charge basis to all users
                    of the Products  situated in the  Territory  (whether or not
                    such Products were purchased from the Distributor);

            6.1.10  keep full accounts and records showing clearly all enquiries
                    and  transactions   relating  to  the  Products  and  permit
                    authorised  officers of the Company at all reasonable  times
                    to have  access to the  premises  where  such  accounts  and
                    records are kept for the purpose of inspecting the same;


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            6.1.11  respond promptly to all enquiries received from potential or
                    actual  customers  and to all  referrals  whether  from  the
                    Company or elsewhere;

            6.1.12  provide  the  Company  in advance  with full  details of its
                    proposed marketing and promotional  activities regarding the
                    Products  including,  without  limitation,  a  copy  of  its
                    proposed  business plan for approval by the Company and such
                    other  information  and/or  documentation as the Company may
                    reasonably require;

            6.1.13  upon request from the Company, return to the Company or make
                    such  other  disposition  (including,  but not  limited  to,
                    recalling  Products)  as the  Company  shall  direct  of any
                    portion  of the  Products  determined  by the  Company to be
                    outdated or to otherwise  require such  disposition.  In the
                    event of any such return or disposition  before such time as
                    the  Products   become  outdated  based  on  their  labelled
                    expiration  date,  the  Company  shall  either  replace  the
                    Products or reimburse the  Distributor in an amount equal to
                    the  original  basic price paid by the  Distributor  for the
                    Products excluding any freight,  taxes or other charges. The
                    Distributor  acknowledges and agrees that its sole remedy in
                    relation  to any  such  return  or  disposition  shall be to
                    receive  replacement   Products  or  reimbursement  per  the
                    preceding sentence.  In no event shall the Company be liable
                    for any  special,  consequential  or other  loss or  damages
                    related  to  or  arising   out  of   (whether   directly  or
                    indirectly)  such return or  disposition  (save that nothing
                    herein  shall  exclude  any  liability  of the  Company  for
                    personal  injury or death  occurring  through the  Company's
                    negligence).  The  Distributor  hereby  agrees  to  maintain
                    records sufficient,  in the Company's reasonable opinion, to
                    enable an effective recall of Products that it sells, and to
                    co-operate  fully and at its own cost in any  recall  effort
                    conducted by the Company.  The Company expressly retains the
                    right to direct any recall of Products in the Territory; and

            6.1.14  maintain in force, during the term of this agreement and for
                    as long as a practical need exists,  one or more policies of
                    liability insurance which shall cover all liabilities of the
                    Distributor, whenever arising, attributable to Products sold
                    under this  agreement  and the risk of loss or damage to the
                    Products   whilst   risk  is  with  the   Distributor.   The
                    Distributor  shall also  maintain all  necessary  insurances
                    required  by  applicable   law(s)   within  the   Territory,
                    including,   without   limitation,    employer's   liability
                    insurance.

      6.2   The Distributor shall not:

            6.2.1 solicit  customers for the Products  outside the Market within
                  the  Territory,  or establish any branch or maintain any depot
                  outside the Territory for the Sale of the Products;


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            6.2.2 make purchases or sales or incur any  liabilities  whatever on
                  behalf of the  Company or attempt to bind the Company to third
                  parties in any manner whatever or participate in activities or
                  practices that may injure the  reputation of the Company,  the
                  Company's  businesses  (or the  goods  and  services  provided
                  pursuant thereto) or the Products;

            6.2.3 in any way pledge the credit of the Company;

            6.2.4 use the name of the  Company  or any  part of it or the  trade
                  names of the  Products  or any  part of them in the  corporate
                  name or the title of the Distributor or any associated company
                  or on any advertisement  (including public signs and displays)
                  or use such name or trade names in any manner as a description
                  of the business of the  Distributor or any associated  company
                  without the prior written consent of the Company provided that
                  the  Distributor  may,  on its letter  headings  and  business
                  forms,  describe  itself as an  exclusive  distributor  in the
                  Territory for the Products;

            6.2.5 make any  representation  or give any  warranty in relation to
                  the Products unless such  representation  or warranty has been
                  previously approved in writing by the Company;

            6.2.6 deface or alter the Products or their  packaging in any manner
                  whatever  and,  in  particular,  alter,  remove  or in any way
                  tamper  with  any  warnings  or  instructions  for  use of the
                  Products  or any  indication  of the  source  of origin of the
                  Products;

            6.2.7 and shall procure that none of its  employees,  consultants or
                  agents,  either  directly or  indirectly  manufacture,  offer,
                  promote,  sell or distribute goods which are of the same kind,
                  similar to or compete with the Products. Subject to clause 5.5
                  the  Distributor  shall further obtain the Products for resale
                  only from the Company or from such other source as the Company
                  may  expressly  authorise  or direct in writing and shall not,
                  and shall procure that none of its  employees,  consultants or
                  agents,  actively advertise,  promote or solicit customers for
                  the  Products  outside  the Market  within the  Territory.  In
                  addition,  the  Distributor  shall not, and shall procure that
                  none  of  its  employees,  consultants  or  agents,  sell  the
                  Products to customers  outside the Market within the Territory
                  unless  expressly   authorised  by  the  Company  in  writing.
                  However,  should the parties  continue this  agreement  beyond
                  five  years  after  the  date  of  signature,   the  foregoing
                  restriction  in the first  sentence of this clause 6.2.7 shall
                  apply  only  to the  extent  that  such  competitive  products
                  account  for  more  than  20% of  the  combined  sales  of the
                  Products and competitive  products by the  Distributor  during
                  the preceding 12-month period.  Notwithstanding the foregoing,
                  nothing in this clause 6.2.7 shall  preclude  the  Distributor
                  from  responding to  unsolicited  requests from any individual
                  customer  outside the Market but within a Member  State of the
                  European  Union  or  the  European  Economic  Area,


                                       10
<PAGE>

                  wherever located,  who purchases Products with a view to their
                  use within the  territory  of a Member  State of the  European
                  Union or European Economic Area; and

            6.2.8 and shall  procure so far as is  reasonably  possible  that no
                  third  party  shall,  alter,  modify,  destroy,  tamper  with,
                  reverse engineer or otherwise deal with any Product sold to it
                  pursuant  hereto in a manner  other than as  contemplated  and
                  permitted  hereunder,  without the Company's  express  written
                  consent (which may be withheld at its sole discretion).

7.    OBLIGATIONS OF THE COMPANY

      The  Company  undertakes  and agrees with the  Distributor  that it shall,
      during the continuance of this agreement:

      7.1   provide  such  technical  assistance  as  it  may  deem  appropriate
            including, if necessary,  the training of a reasonable number of the
            Distributor's personnel at the Company's premises at the cost of the
            Distributor. The content and duration of any such training programme
            shall be  determined  by the  Company  after  consultation  with the
            Distributor;

      7.2   send (subject to prior agreement with the  Distributor),  at its own
            cost, a  representative  to visit the Distributor for the purpose of
            providing  advice in connection with the Products  and/or  promoting
            Sales of the  Products  and shall,  at the cost of the  Distributor,
            send  such  a  representative  when  reasonably   requested  by  the
            Distributor  including  (without  limitation)  a  representative  to
            provide  advice and  assistance  in  connection  with  trade  fairs,
            exhibitions or demonstrations;

      7.3   meet the Distributor at regular  intervals to discuss all aspects of
            the Sale and  marketing  of the  Products  and the  best  method  of
            promoting them;

      7.4   in  appointing  other  distributors  for the  Sale  of the  Products
            outside the Territory,  make it a condition of such appointment that
            such other  distributors  shall not,  within  the  Territory  and in
            relation to the Products,  seek customers or establish any branch or
            maintain any distribution depot;

      7.5   pass any queries  relating to the Products which it may receive from
            within the Territory to the Distributor; and

      7.6   to make a  payment  to the  Distributor  of $200 in  respect  of any
            product  sold  pursuant  to  the  distribution  agreement  dated  22
            December 1997 between (1) the Company and (2) Wilfred  Sherman d/b/a
            WMS Enterprises (the "Sherman  Agreement") provided that the Company
            shall be under  no  obligation  to make any  payment  in  excess  of
            $1,500,000 in aggregate;  and  indemnify  and keep  indemnified  the
            Distributor against all liability,  loss, damage, expenses and costs
            incurred by


                                       11
<PAGE>

            the  Distributor  which  result  directly  or  indirectly  from  the
            operation of or activities  pursuant to the Sherman  Agreement  such
            liability not to exceed $1,500,000.

8.    MODIFICATIONS

      8.1   Subject to clause 8.2, the Company reserves the right to discontinue
            the  manufacture  or supply of any of the  Products and make changes
            and improvements at any time in the construction or design of any of
            the Products  without  incurring any  obligation or liability to the
            Distributor or the Distributor's customers.

      8.2   The Company shall inform the  Distributor  of such  withdrawals  of,
            modifications  to,  or  improvements  to,  the  Products,   wherever
            possible  before their  implementation,  but otherwise as soon as is
            reasonably practicable.

9.    PURCHASE TARGETS

      9.1   Up to 31  December  2003 the  Distributor  shall use all  reasonable
            endeavours  to achieve the minimum  purchase  targets  specified  in
            schedule 4. Purchase  targets for the second year will be subject to
            agreement  following  delivery  of  the  first  10  Products  and in
            subsequent  years minimum  purchase targets shall be agreed annually
            in  advance.  In the event that the parties do not agree the minimum
            purchase  targets within thirty (30) calendar days of the end of the
            preceding  year in which  minimum  purchase  targets  were set,  the
            previous year's minimum  purchase  targets shall be increased by 10%
            for first 3 years  following the date of this Agreement and shall be
            deemed to be the minimum purchase targets for the year in respect of
            which agreement was not reached.

      9.2   If, in any period so specified in schedule 4, the number of Products
            purchased  by the  Distributor  in respect of the  Territory in that
            period  is less  than the  amount  of the  stated  minimum  purchase
            targets for that  period,  the  Company  shall be  entitled,  at its
            option,  by notice to the  Distributor  given within ninety calendar
            days of the end of  such  period,  to  terminate  the  Distributor's
            exclusivity  with effect from ninety (90) calendar days after giving
            such notice.

10.   DEFECTIVE PRODUCTS

      In the  event  of  any  of the  Products  supplied  to a  customer  of the
      Distributor being found by the Distributor to be defective within one year
      of  despatch  by  the  Company  or  within  nine  months  of  Sale  by the
      Distributor, whichever is the shorter, the Distributor shall submit a full
      report to the Company  about it  immediately  together with an estimate of
      the cost of  rectification.  On receipt of such report,  the Company shall
      immediately  instruct the Distributor to carry out such  rectification  or
      shall  request the  Distributor  to return the  defective  Products to the
      Company  for  repair or  replacement.  In respect  of such  Products,  the
      Company shall pay the cost of  rectification  or the cost of transport and
      insurance  from the  Distributor's  depot to the Company.  In the event of


                                       12
<PAGE>

      such Products  being found by the Company to be defective  owing to faulty
      workmanship  or  materials,  the Company  shall  either,  at the Company's
      option,  put such  Products into good working order and return them to the
      Distributor  carriage  paid or shall  replace  such  Products and despatch
      those  replacements to the  Distributor  carriage paid or shall refund the
      purchase  price  of  such  Products.  For  the  avoidance  of  doubt,  the
      Distributor's  sole remedy  against the Company  with  respect to Products
      considered  to be  defective  or faulty  shall be to require,  at the sole
      discretion  of the  Company,  (i) the  repair of such  Products;  (ii) the
      replacement   of  such  Products  with  Products   which  conform  to  the
      requirements  set  out in this  agreement;  or  (iii)  the  refund  of the
      purchase  price of such  Products paid by the  Distributor  to the Company
      excluding any freight, taxes or other charges.

11.   INDUSTRIAL PROPERTY RIGHTS

      11.1  The Distributor  acknowledges that title to the Industrial  Property
            Rights is and remains at all times  exclusively  the Company's,  and
            that  the  Distributor  has no  right  to  use,  disclose,  copy  or
            otherwise  dispose of the same except in accordance with any express
            authority under this agreement and, further, that any such authority
            shall   immediately   cease  on  termination  of  the  Distributor's
            appointment under this agreement  whatever the cause of termination.
            The Distributor  shall, on termination,  return to the Company,  and
            shall not retain in any way or in any format, all documents relating
            in any way to the Industrial Property Rights and any and all copies,
            extracts or  abstracts  of them in  whatever  format and on whatever
            media.

      11.2  The  Distributor  shall  immediately  bring to the  attention of the
            Company  any  improper  or  wrongful  use  in the  Territory  of any
            Industrial   Property  Rights  relating  to  the  Products  (or  any
            component part of the Products) which comes to its notice, and shall
            use every effort to safeguard  the  Industrial  Property  Rights and
            interests  of the Company and shall assist the Company in taking all
            steps to  defend  the  Industrial  Property  Rights  of the  Company
            including,  at the specific request of the Company,  the prosecution
            of any actions which the Company may deem  necessary to commence for
            the protection of any of its rights.

12.   GRANT OF PATENT LICENCE

      12.1  For the purposes of clause 5.5 only, and only to the extent that the
            circumstances  referred to in clause 5.5 are operative,  the Company
            grants to the Distributor:

            12.1.1  the exclusive  licence  (subject to the terms of the Sherman
                    Agreement) in the Territory  under the Licensed  Patents for
                    the construction, marketing, use and/or sale of the Products
                    in the Territory according to the Company's  instructions on
                    the terms and conditions of this agreement;


                                       13
<PAGE>

            12.1.2  the  exclusive  right  (subject  to the terms of the Sherman
                    Agreement)  to use the  Know-how for the  construction,  use
                    and/or sale of the  Products in the  Territory  according to
                    the Company's  instructions  on the terms and  conditions of
                    this agreement; and

            12.1.3  the  right to grant  non-exclusive  sub-licences  under  the
                    Licensed Patents and the Know-how to  subcontractors  in the
                    Territory  to   manufacture   Products  for  supply  to  the
                    Distributor.

13.   WARRANTIES

      13.1  The Company hereby warrants to the Distributor that:

            13.1.1  it has the  right to grant the  licence  rights  granted  by
                    clause 12;

            13.1.2  it is  not  aware  (at  the  date  hereof),  without  having
                    undertaken any  investigation  whatsoever,  of any matter or
                    prior art that would  invalidate  or impede the grant of any
                    of the Licensed patents and that the  construction,  use, or
                    sale of the  Products  does not to the  Company's  knowledge
                    infringe any third party's  intellectual  property rights in
                    the Territory;

            13.1.3  it has not entered  into any (and there are no)  outstanding
                    assignments,  obligations,  charges  or  agreements,  either
                    written,  oral, or implied, which are inconsistent with this
                    agreement; and

            13.1.4  save in respect of the Sherman Agreement,  it has not at any
                    time  granted a licence  and/or  rights  in  respect  of the
                    Products to any other person in the Territory.

      13.2  The  warranties  set  forth or  referred  to in this  agreement  are
            intended  solely for the benefit of the  Distributor  and may not be
            made to the Distributor's  customers. The warranties set forth above
            are in lieu of all other warranties,  express or implied,  which are
            hereby  disclaimed and excluded by the Company,  including,  without
            limitation,  any  warranty  of  merchantability  or  fitness  for  a
            particular  purpose or use and all obligations or liabilities on the
            part of the  Company for  damages  arising out of or in  conjunction
            with the use, repair or performance of the Products (save in respect
            of personal injury or death caused by the Company's negligence which
            is not excluded hereby).

      13.3  Notwithstanding  anything  to the  contrary in this  agreement,  the
            Company  shall not  (except in respect of death or  personal  injury
            caused by its  negligence) be liable to the Distributor by reason of
            any non-fraudulent  representation or implied warranty, condition or
            other term or any duty at common law,  any tort or under the express
            terms of this agreement,  for any consequential loss (whether direct
            or  indirect),  loss of profits,  loss of income,  loss of business,
            loss of revenue, loss


                                       14
<PAGE>

            of  goodwill,  loss  of  anticipated  savings,  loss  of data or any
            indirect  loss or damage  howsoever  caused.  This clause 13.3 shall
            apply whether or not the Company was advised of the  possibility  of
            such loss and whether or not such damage or loss is foreseeable. The
            Company's  total  liability  arising  under or in  relation  to this
            agreement or its  termination  (whether in  contract,  for breach of
            warranty,  tort including negligence,  breach of statutory duty, non
            fraudulent  misrepresentation,  under  any  indemnity  or  otherwise
            howsoever) shall not exceed in aggregate the aggregate price paid by
            the  Distributor  to the  Company  for  Products  pursuant  to  this
            agreement in the relevant  calendar year in which the claim is made,
            except  in  respect  of  death  or  personal  injury  caused  by the
            Company's negligence or fraudulent misrepresentation,  for which the
            Company's liability is unlimited.

14.   PAGE MISSING!!!!!!!!!!!!!

15.   DEFENCE OF LICENSED PATENTS

      15.1  The  Distributor  shall  forthwith  give  notice in  writing  to the
            Company of any infringement or suspected or threatened  infringement
            in the Territory of any of the Licensed  Patents  (which  expression
            for the purpose of this clause shall be deemed to include any Patent
            granted in the Territory in respect of an  Improvement)  which shall
            at any time come to its knowledge.

      15.2  The Company shall decide in its absolute discretion whether and what
            steps  should be taken to prevent  or  terminate  such  infringement
            including the institution of legal  proceedings  where necessary and
            the Company shall notify the Distributor in writing of such decision
            as soon as reasonably  possible  following the receipt of the notice
            from the Distributor under this clause 15.

      15.3  The Company  shall have sole control over and shall conduct any such
            action(s) as it shall deem necessary in pursuance of this clause.

      15.4  The Distributor  agrees,  at the expense of the Company,  to provide
            reasonable  assistance  to the  Company in  trials,  suits and other
            actions against infringers of the Licensed Patents.

16.   CONFIDENTIALITY

      16.1  The Distributor  undertakes with the Company that it will not during
            the  continuance  of this  agreement  or at any  time  after  it has
            terminated  divulge  or  communicate  to any person any of the trade
            secrets  or  other  confidential  information,   including,  without
            limitation,  information  relating to the  manufacturing  processes,
            affairs or business or method of carrying on business of the Company
            which it may have  received or obtained  in the  performance  of, or
            otherwise as a direct or indirect result of, its  appointment  under
            this agreement.


                                       15
<PAGE>

      16.2  The  Distributor  further  undertakes  that it will  not at any time
            during the  continuance  of this  agreement  or during the three (3)
            year period after it has terminated  (such period  commencing on the
            date of termination) entice or induce or attempt to entice or induce
            away  from the  Company  any  person  who,  at any time  during  the
            continuance of this agreement, is, or has been, employed,  appointed
            or  engaged  by  the  Company  as  an  employee,   agent,  director,
            consultant or independent  contractor employed, and who by reason of
            such employment, appointment or engagement and in particular his/her
            seniority   and   expertise  or   knowledge  of  trade   secrets  or
            confidential information of the Company or knowledge of or influence
            over the clients,  customers or suppliers of the Company,  is likely
            to be able to assist or benefit a business in or  proposing to be in
            competition with the Company.

      16.3  Whilst  the  restrictions  in this  clause  16 are  regarded  by the
            parties as fair and  reasonable,  it is hereby declared that each of
            the  restrictions  in this clause 16 is intended to be separate  and
            severable.  If any restriction is held to be  unreasonably  wide but
            would be valid if part of the wording were deleted, such restriction
            will apply with so much of the wording  deleted as may be  necessary
            to make it valid.

17.   DURATION AND TERMINATION

      17.1  Either party may terminate this  agreement  immediately by notice if
            any of the following events occurs:

            17.1.1  the other party fails to observe or perform any of the terms
                    or  conditions  of this  agreement  or is in  breach  of any
                    contract  for the  purchase  by it of  Products  under  this
                    agreement  and such default or breach (if capable of remedy)
                    continues  for a period of ninety (90)  calendar  days after
                    notice,  specifying  the breach and requiring the same to be
                    remedied, has been given;

            17.1.2  an  order  is  made  or  a  resolution  is  passed  for  the
                    winding-up  of a party,  except  in the case of a  voluntary
                    winding-up for the purposes of a scheme of reconstruction or
                    amalgamation   the  terms  of  which  have  previously  been
                    approved in writing by the other party;

            17.1.3  an  administrative  order is made or a petition  for such an
                    order is presented in respect of a party;

            17.1.4  a receiver  (which  expression  includes  an  administrative
                    receiver)  is  appointed in respect of a party or all or any
                    of its assets;


                                       16
<PAGE>

            17.1.5  a party is unable to pay its debts  within  the  meaning  of
                    section 123 of the Insolvency Act 1986; or

            17.1.6  any voluntary arrangement is proposed under section 1 of the
                    Insolvency Act 1986 in respect of a party.

            17.1.7  any event  analogous to those described in clauses 17.1.3 to
                    17.1.6 occurs in any  jurisdiction  in which either party is
                    incorporated or resident or carries on business;

            17.1.8  either party  ceases,  or  threatens  to cease,  to carry on
                    business; and

      17.2  During any period in which a notice to terminate  this  agreement is
            in  force,  the  Company  shall  be  obliged  to  supply  only  such
            quantities of the Products as are required to enable the Distributor
            to meet any purchase  orders already placed with it and to meet such
            demands  for the  Products  as (taking  into  account  the  previous
            performance of the  Distributor)  are likely to exist for Sales made
            during the unexpired period of notice.

      17.3  Notwithstanding  any other  rights or remedies  that the Company may
            have,  whether  pursuant  to this  agreement  or  otherwise,  if the
            Distributor  fails to make payment in respect of any amount when due
            the Company  may,  not  earlier  than  seventy-two  (72) hours after
            providing  the  Distributor  with  written  notice of the  Company's
            intention  to do so,  suspend the sale  and/or  delivery of Products
            until it has  received  payment in full of all  amounts  outstanding
            from the  Distributor.  Such  suspension  shall  not be a breach  of
            contract,  the  Company  shall  not be  bound  to  comply  with  its
            obligations  under this agreement for the duration of the suspension
            and shall have no liability to the  Distributor  or its customers in
            respect of the suspension of sale and/or delivery of Products.

18.   CONSEQUENCES OF TERMINATION

      18.1  Following the expiry or termination of this agreement for any reason
            whatever, the Company shall be entitled (at its option) to do all or
            any of the following:

            18.1.1  cancel  any orders for the  Products  placed  with it by the
                    Distributor and not yet delivered;

            18.1.2  repurchase  unsold  stocks  of  the  Products  owned  by the
                    Distributor  at a  price  equal  to the  price  paid  to the
                    Company by the Distributor  (less any deductions  reasonably
                    made by reason of any damage,  including fair wear and tear)
                    together  with  any  expense  reasonably   incurred  by  the
                    Distributor in arranging for the transport and insurance for
                    redelivery of the same to the Company; and


                                       17
<PAGE>

            18.1.3  call upon the  Distributor to return to the Company,  at the
                    expense of the  Distributor,  all advertising or promotional
                    material relating to the Products and any other documents or
                    papers  relating  to  the  business  of the  Company  or the
                    Products which it has in its possession without retaining in
                    any way or in any format, any copies,  extracts or abstracts
                    of them in whatever format and on whatever media.

      18.2  Upon  termination  of this  agreement  then  the  Company  shall  be
            entitled to purchase  the right to use the Trade Mark on terms to be
            agreed.

19.   FORCE MAJEURE

      19.1  Neither  party  shall be  liable  to the other or be deemed to be in
            breach of this  agreement by reason of any delay in  performing,  or
            failure to perform,  any of its  obligations  under this  agreement,
            save in  respect  of its  payment  obligations  which are  expressly
            excluded from the effect of this clause, if the delay or failure was
            beyond  that  party's   reasonable   control   (including,   without
            limitation,  any strike,  lockout or other industrial action, act of
            God,  war or threat  of war,  accidental  or  malicious  damage,  or
            prohibition  by  governments  or  other  legal  authority).  For the
            avoidance of doubt, no event of force majeure as set out above shall
            excuse  either  party  from  failing  to  comply  with  its  payment
            obligations under this agreement.

      19.2  A party claiming to be unable to perform its obligations  under this
            agreement (either on time or at all) in any of the circumstances set
            out in clause  19.1 must  immediately  notify the other party of the
            nature and extent of the circumstances in question.

      19.3  This  clause 19 shall  cease to apply when such  circumstances  have
            ceased to have effect on the performance of this agreement.

      19.4  If any  circumstance  relied on by any party for the purpose of this
            clause 19  continues  for more than six calendar  months,  the other
            party shall be entitled to  terminate  this  agreement  forthwith on
            provision of written notice to the other party.

20.   ENTIRE AGREEMENT

      20.1  This agreement  constitutes the entire agreement between the parties
            in connection with its subject matter.

      20.2  No party has relied  upon any  representation  or promise  except as
            expressly set out in this agreement.


                                       18
<PAGE>

21.   WAIVER OF RIGHTS BASED ON MISREPRESENTATION

      21.1  Each  party  unconditionally  waives any rights it may have to claim
            damages  against the other on the basis of any statement made by the
            other (whether made carelessly or not) not set out or referred to in
            this agreement (or for breach of any warranty given by the other not
            so set out or referred  to) unless such  statement  or warranty  was
            trade or given fraudulently.

      21.2  Each party unconditionally  waives any rights it may have to seek to
            rescind  this  agreement on the basis of any  statement  made by the
            other (whether made carelessly or not) whether or not such statement
            is set out or referred to in this  agreement  unless such  statement
            was made fraudulently.

22.   ASSIGNMENT

      Either  party shall be  permitted  to assign or transfer  its rights under
      this  agreement and  subcontract  or transfer its  obligations  under this
      agreement to any  associated  company,  group  company or affiliate on the
      provision of written notice to the other party.  Otherwise,  neither party
      shall  without  the  prior  written  consent  of the other  party  assign,
      transfer,  charge or deal in any other similar  manner with this agreement
      or its rights or any part of them under this  agreement,  or purport to do
      any of the same.

23.   RELATIONSHIP OF THE PARTIES

      Nothing  in this  agreement  shall  create,  or be  deemed  to  create,  a
      partnership   between  the  parties.   The  relationship  of  the  parties
      established by this agreement is that of independent contractors,  and not
      an  employment,  agency,  franchise,  joint  venture  or  any  other  such
      relationship. Each of the parties shall conduct its respective business at
      its own initiative, responsibility and expense and shall have no authority
      to incur any obligations on behalf of the other party to this agreement.

24.   COSTS AND EXPENSES

      Except as otherwise stated in this agreement, each party shall pay its own
      costs and expenses in relation to the negotiation,  preparation, execution
      and implementation of this agreement.

25.   EXECUTION

      This agreement may be executed in any number of  counterparts,  and by the
      parties on separate counterparts,  each of which when so executed shall be
      an original,  but all counterparts  shall together  constitute one and the
      same instrument.

26.   AMENDMENT AND WAIVER

      26.1  No variation of this agreement shall be effective  unless it is made
            in writing,  refers  specifically to this agreement and is signed by
            the parties.


                                       19
<PAGE>

      26.2  No waiver of any term,  provision  or  condition  of this  agreement
            shall be  effective  except to the extent made in writing and signed
            by the waiving party.

      26.3  No  omission  or delay on the part of any  party in  exercising  any
            right,  power or privilege  under this agreement  shall operate as a
            waiver by it of any right to  exercise  it in future or of any other
            of its rights under this agreement.

27.   THIRD PARTY RIGHTS

      A person who is not party to this agreement  shall have no right,  whether
      under the Contracts  (Rights of Third  Parties) Act 1999, at common law or
      otherwise howsoever, to enforce any term of this agreement.

28.   LAW AND JURISDICTION

      28.1  This agreement shall be governed by and construed in all respects in
            accordance with English law.

      28.2  The  parties  submit to the  exclusive  jurisdiction  of the English
            courts and agree that, in respect of  proceedings in England and any
            other  jurisdiction,  process may be served on either of them in the
            manner specified for notices in clause 29.

      28.3  The rights set out in this  clause 28 are in  addition  to any other
            manner of service permitted by law.

29.   NOTICES

      29.1  Any notice or other  communication  to be given under this agreement
            must be in  writing  and  may be  delivered  or  sent  by  reputable
            international  overnight  courier or facsimile  transmission  to the
            party to be served at that party's last-known address.

      29.2  Any notice or document shall be deemed served: if delivered,  at the
            time of delivery; if sent by courier, 72 hours after sending; and if
            sent by facsimile transmission, at the time of transmission provided
            a  successful  transmission  report  has  been  received  confirming
            complete transmission.

30.   SURVIVORSHIP

      Any  provisions of this  agreement  stated to survive  termination of this
      agreement shall remain in full force and effect despite termination.

31.   PRECEDENCE AND INVALIDITY

      In the event of any conflict  between the terms of this  agreement and the
      terms of any  other  document,  the  terms of this  agreement  shall  take
      precedence. The invalidity,  illegality or unenforceability of any term of
      this agreement shall not affect the other terms.

AS WITNESS the hands of the parties to this agreement.


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