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                                                                    Exhibit 10.6

                              SUB-LICENSE AGREEMENT

         AGREEMENT made and entered into as of the 28 day of March, 1986, by and
between  INSITUFORM  NORTH AMERICA CORP.,  a corporation  organized and existing
under the laws of the State of Tennessee,  hereinafter referred to as "INAC" and
INSITUFORM  EAST,  INC.,  a Delaware  corporation,  having a principal  place of
business at 3421 Pennsy Drive, Landover, Maryland 20785, hereinafter referred to
as "Operator";

                                   WITNESSETH

         WHEREAS,  INAC has  valuable  experience  in the  practice  of  certain
inventions,  know-how  and  techniques  comprising  the  subject  matter of this
Agreement and possesses valuable information with respect thereto;

         WHEREAS,  INAC is the exclusive  licensee of  INSITUFORM  INTERNATIONAL
N.V., a  corporation  organized  and existing  under the laws of the  Netherland
Antilles  having  a  principal  place  of  business  at P.O.  Box  840,  Curacao
Netherland, Antilles, hereinafter referred to as "International", throughout the
United States of America,  of certain  know-how,  patent  rights and  inventions
relating  to  methods,  apparatus  and  materials  used in the lining of sewers,
tunnels, pipelines and other passageways by impregnating an absorbent layer with
a synthetic  resin,  and retaining such layer in place in such passageway  while
the layer cures or is cured and any improvements thereon, and

         WHEREAS,  Operator is desirous of gaining knowledge of such inventions,
know-how,  techniques, and information and an exclusive right and license within
and  throughout  the  territory  listed  on  Schedule  A herein  to use the same
together with any and all patent rights and  copyrights  relating  thereto under
which INAC has or obtains the right to grant licenses therein;

         NOW,   THEREFORE,   in   consideration  of  the  mutual  covenants  and
undertakings set forth herein, the parties hereto agree, as follows:

         I.       DEFINITIONS.  As employed herein.

         A. "Territory"  shall mean that geographical area set forth on Schedule
A within which  Operator may exploit the various  inventions,  know-how,  patent
rights, techniques and information granted herein.

         B. "Subject  Matter" shall mean and include all methods,  apparatus and
materials  used  in  the  lining  of  sewers,  tunnels,   pipelines,  and  other
passageways (excepting those used to carry natural or manufactured fuel gases or
other  hazardous  gases) by  impregnating  an  absorbent  layer with a synthetic
resin,  and  retaining  such layer in place in such  passageway  while the layer
cures or is cured,  and  including  all  matters  relating  to the  preparation,
installation and completion of said lining.

         C.  "Know-how"  shall mean and include all  technological  information,
ideas and techniques  relating to the Subject  Matter now owned or  subsequently
acquired by INAC or which INAC subsequently acquires the right to communicate to
its licensees within the United States of America, except any information, ideas
or  techniques  which are common  knowledge to the industry or which are readily
available from sources other than INAC.

         D.  "Patent  Rights"  shall mean and  include  the  patents  and patent
applications  designated  in  Schedule B attached  hereto and made a part hereof
together with any and all other patents and patent applications  relating to the
Subject Matter in the Territory under which INAC has, or hereafter acquires, the
right to license others.

         E. "Copyrights" shall mean and include any and all copyrights at common
and/or  statutory  law within the  Territory  which relate to plans,  brochures,
instructions or other means of expression,  including photographs,  diagrams and
other visual  presentations,  having to do with the Subject  Matter or useful in
connection  with the  commercialization  thereof,  which INAC has, or  hereafter
acquires, the right to license others.

         F.  "Materials"  shall  mean  and  include  any and  all  compositions,
products,  components and other materials,  whether patented or unpatented,  for
use in the practice of the Subject  Matter.  Such Materials shall include by way
of  illustration  but  not of  limitation,  the  resin-absorbent  material,  the
impervious  sheet  material,  the  thermosetting  resin  and any  and all  other
materials which go into the lining of passageways or the like in accordance with
the Patent Rights  (except for  materials  used for lines which carry natural or
manufactured fuel gases or other hazardous gases).

         G. "Apparatus" shall mean and include but not be limited to any and all
tools,  equipment,  instruments,  machines,  and  devices,  whether  patented or
unpatented, for use in the practice of the Subject Matter.

         H.  "Royalty"  shall  mean  an  amount  payable  by  Operator  to  INAC
equivalent  to 8% of the  gross  contract  price  of  all  sales  and  contracts
performed by Operator utilizing the Subject Matter as further defined herein.

         Words of the neuter  gender  shall be deemed to be of the  masculine or
feminine gender where the context  requires.  Words of the singular number shall
be deemed to be plural where the context requires and vice versa.

         II. GRANT.  INAC hereby grants Operator an exclusive,  non-transferable
right and license within and throughout the Territory:

         A. To utilize the  Know-how,  to practice the  inventions of the Patent
Rights  relating  to the  Subject  Matter,  and to sell the  resultant  product,
however,  the  Subject  Matter may not be used to line  tunnels,  pipelines  and
passageways  carrying  natural or  manufactured  fuel  gases or other  hazardous
gases;

         B. To use any and all  Copyrights,  if there are any,  as an adjunct to
the practice of such methods and the commercialization thereof; and


         C. To use and display  "Insituform"  as a trademark in connection  with
each and every  aspect of the  exploitation  of the  Process  including  but not
limited to all materials,  apparatus and products sold hereunder  purchased from
INAC or a source  recommended and approved by INAC. All equipment,  letterheads,
invoices,  advertising  signs of all  types  and  printed  material  shall  bear
appropriate insignia acknowledging such products, material or equipment as under
exclusive license from INAC.

         D. The Operator hereby acknowledges that the name,  "INSITUFORM",  is a
valid service and/or trademark solely owned by INSITUFORM INTERNATIONAL N.V. and
exclusively  licensed to INAC, in the territory of the United  States,  and that
only INAC or its  designated  licensees  have the right within said territory to
use  such  trademark  and  such  trademarks,  service  marks,  trade  names  and
copyrights as may presently exist or be acquired by INAC and licensed for use by
Operator,  along with all  ancillary  signs,  symbols or other  indicia  used in
connection or conjunction with said marks.  Operator further  acknowledges  that
valuable  goodwill is attached to such trademarks,  service marks,  trade names,
and  copyrights,  and  that it will  use same in the  manner  and to the  extent
specifically  licensed by this agreement.  Operator  understands and agrees that
license to these Proprietary Marks is non-exclusive,  and that INAC, in its sole
discretion,  has the right itself to operate businesses under said marks, and to
grant other  licenses in, to and under such  Proprietary  Marks on any terms and
conditions INAC deems fit;  provided,  however that INAC may so operate or grant
other licenses  subject to the limitations of this agreement  within  Operator's
exclusive  territory,  but  solely for use of the  Insituform  Process in lining
tunnels,  pipelines, and other passageways used to carry natural or manufactured
fuel gases or other hazardous gases.

Operator expressly  covenants that during the term of this Agreement,  and after
the expiration or termination thereof, Operator shall not directly or indirectly
contest or aid in contesting the validity or ownership of said Proprietary Marks
and copyrights. Operator agrees promptly to notify INAC of any claim, demand, or
suit based upon or arising from, or of any attempt by any other person,  firm or
corporation,  to use the service and/or trademarks  licensed  hereunder,  or any
trademark,  service mark, symbol,  trade name,  copyright or colorable variation
thereof, in which INAC has a proprietary interest. Operator agrees also promptly
to notify INAC of any material  litigation  instituted  by  Operator,  or by any
person, firm,  corporation or governmental agency against Operator. In the event
INAC,  pursuant  to the  terms of this  agreement,  undertakes  the  defense  or
prosecution of any litigation,  Operator agrees to execute any and all documents
and do such acts and things  which may, in the  opinion of counsel for INAC,  be
necessary to carry out such defense or  prosecution,  either in the name of INAC
or in the name of Operator as INAC shall elect.  Operator  expressly  recognizes
that any and all goodwill associated with said Proprietary Marks and copyrights,
including any goodwill which might be deemed to have arisen  through  Operator's
activities,  inures directly and  exclusively to the benefit of INAC,  except as
otherwise provided herein.

         E. The Operator hereby  acknowledges  that the Subject Matter is a new,
specialized  and  highly  technological  process  and the  exploitation  thereof
throughout  the  United  States  will best be  served by the grant of  exclusive
licenses to carefully selected Operators for various defined  Territories in the
United States.

         F. It is  specifically  understood  and  agreed  that the grant of this
exclusive  license for the  Territory  is based upon the size and ability of the
Operator to exploit the demand for the Subject  Matter  within the Territory and
the nature  and scope of the  Territory  has been  determined  accordingly.  The
Operator  further  understands  and agrees that INAC  retains the right to grant
exclusive Licenses to other Operators in other defined Territories; and

         G. It is  anticipated  that  Operator  will fully  exploit  the Subject
Matter primarily in the Territory for the mutual benefit of Operator,  INAC, and
the customers and potential  customers of Operator,  in order to assure  maximum
market  penetration for the Subject  Matter,  and that Operator will assure that
the  customers  and  potential  customers  of  Operator  are  provided  adequate
information,  warranties, and services by Operator. In so exploiting the Subject
Matter,  it is  anticipated  that Operator will be required to make  significant
financial investments,  necessary for market development,  in capital equipment,
in marketing and promotion, and in providing information and services.

         In order to compensate licensees in other territories for the making of
such  investments  and to induce them to do so, should  Operator seek to exploit
the Subject  Matter  outside of its exclusive  Territory and in an area where an
exclusive  license has already  been  granted,  Operator  shall make a crossover
payment of twelve percent (12%) of the gross contract price of all installations
utilizing  the Subject  Matter in such areas in  addition to the normal  royalty
payable to INAC as set forth in Paragraph IX herein. In the event  installations
are performed in the  Territory of a licensee  whose  Sub-License  Agreement and
amendments  thereto  provide for an eight percent (8%) crossover  payment,  then
Operator shall be obligated only to make an eight percent (8%) crossover payment
on such installations.  All crossover payments shall be paid by Operator to INAC
who shall in turn pay such crossover  payment to the licensee in whose territory
the installation was performed. Should Operator fail to make a crossover payment
to INAC  within the time  applicable  for  payment of the normal  royalty,  such
failure shall be a material breach of the Sub-License Agreement.  In calculating
minimum royalties,  such installation shall be treated as if the licensee of the
territory  in  which  the  work  was  performed   had  in  fact   performed  the
installation,  and any royalty payable for such installation  shall apply to the
minimum royalty requirements of the licensee of the territory where the work was
performed.  INAC may,  from  time to time,  alter  the  amount of the  crossover
payment  in  order  to  reflect  more  accurately   necessary  costs  of  market
development.

         Operator  acknowledges  that INAC cannot  prevent other  licensees from
exploiting the Subject Matter in Operator's exclusive Territory.

         In  addition,  in order to assure top  product  quality and to meet all
products  liability  and  health  and  safety  requirements,  it  shall  be  the
responsibility  of  Operator,  should it  perform  work  outside  its  exclusive
Territory, to assure that satisfactory arrangements are made to provide full and
complete  after-sales  service and  warranty  protection  for the job  involved,
including  specifically,  but not limited  to, the  ability to rapidly  deploy a
repair crew to the site of any such job.

         H. INAC is granting  exclusive  licenses  for the  exploitation  of the
Insituform  process in certain  defined  Territories,  however,  it reserves the
right to vary or otherwise  modify the nature and scope of  subsequent  licenses
granted  to  subsequent   licensees  to  accommodate  specific  territories  and
population considerations and other factors.

         III.  ADEQUACY OF  CONSIDERATION.  It is  specifically  understood  and
agreed that the exclusive licenses defined in Paragraph II above relating to the
specific territory set forth on Schedule A, and the Royalty defined in Paragraph
IX shall be deemed adequate consideration for this Agreement.

         IV.  AVAILABILITY.  Since the Insituform  Process and the  installation
thereof is highly  technical,  its  success in large  part,  is  dependent  upon
quality materials made to exacting  specifications and INAC shall make available
information  enabling  Operator to acquire  Apparatus  and  Materials  as may be
required  for  Operator  to  properly  operate  hereunder.  Such  Apparatus  and
Materials which are not covered by any of the Patent Rights or Copyrights hereof
may be purchased from any source Operator desires.  However,  all such purchases
by Operator may be subject to INAC's approval of the quality and  specifications
thereof,  which  shall  not be  unreasonably  withheld.  INAC  may  in its  sole
discretion  improve,  vary or otherwise upgrade the  specifications  and quality
standards to which the Operator must abide.

         V. DISCLOSURE AND TRAINING.  Promptly upon execution of this Agreement,
Operator shall proceed to purchase the Apparatus and Materials required properly
to operate  hereunder,  and INAC thereupon  shall fully disclose to Operator all
Know-how,  Patent Rights and Copyrights, if any, required in the practice of the
methods of the Subject Matter, and shall train at least four (4) representatives
of the Operator in the practice of the methods  described above.  Further,  INAC
shall  provide a  continuing  education  program  to the end that all  lining of
sewers, tunnels,  pipelines and other passageways in accordance with the Subject
Matter shall be effectively and efficiently  performed and the resultant product
of uniformly high quality. The content, extent, and frequency of the educational
program  shall be solely at the  discretion  of INAC. At the request of Operator
and subject to availability,  INAC will provide a technician  experienced in the
operation  of the Subject  Matter to assist the  Operator  and to render  advice
subject to payment by the Operator of all direct  traveling  and hotel  expenses
and a per diem rate which shall be agreed upon between the parties.

         VI.  PRESERVATION  OF  SECRECY.  As INAC  considers  its  know-how  and
technique to be a key element in the successful  exploitation  of the Insituform
process,  it insists that the Operator exert every reasonable  effort to keep in
strict secrecy the improvements  therein, and modifications thereof disclosed to
Operator  by or on behalf of INAC and all plans,  drawings,  specifications  and
other data and documents  relating thereto and to the Subject Matter,  except as
may be  necessary,  and only to the extent  necessary,  to  exercise  its rights
hereunder;  and  shall not  reveal or  communicate,  or  permit,  or cause to be
revealed or communicated, the same to any person, firm or corporation, except as
above  noted,  nor shall  Operator  disclose  or divulge in whole or in part any
trade  secrets or private  processes of INAC or its  affiliated  companies;  and
shall make  diligent  effort to ensure  that its  officers,  employees,  agents,
sub-contractors,  and all others under its direction or control to whom the same
is  communicated  properly  pursuant  to the  purposes of this  Agreement  fully
observe and abide by such  obligations  of  secrecy.  Operator  will  execute an
Agreement in the form attached hereto as Schedule C dealing with  non-disclosure
of such information,  among other things,  contemporaneous with the execution of
this Sub-license Agreement and will cause its officers,  employees,  agents, and
other  persons to whom such data or  documents  are  disclosed  to execute  such
agreement.

         VII. STANDARDS AND INSPECTION.  Operator shall maintain a high standard
of quality in all products  made with the practice of the methods of the Subject
Matter  and  in  all  other   products  sold   hereunder   under  the  trademark
"Insituform". To ensure the maintenance of such standards, INAC may periodically
inspect Operator's practice of the methods of the Subject Matter. Operator shall
cooperate  fully with INAC in such  inspections and shall promptly put in effect
all suggested  improvements in its practices of the methods of the Patent Rights
made by INAC which are economically  practical and are reasonably  calculated to
result in an improved  product and service.  At all times  Operator  shall exert
diligent  effort to practice the methods and  techniques in accordance  with the
best available technical information and advice received from INAC.

         VIII.    IMPROVEMENTS AND MODIFICATIONS.

         A. If during the term of this  Agreement,  the Operator,  its officers,
agents or employees  develop any  improvements or  modifications  in the Subject
Matter,  all such information  must be disclosed  immediately in writing to INAC
and will become the property of INAC.  INAC is obliged to  disseminate  all such
information  and  material to all of its  licensees  for their  mutual  benefit.
Operator  will cause each of its  officers,  agents and  employees to execute an
Agreement in the form attached hereto as Schedule C requiring disclosure to INAC
and Operator of all such improvements and modifications among other things.

         B. Operator recognizes and agrees that from time to time hereafter INAC
may change or modify the system presently identified by the mark,  "INSITUFORM",
including  the  adoption  and use of new or modified  trade  names,  trademarks,
service  marks or  copyrighted  materials,  new  products,  new equipment or new
techniques,  and that Operator  will accept,  use and display for the purpose of
this  Agreement  any such  changes in system,  including  new or modified  trade
names,  trademarks,  service marks or copyrighted  materials,  new products, new
equipment or new techniques,  as if they were part of this Agreement at the time
of execution  hereof.  Operator will make such  expenditures  as such changes or
modifications  in  the  system  may  reasonably  require,  and  do so  within  a
reasonable time.

         IX.      ROYALTY.

         A. The Operator will pay quarterly to INAC a Royalty equal to 8% of the
gross contract price of all contracts,  including  sales of the Subject  Matter,
whether or not invoiced or paid,  for the  installation  of the Subject  Matter,
including preparatory and finishing work therefor,  carried out by the Operator,
or any agent,  employee,  subcontractor or independent  contractor  retained for
such purpose, in its or any other Territory, such gross contract price (adjusted
for all proper  change  orders and  contractually  required  adjustments)  being
calculated  after adding back trade  discounts and other  preferences,  provided
however that such price is calculated at the going commercial rate (i.e. current
market  price  derived from arms length  negotiation)  and in the event that the
Operator  carries  out  installations  in the  Territory  at less than the going
commercial  rate, then for the purposes of calculation of Royalty due in respect
of such work, it will be assumed that the Operator  performed such installations
at the going commercial rate.

         The gross  contract  price shall  include the cost of all raw materials
necessary to complete the installation of the Subject Matter.  If some or all of
the raw  materials  are acquired  separately  by the ultimate  customer the cost
thereof shall nevertheless be added to the price charged by the Operator for the
purpose of computing  Royalty under this  Agreement.  The gross  contract  price
shall also include the value of any actual,  preparatory  and/or  finishing work
performed by any  subcontractor or independent  contractor,  whether retained or
hired by Operator, its agents or employees,  the ultimate customer, or any other
party,  when such actual,  preparatory  and/or  finishing work is performed as a
part of and/or adjunct to the  installation  and use of the Subject Matter,  and
the value of any such work shall  nevertheless  be added to the price charged by
the Operator for the purpose of computing the Royalty under this Agreement.

         Within  30 days  after  the end of each  calendar  quarter  or  portion
thereof the Operator  shall submit to INAC a written  report in such form as may
be requested by INAC fully detailing all sales and work performed  utilizing the
Subject  Matter during such calendar  quarter,  whether or not invoiced or paid,
the  total of  amounts  invoiced,  the  contract  price  and  terms for the work
performed,  the stage of completion,  a computation of the Royalty due, and such
other  information  as INAC may  reasonably  request and shall be accompanied by
payment in full in favor of INAC for the Royalties due INAC.

         B.       Minimum Royalty Obligation

         The minimum  Royalty to be paid for the period ending December 31, 1986
is  $26,826.00.  For the  year  ending  December  31,  1987  and for  each  year
thereafter, this minimum Royalty is $26,826.00 and shall be subject to increases
or decreases in  proportion  to increases or decreases in the  Engineering  News
Record  Construction Cost Index as compiled by McGraw Hill Publications for each
12 month period or a comparable index should such index not be available.  Sales
or work outside the  Operator's  Territory  shall not be included in the minimum
royalty calculation.

         Should Operator fail to generate sufficient  Royalties as per Paragraph
IXA above to achieve such minimum payment,  it shall pay such additional amounts
so as to meet the minimum set forth herein.

         In meeting the minimum royalty  obligation  hereunder,  notwithstanding
the Agreement  Letter dated July 10, 1980 between  North America and  Insituform
East,  Inc.  (regarding  application  of excess  Royalty  from one  territory to
another)  only until June 30, 1988 may  Operator  apply any excess  Royalty over
minimum  from  previously  licensed  territories  towards  meeting  this minimum
Royalty obligation. Thereafter, only Royalty realized from work performed within
the Territory described on page 17 of this license agreement shall apply towards
meeting this minimum Royalty obligation.

         Any such  payment due from the Operator to INAC to meet the minimum set
forth  herein  shall  be made  within  45 days  after  the end of each  relevant
December 31. In the event of a termination of this License  Agreement,  Operator
shall pay a pro rata minimum  Royalty for the year of  termination  based on the
number of months in which the License Agreement was in effect during such year.

         C. Non-Payment.  Should Operator fail to pay the Royalties set forth in
this Paragraph IX herein,  or fail to pay for other invoiced goods and services,
or any other  amounts due INA or any of its  subsidiaries  for any reason,  when
due, INAC shall have the right pursuant to Paragraph XIV hereof, TERMINATION, to
terminate its agreement with the Operator.

         X.  RECORDS.  Operator  shall  keep true and  accurate  records  of all
operations of the Subject Matter.  Such records shall be adequate to permit INAC
to verify  the  accuracy  of the  Royalty  Paragraph  IX hereof  and to  perform
inspection  and audit of  information  called for in Paragraphs VII and IX. Such
records  shall be open at reasonable  times during  regular  business  hours for
inspection   and   copying   by  INAC  and  its  duly   authorized   agents  and
representatives.  INAC shall make such periodic  inspection of the records as it
may consider  necessary,  provided always that  International,  the owner of the
Patent Rights  sub-licensed  hereunder,  or INAC may from time to time require a
specific audit to be carried out on Operator's  operations hereunder and in such
event  such  audit  shall  be  undertaken  by  INAC  with  a  representative  of
International in attendance if International so elects.  Such audits shall be at
the  expense  of the party  requiring  the audit  unless the audit  discloses  a
material  violation  of this  Agreement in which event the party  requiring  the
audit shall be reimbursed the expenses of the audit by the party in violation.

         XI.      WARRANTY.

         By INAC. INAC represents and warrants that it is the exclusive licensee
of International  throughout the United States to the Patent Rights described on
Exhibit  A and  fully  entitled  to enter  into  this  Agreement.  INAC  further
represents and warrants that the Subject Matter can successfully line many types
of sewers,  tunnels,  pipelines  and other  passageways  when said  methods  are
properly performed and that it will instruct Operator in such performance. Every
reasonable  precaution  will be taken by INAC in  producing  all  Materials  and
Apparatus,  compiling all data, and offering  instructions in the methods of use
of the Materials and Apparatus  purchased  from INAC for operation  hereunder to
assure that they comply with INAC's  exacting  standards  and that the  ultimate
lining for sewers and other passageways maintains a high standard of quality. To
the best of INAC's  knowledge,  all  information  given will be correct  and the
Materials  and  Apparatus  are believed by INAC to be  adequately  suited to the
purposes  intended.  However,  it is  impossible to  anticipate  every  possible
variation in the manner of use or the  conditions  under which the Operator will
apply the Materials,  Apparatus,  Know-how,  data, and methods and INAC makes no
warranty as to the results  which the Operator  will attain,  and shall under no
circumstances  be  held  responsible  for  any  such  results  that  occur  as a
consequence of a departure from the instructions  provided or from negligence or
malfeasance  on the part of Operator  except as may be contained in the specific
written  warranty  provided by INAC with regard to any  materials  furnished  by
INAC. INAC makes no representation nor warranty as to the validity of any of the
Patent Rights hereof,  other than that it has no knowledge of any basis on which
any of the issued  patents is  invalid;  no  representation  nor  warranty  that
performance in accordance  with this Agreement will not infringe any existing or
subsequently  issued or pending  patent,  other than that it has no knowledge of
the  existence  of any such patent,  and no  representation  nor  warranty  that
"Insituform" is available for use as a tradename,  trademark, and/or certificate
mark in the United States other than it believes it to be.  Further,  INAC shall
not be  held  responsible  for  use  by the  Operator  of  any  such  Materials,
Apparatus,  Know-how, data or method in such a manner as to infringe any patent,
trademark or copyright  owned by another.  INAC agrees not to sell its Materials
or Apparatus  hereof below its cost in violation of any applicable  provision of
any antitrust or unfair trade practice  statute and to charge all  Sub-Licensees
of the Patent Rights Royalties according to the same scale or formula.

         Notwithstanding  the above INAC does hereby agree,  at its expense,  to
use its best efforts to defend the Patent Rights by such means as it in its sole
discretion  may  determine  appropriate,  including  but not limited to,  patent
infringement  suits.  INAC reserves,  however,  the exclusive right to determine
whether a patent infringement has occurred or whether litigation or other action
is appropriate or feasible.

         By  Operator.  Operator  agrees  to  indemnify,  defend  and hold  INAC
harmless from any and all claims for bodily  injury  including  death,  personal
injury and damage to property of Operator,  INAC and/or others, which arise from
the alleged  negligence or  malfeasance of Operator or from the existence or use
of Materials and/or Apparatus acquired from sources other than INAC or which are
produced by Operator.

         The Operator also agrees at its expense to procure a policy or policies
of  insurance  from an  insurance  company or  companies  satisfactory  to INAC,
providing  coverage for the  operations of the Operator,  including  product and
completed operations, with minimum limits of Two Million Dollars ($2,000,000.00)
per  occurrence and Two Million  Dollars  ($2,000,000.00)  annual  aggregate for
injury to persons and Two Million Dollars  ($2,000,000.00)  annual aggregate for
damage to property. The operator also agrees to have INAC named as an additional
named insured under the above described  policy or policies and to cause INAC to
be  furnished  with a  Certificate  of such  insurance  which  shall  contain  a
requirement  that INAC be notified thirty (30) days prior to any cancellation or
any reduction in coverage or limits. The insurance required above shall commence
prior to the time the  Operator  commences  operations  under  this  Sub-License
Agreement and shall  continue in force  throughout  the life of the  Sub-License
Agreement until it expires or is terminated.

         This  Agreement  does  not  constitute  Operator  as  an  agent,  legal
representative,  joint  venturer,  partner,  employee,  or  servant  of  INAC or
Insituform of North America,  Inc. (INA) for any purpose  whatsoever;  and it is
understood between the parties hereto that Operator is an independent contractor
and is in no way  authorized  to  make  any  contract,  agreement,  warranty  or
representation on behalf of INAC or INA, or to create any obligation, express or
implied,  on behalf of INAC.  Operator shall prominently display in its place of
business a  certificate  from INAC  stating  that said  business  is operated by
Operator  as a  Licensee  of  INAC,  and  not  as an  agent  thereof.  Under  no
circumstances  shall  INAC or INA be liable for any act,  omission,  debt or any
other  obligation of Operator.  Operator  shall  indemnify and save INAC and INA
harmless  against any such claim and the cost of  defending  against such claims
arising  directly or indirectly  from, or as a result of, or in connection with,
Operator's operation of the licensed business.

         Operator shall promptly pay when due all taxes and assessments  against
the premises or the equipment used in connection with Operator's  business,  and
all liens or encumbrances  of every kind or character  created or placed upon or
against any of said property,  and all accounts and other  indebtedness of every
kind incurred by Operator in the conduct of said  business.  Operator shall have
the right to contest the  validity  or amount of any  assessment,  tax,  lien or
encumbrance,  provided that Operator shall (1) give INAC notice of its intention
to  contest  (2)  diligently  prosecute  such  contest,  and  (3) at  all  times
effectively  stay or prevent any official or judicial  sale of such  property or
any part thereof by reason of the non-payment of any lien, encumbrance,  tax, or
assessment.  Operator shall comply with all federal,  state,  and local laws and
regulations,  and shall  timely  obtain any and all  permits,  certificates,  or
licenses necessary for the full and proper conduct of its business.

         XII. DILIGENCE.  Operator  understands that the Subject Matter has been
designed to meet the growing  needs of its  customers  and  potential  customers
within  his  exclusive  Territory  and that its  license  has been  specifically
granted on the understanding that it will use all reasonable endeavors to create
a demand within the Territory for the Insituform  products,  and shall fill such
demand all as good  businesslike  conduct  requires.  The operator  specifically
agrees to  immediately  establish  a  business  location  within  its  exclusive
territory  including an office for the conduct of its Insituform  business,  and
facilities for the  maintenance  and storage of its equipment and materials.  To
assure Operator's financial ability to meet its obligations hereunder,  Operator
covenants  that at all times it shall  retain a net worth of at least  $500,000,
and shall provide annual  financial  statements to INAC,  each with an officer's
certificate  stating that the statements  have been prepared in accordance  with
generally accepted  accounting  principles  applied  consistently with the prior
year, and present  fairly the financial  position of the company and the results
of operations and changes in financial  position for the year then ended.  It is
specifically  understood  and  agreed  that  nothing  herein  provided  shall be
construed as requiring  Operator to operate in  accordance  with any  designated
marketing plan or system which,  except for the maintenance of high standards of
quality,  the exercise of diligence and the  performance in accordance  with the
terms and conditions hereof, are left to the determination of Operator.

         XIII. TERM. The Term of this Agreement shall commence on the date first
above  written  and  shall  continue  for the life of the last to  expire of the
patents (see Schedule A) or the Patent  Rights  including  any  improvements  or
modifications  thereto  including  patents  subsequently  granted extending such
life, unless sooner terminated as hereinafter provided.

         XIV.     TERMINATION

         A. By Operator.  The Operator may terminate  this Agreement at any time
by service of written notice to such effect on INAC two (2) calendar quarters in
advance of the effective date thereof and by complying with the applicable terms
and conditions of this Paragraph XIV.  During such period after notice but prior
to actual  termination,  Operator  shall not bid or accept any  additional  jobs
without the written consent of INAC.

         B. By INAC. In the event  Operator (i) becomes  insolvent or a petition
in  bankruptcy  is filed by or against  Operator and not removed  within 90 days
thereafter,  or a receiver  is  appointed  for  Operator;  (ii) fails to pay the
minimum  Royalties in  accordance  with  Paragraph IX hereof or other  Royalties
hereunder,  or fails to provide  computations of Royalties,  within fifteen (15)
days of when due and such  failure  shall  continue for a period of fifteen (15)
days after written notice from INAC to the Operator; (iii) fails to pay when due
for other  invoiced  goods and services,  or any other amounts due INA or any of
its  subsidiaries for any reason and such failure shall continue for a period of
fifteen (15) days after written notice from INAC to the Operator;  (iv) fails to
perform any other  material  term or  condition of this  Agreement  and fails to
correct the same within  fifteen (15) days after written notice from INAC to the
Operator,  or if not reasonably capable of correction within such period,  fails
to  commence  such  correction  within  such  period and  thereafter  diligently
proceeds to make such correction; or (v) in the event Operator's net worth falls
below  $500,000;  then in any  such  event,  INAC  may  declare  this  Agreement
terminated  immediately  upon written notice to the Operator.  Such  termination
shall not limit or affect any other right or remedy of INAC, including the right
to damages resulting from the Operator's breach.

         C.  Consequences.  Upon  termination of this Agreement by either of the
parties hereto,  Operator shall immediately pay INAC all Royalties then due from
it, terminate all use by it of the word "Insituform" as a tradename,  trademark,
certification   mark  or  corporate  name,  avoid  all  subsequent  use  of  all
tradenames,  trademarks,  certification  marks or  corporate  names likely to be
confused with "Insituform" as well as all stationery,  invoices,  signs or other
visual devices displaying or otherwise  associated with "Insituform",  terminate
all use of the methods, as well as the manufacture, use and sale of the products
of the  Patent  Rights,  Copyrights,  and  Know-how;  and assign to INAC free of
charge  all  claims  to  and  any  and  all  rights  arising  from  the  use  of
"Insituform",  or combination involving "Insituform",  in the specific Territory
and return to INAC all confidential matter in its possession such as instruction
manuals  and  written  know-how  and any  copies  which it has made of the same.
Following  termination  Operator  shall  continue to be obligated to provide all
after sales  services for which it has  theretofore  contracted,  including  the
honoring of all warranties.  Should  Operator fail to fulfill such  obligations,
and should  INAC,  in its sole  discretion,  whether  for  reason of  preserving
product  goodwill or  otherwise,  choose to perform any such  obligations  (this
paragraph in no way to be construed as an assumption by INAC of any  obligations
for which it is not specifically contractually responsible), then Operator shall
promptly  reimburse  INAC  the  reasonable  cost  to  INAC  of  performing  such
obligations  of  Operator.   If  Operator  is  a  corporation  having  the  word
"Insituform" as a part of its corporate name,  Operator shall, within sixty (60)
days of  termination  amend its corporate  name to remove the word  "Insituform"
therefrom.

         Operator  shall  promptly pay to INAC all damages,  costs and expenses,
including  reasonable  attorney's fees, incurred by INAC by reason of default on
the part of Operator, whether or not such occurred prior to or subsequent to the
termination or expiration of the Agreement, and said sum shall include all costs
and  expenses,  including  reasonable  attorney's  fees,  incurred  by  INAC  in
obtaining injunctive or other relief to enforce the provisions of this contract.
No right or remedy herein conferred upon or reserved to INAC is exclusive of any
other right or remedy herein or by law or equity provided or permitted; but each
shall be  cumulative  of every right or remedy given  hereunder.  In addition to
whatever remedy or remedies INAC may have by way of damages for violation of the
provisions of this Agreement  and/or  termination  of the same,  INAC shall also
have the right to injunctive relief to enforce the provisions of this Agreement.
Operator  herein  agrees  to abide by all of the  terms  and  conditions  of the
Non-Disclosure Agreement despite the termination of this License Agreement.

         XV.  Notices.  Any notice  required or  permitted to be given or served
upon either party hereto pursuant to this Agreement shall be sufficiently  given
or served if sent to such party by certified mail,  postage prepaid addressed to
such party as set forth below or by telex,  or to such other address as it shall
designate by written notice to the other party, as follows:

In case of notice to INAC:

3315 Democrat Road
P.O. Box 181071
Memphis, TN 38118

In case of Notice to Operator:

Insituform East, Inc.
3421 Pennsy Drive
Landover, Maryland 20785

         XVI.  SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns with the specific  understanding that no Operator,  without INAC's prior
written  consent,  shall,  by  operation  of law  or  otherwise,  sell,  assign,
transfer, convey, give away, or encumber to any person, firm or corporation, its
interest in this Agreement or its interest in the license  granted hereby or its
interest  in any  proprietorship  which owns any  interest in the  license,  nor
offer,  permit,  or suffer the same.  Any such  assignment  shall be made on the
express condition that the assignor  guarantees the performance of its assignees
strictly in accordance with the terms and provisions  hereof.  In the event that
Operator  is a  corporation,  Operator  agrees  that  this  license  may  not be
transferred  by sale,  conveyance,  operation of law or  otherwise,  without the
express written permission of INAC. Should beneficial  ownership of an amount of
the  outstanding  common  stock or other  indicia of  ownership  in  Operator be
conveyed so as to effect a change in the control of  Operator,  whether by sale,
conveyance,  operation of law or otherwise,  without  having first  obtained the
written  consent of INAC to transfer the license,  INAC shall at its option have
the  right to  immediately  terminate  this  license  agreement.  Any  purported
assignment of this agreement not having the aforesaid  consent shall be null and
void and shall constitute a material default hereunder.

         XVII.    (This paragraph deliberately omitted.)

         XVIII.  EXCLUSIVE LICENSE. INAC has herein granted an exclusive license
to the Operator  together with its Know-how,  technical  experience and training
program for the exploitation of the Insituform process within and throughout the
defined  Territory.  If, despite INAC's best efforts to maintain the exclusivity
of its licenses and defend its Patent, Trademark and Copyright protections, such
exclusivity  and/or  protections should be terminated for any reason whatsoever,
the Operator hereunder is nevertheless obligated to comply in full with each and
every term and condition of this agreement,  including,  but not limited to, the
payment of Royalties to INAC and the  maintenance  of high  standards of quality
and service.

         XIX. EXCLUSIONS. In the event that any one or more of the provisions of
this  Agreement is, or are, held to be invalid it is agreed  between the parties
that if legally practical said provision or provisions shall be considered never
to have been  contained  herein and the Agreement  shall  otherwise  continue in
force and effect.

         XX. ENTIRE AGREEMENT.  This Agreement  constitutes the entire agreement
between  the  parties  hereto  with  respect to the  Subject  Matter  hereof and
supersedes all prior oral and written  understandings and agreements between the
parties hereto  concerning the Subject  Matter.  The paragraph  headings of this
Agreement  are  for  convenience  only  and  have  no  other  significance.  The
provisions of this Agreement shall not be waived, modified or amended, except by
a subsequent writing signed by both parties.

         XXI.  APPLICABLE LAW. This  Sub-License  Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee.

         The  foregoing  notwithstanding,  to the extent that the  provisions of
this  Agreement  provide  for  periods  of notice  less than those  required  by
applicable law, or provide for termination, cancellation, nonrenewal or the like
other than in accordance  with  applicable  law, such  provisions  shall, to the
extent such are not in accordance with applicable law, not be effective and INAC
shall comply with applicable law in connection with each of these matters.

         XXII. BENEFIT.  This Agreement shall issue only to the benefit of INAC,
Insituform  International,  N.V.,  Operator,  and their approved  successors and
assigns.

         XXIII.   PAYMENTS.  All payments shall be made in Memphis, Tennessee.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.


INSITUFORM NORTH AMERICA CORP.      OPERATOR
                                    INSITUFORM EAST, INC.

By /s/ Jack Massar                  By /s/ Arthur G. Lang III
Jack Massar, Vice President         A.G. Lang, III
                                    President

Date 3/31/86                        Date March 28 1986



<PAGE>

                                   SCHEDULE A

                                    TERRITORY

                          The State of West Virginia.



<PAGE>


                                   SCHEDULE B

                              UNITED STATES PATENT

                                   #4,064,211
                                   #4,366,012
                                   #4,385,885
                                   #4,390,574
                                   #4,401,696
                                   #4,439,469





<PAGE>


                                   SCHEDULE C

                    NONDISCLOSURE AGREEMENT AND AGREEMENT ON
            IMPROVEMENTS, MODIFICATIONS AND TECHNOLOGICAL DEVELOPMENT

                              INSITUFORM EAST, INC.
                              (Name of Sublicensee)

being a party to a certain Sublicensing Agreement,  dated March 28, 1986, by and
between itself and INAC (hereinafter "Insituform"), pursuant to the terms of the
aforesaid Agreement,

                                      -OR-

                          Arthur G. Lang, III, Pres/CEO
                   (Name of employee, agent or representative)

as an employee, agent or representative of the above-named sublicensee,  and for
good and  valuable  consideration,  receipt  of which  is  hereby  acknowledged,
sublicensee or its employee, agrees as follows:

         1. Operator or his employee,  agent, or representative shall not during
the term of this  Agreement or after its  termination  communicate or divulge to
any other  person,  persons,  partnership  or  corporation  except for marketing
purposes,  any  information or knowledge  concerning the method of  manufacture,
preparation,  promotion,  sale or  distribution  used in the INAC business,  nor
shall Operator or his agent,  representative  or employee disclose or divulge in
whole  or in  part  any  trade  secrets  or  private  processes  of  INAC or its
affiliated  companies,  or any Subject  Matter  defined in the  above-referenced
Sublicensing  Agreement to include all methods,  apparatus and materials used in
the  preparation  and  installation  (including  cutting  out of laterals of the
lining of sewers,  tunnels,  pipelines,  and other passageways)  excepting those
used to carry  aromatic  hydrocarbons  in a  gaseous  state by  impregnating  an
absorbent  layer with a synthetic  resin,  and retaining  such layer in place in
such passageway while the layer cures or is cured.

         2. Operator or his agent, representative or employee shall at all times
treat as  confidential,  and shall not at  anytime  disclose,  copy,  duplicate,
record, or otherwise reproduce, in whole or in part, or otherwise make available
to any  unauthorized  person or  source,  the  contents  of any  manual or other
technical information or writing provided by Insituform.

         3. If during the term of this Agreement,  the Operator or his employee,
agent or  representative,  develop  any  improvements  or  modifications  in the
Subject  Matter,   all  such  information  must  be  disclosed   immediately  to
Insituform, and will become the property of Insituform.

         4. Should Operator or his employee,  agent or  representative,  design,
develop, devise or invent any process,  device,  equipment or technology for use
in conjunction  with the Subject  Matter,  or as a  development,  improvement or
modification of Subject Matter, which process,  device,  equipment or technology
is, or may be, patentable or subject to copyright law, then aforesaid  Operator,
or his employee,  agent or representative,  shall sell to INAC all of his right,
title or interest in said process,  device,  equipment or technology,  including
patent rights or copyrights, if any, for the sum of ONE DOLLAR.

         IN WITNESS WHEREOF,  Operator or its employee, agent or representative,
does hereby set his hand.

                           INSITUFORM EAST, INC.
                           (Name of Sublicensee)

                           By /s/ Arthur G. Lang, III
                           A.G. Lang, III, President
                           -----------------------------------------------------
                           (Employee, Agent or Representative of Operator)

WITNESS

/s/ Marjorie Perdue White
Witness



<PAGE>
                                   SCHEDULE D

                             DEDUCTIONS FROM ROYALTY

In relation to Clause IX, headed "Royalty" of the Insituform Sub-License granted
by us to your  company,  and dated March 28, 1986,  we confirm that in computing
the gross price of all contracts  involving the  installation  of the Insituform
Process, you may deduct the following:

          (a) Fees billed for preparatory T.V. survey work but not including the
     immediate  T.V.  survey which is  recommended  as part of the  installation
     process.

          (b) Fees billed for  overpumping  provided that these shall not exceed
     $2,000 per line unless agreed to in advance.

          (c) Fees billed for  incidentals,  including  cleaning,  not  directly
     relating  to  the  installation  but  performed  in  conjunction  therewith
     provided these do not exceed 3.5% of the total contract price.