W PA
                                                                    Exhibit 10.3

                              SUB-LICENSE AGREEMENT

         AGREEMENT  made and entered into as of the 15th day of March,  1982, by
and between  INSITUFORM  OF NORTH  AMERICA,  INC., a  corporation  organized and
existing  under the laws of the State of  Delaware,  hereinafter  referred to as
"North  America" and Insituform  East,  Inc., a corporation,  having a principal
place of business at 8401 Corporate Drive, Landover, Maryland 20785, hereinafter
referred to as "Operator";

                                   WITNESSETH:

         WHEREAS,  North  America 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,   North  America  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 except California,  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 North America 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 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,  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 North America or which North America subsequently acquires the right
to  communicate  to its  licensees  within the United  States of America  except
California,  except  any  information,  ideas or  techniques  which  are  common
knowledge to the industry or which are readily available from sources other than
North America.

         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 North  America  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 North  America  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 such fuels as may be required for energy purposes.

         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 North America
equivalent  to 8% of the gross  contract  price of all  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.   North  America  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 aromatic hydrocarbons in the gaseous state;

         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
North  America  or a source  recommended  and  approved  by North  America.  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 Insituform of North America, Inc.

         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 North  America,  in the  territory of the United States
excluding the State of California, and that only North America 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 North  America 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 North America, 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  North
America deems fit; provided,  however that North America 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 aromatic hydrocarbons in
a gaseous  state.  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 North
America 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 North America has a
proprietary  interest.  Operator agrees also to promptly notify North America of
any  material  litigation  instituted  by  Operator,  or by  any  person,  firm,
corporation or governmental agency against Operator. In the event North America,
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 North  America,  be
necessary to carry out such defense or prosecution,  either in the name of North
America  or in the name of  Operator  as North  America  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 North America, 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 North America retains the right to
grant exclusive Licenses to other Operators in other defined Territories; and

         G.  It is  anticipated  that  each  Operator  under  this  and  similar
agreements will fully exploit the Subject Matter in the Territory for the mutual
benefit of Operator, North America, and the customers and potential customers of
such Operator in order to assure market  penetration for the Subject Matter, and
that such Operator  will assure that the  customers  and potential  customers of
such Operator are provided  adequate  information,  warranties,  and services by
such Operator.  In so exploiting the Subject Matter, it is anticipated that such
Operator will be required to make significant  financial  investments in capital
equipment, in marketing and promotion and in providing information and services.
In order to compensate the Operator in other  territories for the making of such
investment  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 pay the exclusive
licensee of such  Territory a royalty of 8% of the gross  contract  price of all
installations  utilizing  the Subject  Matter in addition to the normal  royalty
payable  to  North  America  as set  forth  in  Paragraph  IX  herein.  Operator
acknowledges  that North America cannot prevent other  licensees from exploiting
the  Subject  Matter  in  Operator's   exclusive  Territory  and  North  America
acknowledges  that it cannot prevent Operator from exploiting the subject matter
in  other  operators'  exclusive  territories  subject  to the  payment  to such
operators of the additional 8% royalty.

         In addition,  in order to assure  adequate  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. North America 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.

         I. In connection with his exploitation of the exclusive license granted
herein,  Operator understands the importance of its after sales responsibilities
and agrees to provide  prompt and efficient  service to all those whether within
or outside of his Territory,  for whom it has performed any functions  utilizing
the practice of the Subject Matter.

         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 North America shall make
available for purchase by Operator,  Apparatus and Materials designed by and for
North  America as 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 will be subject to North America's prior approval
of the  quality and  specifications  thereof,  which  shall not be  unreasonably
withheld.  North America 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 North  America  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,  North America 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  North  America.  At the  request  of  Operator  and  subject  to
availability,  North  America  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 North America  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 North America 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 North America 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,  North America may
periodically  inspect Operator's  practice of the methods of the Subject Matter.
Operator shall cooperate fully with North America in such  inspections and shall
promptly  put in effect  all  suggested  improvements  in its  practices  of the
methods  of the  Patent  Rights  made by North  America  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 North America.

         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 North
America and will become the property of North America.  North America 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 North America and Operator of all such improvements and
modifications among other things.

         B.  Operator  recognizes  and agrees  that from time to time  hereafter
North America 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 North America a Royalty equal to
8% of the gross  contract  price of all  contracts,  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 and deducting  packaging and shipping
charges and any applicable taxes, 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  45 days  after  the end of each  calendar  quarter  or  portion
thereof the Operator shall submit to North America a written report in such form
as may be  reasonably  requested by North America  detailing all 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 North  America may  reasonably  request and
shall be  accompanied  by  payment  in full in favor  of North  America  for the
Royalties due North America.

         Operator shall keep accurate records of all of its operations involving
the Subject  Matter and of all  contracts  entered  into  involving  the Subject
Matter.  North America or its designated agent shall have a right to inspect any
and all such  records and  contracts  at all  reasonable  times at its  expense,
provided that North America shall not disclose any  confidential  information so
obtained  to persons  other than  employees  or agents of North  America  except
pursuant to subpoena of a court of proper jurisdiction.

         B.       Minimum Royalty Obligation

         During the year  commencing  twelve (12)  months from the date  hereof,
Operator  undertakes and agrees to pay North America a total royalty of not less
than  $51,500.  Should  Operator  fail to generate  sufficient  royalties as per
Paragraph IX A above to achieve such minimum  payment,  it shall contribute such
additional  amounts so as to meet the minimum set forth  herein.  In meeting the
minimum  royalty  obligation  hereunder,   only  Royalties  realized  from  work
performed within the Operator's  Territory will be included in such calculation.
The Operator is further  obligated,  beginning  twenty-four (24) months from the
date hereof and continuing for each and every  subsequent and successive  twelve
(12) month period during the term of this agreement,  to pay to North America, a
total  Royalty  of not less  than  $51,500  subject  however,  to  increases  or
decreases of such amount  determined  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.  Any such  contribution due from the Operator to North America
to meet the minimum set forth  herein shall be made within 45 days after the end
of each relevant 12 month period.  In the event of a termination of this License
Agreement  during the second or subsequent  years thereof,  Operator shall pay a
pro rate  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 in a timely  manner,  North America  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 North
America to verify the accuracy of the Royalty Paragraph IX hereof and to perform
inspection called for in Paragraph VII. Such records shall be open at reasonable
times during regular  business hours for inspection and copying by North America
and its duly  authorized  agents and  representatives.  North America 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,  and/or North America 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  North   America  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
violation of this  Agreement  exceeding in monetary terms 1% of sums reported by
Operator in which event the party  requiring the audit shall be  reimbursed  the
expenses of the audit by the party in violation.

         XI.      WARRANTY.

         By North America.  North America represents and warrants that it is the
exclusive  licensee of International  throughout the United States excluding the
state of  California  to the  Patent  Rights  described  on  Exhibit A and fully
entitled to enter into this  Agreement.  North America  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 North America in producing all Materials
and Apparatus,  compiling all data, and offering  instructions in the methods of
use of the Materials and  Apparatus  purchased  from North America for operation
hereunder to assure that they comply with North America's exacting standards and
that the  ultimate  lining  for sewers and other  passageways  maintains  a high
standard of quality. To the best of North America's  knowledge,  all information
given will be correct and the  Materials  and  Apparatus  are  believed by North
America  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 North  America  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
North America with regard to any  materials  furnished by North  America.  North
America  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,  North
America  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. North America 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  North  America  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. North America 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  North
America  harmless  from any and all claims for bodily  injury  including  death,
personal injury and damage to property of Operator, North America 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
North America 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 North
America,  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 North America
named as an  additional  named  insured  under  the  above  described  policy or
policies and to cause North America to be furnished  with a Certificate  of such
insurance  which  shall  contain a  requirement  that North  America 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 North America
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 North America, or
to create  any  obligation,  express  or  implied,  on behalf of North  America.
Operator shall  prominently  display in its place of business a certificate from
North  America  stating that said business is operated by Operator as a Licensee
of North America,  and not as an agent  thereof.  Under no  circumstances  shall
North America be liable for any act,  omission,  debt or any other obligation of
Operator.  Operator shall indemnify and save North America  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 North America 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 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 within eighteen months of
the date hereof. 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. 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 or the Patent Rights including any improvements or modifications thereto
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 North  America 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 North America.

         B. By North America.  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 North  America to the  Operator;  (iii) 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 North
America 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 (iv) in the event Operator's net
worth falls below  $500,000;  then in any such event,  North America 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 North
America, 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 North America 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 North America 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 North America 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  North  America,  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 North America of
any obligations  for which it is not  specifically  contractually  responsible),
then Operator shall  promptly  reimburse  North America the  reasonable  cost to
North  America 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 North  America all damages,  costs and
expenses,  including  reasonable  attorney's fees,  incurred by North America 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 North America in obtaining injunctive or other relief to enforce the
provisions  of this  contract.  No  right or  remedy  herein  conferred  upon or
reserved to North America 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  North
America  may have by way of damages  for  violation  of the  provisions  of this
Agreement  and/or  termination  of the same,  North  America 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 North America:

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

In case of Notice to Operator:


         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 or partner (if Operator
is a  partnership),  without North America'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 North
America.  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 North America
to transfer the  license,  North  America  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.  North America shall not unreasonably
withhold its consent to any such transfer of this agreement when requested. Such
consent shall not be deemed to be unreasonably  withheld if the transferee would
not have qualified for a license under the guidelines of North America if it had
applied for such license in the first instance.

         XVII.  DEATH OF  OPERATOR.  In the event of the death of an  individual
Operator,  or any  partner of an  Operator  which is a  partnership,  the heirs,
beneficiaries,  devisees or legal representatives of said individual or partner,
together with all  surviving  partners,  shall,  within ninety (90) days of such
event:

         A. Apply to North  America for the right to  continue to operate  under
the license (for the duration of the term of this Agreement),  which right shall
be granted if North  America,  in its sole judgment  considers  such  continuing
right to be practicable; or

         B. Sell, assign,  transfer, or convey Operator's interest in compliance
with the provisions of paragraph XVI of this Agreement;  provided,  however,  in
the event a proper and timely  application  for the right to continue to operate
has been made and rejected,  the ninety (90) days to sell, assign,  transfer, or
convey shall be computed from the date of said rejection.

         Except as herein  provided,  if said  representatives  fail to take the
steps  hereinabove  noted,  this  Agreement  and  license  shall   automatically
terminate ninety (90) days after the death of such operator or partner.

         XVIII. EXCLUSIVE LICENSE. North America 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 North  America'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 North America 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
North America shall comply with  applicable law in connection with each of these
matters.

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

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


INSITUFORM OF NORTH AMERICA, INC.           OPERATOR


By /s/ Matthew P. McPheely                  By /s/ Arthur G. Lang III
--------------------------                  -------------------------
President                                   President




<PAGE>

                                   SCHEDULE A
                                    TERRITORY

                   The  following  counties in the State of  Pennsylvania:
                   Greene,  Fayette,  Washington,   Westmoreland,  Beaver,
                   Allegheny,   Lawrence,   Butler,  Armstrong,   Indiana,
                   Mercer,  Benango,   Clarion,  Forest,  Elk,  Jefferson,
                   Cameron,  Erie, Crawford,  Warren,  McKean,  Potter and
                   Clearfield.



<PAGE>


                                   SCHEDULE B
                              UNITED STATES PATENT
                                   #4,064,211



<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 15, 1982, by and
between itself and Insituform of North America, Inc. (hereinafter "Insituform"),
pursuant to the terms of the aforesaid Agreement,

                                      -OR-


--------------------------------------------------------------------------------
                   (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 North America 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 North America 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 North America 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
                           -----------------------------------------------------

                           President
                           -----------------------------------------------------
                           (Employee, Agent or Representative of Operator)
WITNESS

/s/ Beverly S. McQuay
Beverly S. McQuay
Witness
<PAGE>
                                 March 15, 1982


Insituform East, Inc.
8401 Corporate Drive
Landover, Maryland 20785

Gentlemen:

         In  relation  to  Clause  IX,  headed   "Royalty"  of  the   Insituform
Sub-License granted by us to your company,  and dated March 15, 1982, 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 Insituform
          Process.

     (b)  Fees  billed  for  over-pumping   providing  these  shall  not  exceed
          $2,000.00 per line.

     (c)  Fees billed for incidentals, including cleaning, in direct relation to
          the installation but performed in conjunction therewith providing they
          do not exceed 3.5% of the total contract price.

     (d)  Associated  construction and overpumping which may be excessively high
          in relation to that normally  encountered in Insituform  contracts may
          be submitted to us for  discussion of its  exclusion  from the royalty
          computation  on a case by case basis prior to the  submission  of your
          contract quotation.

                                INSITUFORM OF NORTH AMERICA, INC.

                                By: /s/ Matthew P. McPheely
                                ------------------------------------------------
                                Matthew P. McPheely, President
                                And Chief Executive Officer


Agreed & Accepted:

INSITUFORM EAST, INC.

By: /s/ Arthur G. Lang, III
---------------------------------------------------------
Arthur G. Lang, President


<PAGE>


                                 March 15, 1982


Insituform East, Inc.
8401 Corporate Drive
Landover, Maryland 20785

Gentlemen:

         In  relation  to clause  XVI headed  "Successors  and  Assigns"  of the
Insituform  sub-license  granted by us to your company and dated March 15, 1982,
we confirm  that the  language  contained in such clause shall be deleted in its
entirety and replaced by the following.

         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 the operator shall not assign this agreement without written
permission  of North  America  except to a wholly  owned  subsidiary  and on the
express  condition that the assignor  guarantee the  performance of its assignee
hereto  strictly  in  accordance  with the  terms  and  provisions  hereof.  The
permission of North America shall not be unreasonably withheld.

         Shareholders of the corporate operator shall not be restricted in their
right to sell part or all of their common  stock and the operator  shall be free
to make additional public offerings of its securities  without the prior consent
of  North  America,  provided,  however,  that  there  shall be no  transfer  of
beneficial  control of the operator by Arthur Lang,  William Ledford and Stanley
Ledford,  whether by corporate  merger or acquisition or by other changes in the
ownership of stock,  without the prior consent of North  America,  which consent
shall not be unreasonably withheld.

         For purposes of this  paragraph,  consent  shall be considered as being
"unreasonably  withheld" if the proposed  assignee or transferee is  financially
and  technically  equivalent  to the  operator,  and would have  qualified for a
license under the guidelines of North America if it had applied for such license
in the first instance.

                                         INSITUFORM OF NORTH AMERICA, INC.

                                         By: /s/ Matthew P. McPheely
                                         ---------------------------------------
                                         Matthew P. McPheely, President
                                         And Chief Executive Officer

Agreed & Accepted:

INSITUFORM EAST, INC.

By: /s/ Arthur G. Lang, III
---------------------------------------------------------
Arthur G. Lang, President