EXHIBIT 10.3

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the  information  subject to the  confidentiality  request.
Omissions  are  designated  as **. A complete  version of this  exhibit has been
filed separately with the Securities and Exchange Commission.


                        EXCLUSIVE DISTRIBUTION AGREEMENT


         This Exclusive Distribution  Agreement (the "AGREEMENT"),  effective as
of  September  1, 2002 (the  "EFFECTIVE  DATE"),  is entered into by and between
Water$avr Global Solutions Inc.. (hereinafter "WATER$AVR GLOBAL SOLUTIONS INC.),
an Illinois corporation,  a wholly owned subsidiary of Flexible Solutions Inc. a
Nevada  corporation  ("Flexible  Solutions"),  having  its  principal  place  of
business at P.O. 262, Charleston IL 61920 and Ondeo Nalco Company,  (hereinafter
"ONDEO NALCO") a Delaware corporation, having a place of business at Ondeo Nalco
Center,  Naperville, IL 60563. Water$aver Global Solutions, Inc. and Ondeo Nalco
are  sometimes  each  referred  to  herein  as a  "Party"  and  together  as the
"Parties".

                                    RECITALS

A. Water$avr Global Solutions Inc. has developed and sells chemical products for
the reduction of water evaporation from water reservoirs;

B. Ondeo Nalco  markets  and sells water  treatment  and related  chemicals  and
services; and

C. Water$avr Global Solutions Inc. wishes to appoint Ondeo Nalco as an exclusive
distributor  of its  chemicals  in certain  markets and  non-exclusive  in other
markets and Ondeo Nalco wishes to accept such appointment.

                                    AGREEMENT

         In consideration of the mutual promises  contained herein,  the Parties
         agree as follows:

1.       DEFINITIONS. All definitions used herein shall apply to both the single
         and plural forms, as context may require. The following terms when used
         herein shall have the following meanings:

         1.1 "AFFILIATES" shall mean any parent or majority-owned  subsidiaries,
whether direct or indirect,  of Ondeo Nalco or Water$avr  Global Solutions Inc.,
as applicable.

         1.2  "CHEMICALS"  shall  mean those  Water$avr  Global  Solutions  Inc.
chemical products and improvements thereto listed in EXHIBIT A.










<PAGE>
         1.3 "CONFIDENTIAL  INFORMATION"  shall mean  information,  material and
trade secrets  proprietary  to Water$avr  Global  Solutions  Inc. or Ondeo Nalco
(each, in such capacity, the "Disclosing Party") or to any related or affiliated
entity of such party or designated as confidential by such party, whether or not
owned or developed by such party,  which the "Receiving Party" (defined as Ondeo
Nalco, if Water$avr Global Solutions Inc. is the Disclosing  Party, or Water$avr
Global Solutions Inc., if Ondeo Nalco is the Disclosing  Party) or any Affiliate
of the  Disclosing  Party may obtain  knowledge of or access to, through or as a
result of its  relationship  with the  Disclosing  Party or with any  related or
affiliated  entity  thereof,  or through  physical access to any property of the
Disclosing Party. Without limiting the generality of the foregoing, Confidential
Information  shall  include,  but is not  limited  to,  the  following  types of
information and other information of a similar nature (whether or not reduced to
writing  or  still  in  development):   customer  lists,   business  strategies,
discoveries,  ideas,  inventions,   concepts,  software  in  various  states  of
development,  designs, drawings,  specifications,  outlines, techniques, models,
source  code,  object code,  documentation,  diagrams,  flow  charts,  research,
economic and financial analyses, developments,  processes, procedures, know how,
marketing  techniques and materials,  marketing and development plans,  customer
names and other information related to customers, price lists, pricing policies,
financial  information and employee files.  Confidential  Information shall also
include any information  described above which the Disclosing Party obtains from
another party and which the Disclosing Party treats as proprietary or designates
as Confidential Information, whether or not owned or developed by the Disclosing
Party.

         1.5  "DOCUMENTATION"  shall  mean any  marketing  materials,  reference
materials,  regulatory materials or other information  describing or relating to
the Chemicals.

         1.6  "END-CUSTOMER"  shall mean a third party to whom Ondeo Nalco sells
the Chemicals.

         1.7 "EXCLUSIVE MARKETS" shall mean End-Customer as shown on Exhibit B.

         1.8  "IMPROVEMENTS"  shall  mean  any  improvements,   enhancements  or
modifications made to the Chemicals.

         1.9  "INTELLECTUAL  PROPERTY  RIGHTS"  collectively  means  any and all
patents,  patent  registrations,  business processes,  data rights,  copyrights,
trade names,  trademarks,  trade  secrets,  know-how,  mask works,  or any other
proprietary rights,  whether registered or unregistered,  arising or enforceable
under U.S.  law or the law of any other  jurisdiction  or  international  treaty
regime.

         1.10  "PRICES"  shall mean those prices for the  Chemicals  supplied by
Water$avr  Global  Solutions  Inc. to Ondeo  Nalco or any Ondeo Nalco  Affiliate
pursuant to the terms of this  Agreement,  as detailed in EXHIBIT C. In no event
shall Prices  offered  under this  Agreement to Ondeo Nalco ever be greater than
Prices  offered  to  other  distributors  or  re-sellers  for the  Services  and
Improvements  sold by  Water$avr  Global  Solutions  Inc.  to third  parties  or
End-Customers for application Exclusive Field of Use.






                                       2
<PAGE>
         1.11 "SHARE OPTION  AGREEMENT" shall mean an Agreement between Flexible
Solutions  and  Ondeo  Nalco  for the grant of share  options  in the  shares of
Flexible Solutions Inc. (FXSO) as outlined in EXHIBIT D.

         1.12 "SPECIFICATIONS" shall mean those specifications for the Chemicals
described in EXHIBIT E.

         1.13 "TERRITORY" shall mean Worldwide.

         1.14  "THRESHOLD  AMOUNTS"  shall mean those net amounts  paid by Ondeo
Nalco to Water$avr Global Solutions Inc. in the time frames indicated in EXHIBIT
F.

         1.15  "TRADEMARKS" shall mean Water$avr, W$.

2.       APPOINTMENT OF ONDEO NALCO.

         2.1 APPOINTMENT.  Water$avr Global Solutions Inc. hereby appoints Ondeo
Nalco as a  distributor  of Chemicals in the  Territory,  and Ondeo Nalco hereby
accepts such appointment.  This appointment shall be exclusive for the Exclusive
Markets  and  non-exclusive  for all other  markets.  If at any time during this
Agreement,  Ondeo Nalco does not make  purchases that meet the Thresholds in the
18 month time frame  outlined in Exhibit F, the  exclusive  appointment  for the
Exclusive Markets shall convert to non-exclusive. Ondeo Nalco may delegate to or
subcontract  its  Affiliates  to perform its  obligations  under this  Agreement
without  the  consent  of  Water$avr  Global  Solutions  Inc.  As  part  of this
Appointment, Water$avr Global Solutions Inc. shall provide the Documentation and
all reasonable  training and support necessary for Ondeo Nalco to distribute the
Chemicals and shall regularly update such Documentation and training services as
reasonably  requested by Ondeo  Nalco.  Ondeo Nalco shall have no rights to sell
Chemicals to customers in the  agricultural  industries  or customers  operating
large retail businesses.

         2.2 FORECASTS. Nothing in this Agreement shall be interpreted to impose
an obligation on Ondeo Nalco to make minimum sales or purchases.

         2.3 INCENTIVE PAYMENT. If Ondeo Nalco meets the Threshold requirements,
Water$avr Global Solutions, Inc. shall pay Ondeo Nalco [____**_________________]
Dollars ($______) (the "Incentive Payment"). The Incentive Payment shall be made
no later than thirty (30) days after Ondeo Nalco meets the Threshold requirement
of having sold **__ million  pounds of  Chemicals  during the first 18 months of
the Agreement.  Interest shall accrue on the Incentive Payment at 1.5% per month
for each month it is overdue.  Water$aver  shall not offset any amounts which it
claims is owed by Ondeo Nalco against the Incentive Payment.



** Certain  information on this page has been omitted and filed  separately with
the  Securities  and  Exchange  Commission.   Confidential  treatment  has  been
requested with respect to the omitted portions.








                                       3
<PAGE>







3.       WATER$AVR GLOBAL SOLUTIONS INC. OBLIGATIONS

         3.1 DELIVERY.  Water$avr  Global  Solutions Inc. shall sell and deliver
the  Chemicals  to Ondeo Nalco at the  destination  specified  by Ondeo Nalco or
Ondeo  Nalco's  Affiliate,  as  applicable,  by no later than fourteen (14) days
after  receipt of (1) a written  purchase  order of Ondeo Nalco or Ondeo Nalco's
Affiliate  or (2) a Ondeo  Nalco or  Ondeo  Nalco's  Affiliate's  electronically
transmitted  purchase  order.  Delivery of the  Products to Ondeo Nalco or Ondeo
Nalco's  Affiliate  shall be F.O.B.  at the  manufacturing  site or distribution
center, as applicable. Time is of the essence of this Agreement.

         3.2 LEGAL COMPLIANCE.  Water$avr Global Solutions Inc. will: (i) comply
with all applicable international,  national, state, regional and local laws and
regulation  with regard to the  Chemicals  and its other  activities  under this
Agreement,  (ii)  obtain at its own  expense all  necessary  permits,  licenses,
registration  and approvals needed in connection with the Products and Services,
(iii)  not  engage  in  any  illegal  or   unethical   practice  in   designing,
manufacturing or otherwise supplying the Products and Services.

         3.3 LABELING. Water$avr Global Solutions Inc. shall label the Chemicals
sold to Ondeo  Nalco  hereunder  in  accordance  with Ondeo  Nalco's  reasonable
labeling instructions.

         3.4 WARRANTIES.  In addition to those other  warranties  stated herein,
Water$avr  Global  Solutions Inc.  represents  and warrants as follows:  (a) the
Chemicals  shall be  non-defective  and shall meet the  Specifications,  (b) the
Chemicals  will,  upon  delivery and for sixty (60) days  thereafter,  (i) be of
merchantable  quality; (c) be fit for particular purpose for the Chemicals;  and
(d) be produced and all services  performed in compliance with applicable local,
state and federal law, rule,  regulation,  standard or code  including,  but not
limited to, environmental protection and occupational health and safety; and (e)
title to the Product is free from any lien or  encumbrance  of any  nature.  All
warranties  shall survive  inspection  and  acceptance of the Chemicals by Ondeo
Nalco or the End Customer and no express  warranties  may be modified  except by
written  agreement  of the  parties.  If the Product  does not conform to any of
these warranties, then, in addition to all other remedies available at law or in
equity,  at Ondeo  Nalco's  option,  Ondeo  Nalco may  return the  Chemicals  to
Flexible  Solutions for full credit or reimbursement or require Water$avr Global
Solutions Inc. to repair or replace the defective Chemicals, at Water$avr Global
Solutions Inc.' expense.  The foregoing  warranties and  obligations  shall also
apply to the  Chemicals  supplied  by  Seller  in such  repair,  replacement  or
re-performance.  All warranties and









                                       4
<PAGE>
indemnities  provided in this Agreement shall survive any subsequent transfer of
title to the  Chemicals  and shall be  enforceable  by the End Customer in every
circumstance.

4.       ORDERS, SHIPMENT AND PAYMENT

         4.1 ORDERS.  To order  Chemical must deliver a written  purchase  order
(each, an "ORDER").

         4.2 PAYMENT.  Ondeo Nalco will pay the Prices for the  Chemicals.  For
clarity,  Ondeo Nalco shall have no obligation to pay for the  Documentation and
any training.

         4.3 SHIPMENT. Time is of the essence of this Agreement.  Any additional
packaging not specified in the Specifications, required by Ondeo Nalco, shall be
at the expense of Ondeo Nalco.

         4.4 CHANGES.  Water$avr  Global  Solutions  Inc. may modify the Prices
annually,  but at no time may an  increase  in the  Prices be  greater  than the
relative  increase in  manufacturing  costs as  specified  in the  Manufacturing
Agreement entered between Ondeo Nalco and Flexible Solutions on April 10, 2002.

         4.5 TAXES. All amounts invoiced hereunder exclude any applicable taxes.
Ondeo Nalco agrees to pay, and to indemnify, and hold Water$avr Global Solutions
Inc.  harmless from,  any sales,  use excise,  import or export,  value added or
similar tax or duty not based on Water$avr Global  Solutions  Inc.'s income,  as
well as the collection or withholding thereof, including penalties and interest,
arising  from payment of amounts due  hereunder,  and all  government  permit or
license fees and all customs and similar fees levied upon the performance of the
services performed hereunder and any costs associated with the collection of any
of the foregoing.  If Ondeo Nalco is required  under  applicable law to withhold
taxes from any  payment  due under this  Agreement,  Ondeo  Nalco will  promptly
notify Water$avr Global Solutions Inc. in writing of such obligation and provide
Water$avr Global Solutions Inc. with official receipts evidencing the payment of
the amount withheld to the appropriate government authority.

         4.6 LATE PAYMENTS.  If Ondeo Nalco fails to make any payment when due,
Water$avr  Global  Solutions  Inc. may,  without  prejudice to its other rights,
charge a late payment fee on the outstanding balance of one and one-half percent
per month or the maximum  rate allowed by law,  whichever is less.  All payments
made by Ondeo Nalco must be made in U.S. dollars in immediately available funds.

5.       INTELLECTUAL PROPERTY

         5.1 LICENSE GRANTS.

            (A)  Water$avr  Global  Solutions  Inc.  grants  to Ondeo  Nalco the
paid-up  right  during  the  term of this  Agreement  to use the  Trademarks  in
conjunction with its sales and marketing activities hereunder. Ondeo Nalco shall
not, without Water$avr Global Solutions Inc.'s prior written consent, use any of
the  Trademarks  in Ondeo  Nalco's  business  name or in any other  manner  that
suggests an affiliation  between Ondeo Nalco and Water$avr Global Solutions Inc.
other than that of  independent  Ondeo Nalco and  supplier or in any manner that





                                       5
<PAGE>
may give rise to a combination  mark.  Water$avr  Global Solutions Inc. makes no
representation  or warranty as to the ownership,  enforceability  or validity of
the Trademarks.  Ondeo Nalco  acknowledges and agrees that it does not have, and
by virtue of this Agreement will not acquire, any right or title to, or goodwill
or interest in, any Trademark, and that all use of the Trademarks by Ondeo Nalco
will inure to the exclusive  benefit of Water$avr  Global  Solutions Inc.. Ondeo
Nalco shall not challenge or take any action  inconsistent with Water$avr Global
Solutions  Inc.'s  rights in the  Trademarks  and shall not do anything that may
adversely affect the validity or enforcement of the Trademarks. Ondeo Nalco will
not register or attempt to register any  Trademark  in any  jurisdiction  in the
world,  without the prior written  consent of Water$avr  Global  Solutions Inc..
Ondeo Nalco will not use any Trademark in any manner that would tend to allow it
to become  generic or lose  distinctiveness.  Ondeo  Nalco will  comply with all
reasonable  policies  and  guidelines  (including  quality  control  guidelines)
concerning use of the Trademarks that Water$avr  Global Solutions Inc. may adopt
from time to time.

         5.2  INDEMNIFICATION.  Water$avr Global Solutions Inc. warrants that it
owns  or  has  rights  to  the  Water$avr  Global  Solutions  Inc.  Confidential
Information,  Trademarks, Chemicals and Intellectual Property Rights relating to
the Chemicals and  Improvements.  Water$avr  Global Solutions Inc. shall defend,
indemnify   and  hold   harmless   Ondeo  Nalco,   its  agents,   employees  and
representatives from any and all claims, demands,  lawsuits,  charges, losses or
expenses that the Water$avr  Global  Solutions  Inc.  Confidential  Information,
Trademarks  or  Intellectual  Property  Rights  infringe the rights of any third
party.  Water$avr  Global  Solutions  Inc.  warrants  that  no  third  party  is
infringing its rights in its Confidential Information, Trademarks, Chemicals and
Intellectual Property Rights relating to the Chemicals and Improvements

6.       DOCUMENTATION

         6.1  DOCUMENTATION.  Water$avr Global Solutions Inc. will provide Ondeo
Nalco with one master copy of each item of the Documentation,  in both hard copy
and machine readable text. At Ondeo Nalco's sole expense,  Ondeo Nalco will make
copies  of  the  Documentation,   in  whole  or  in  part,  or  incorporate  the
Documentation  into Ondeo Nalco's  documentation  but without any  modification.
Ondeo Nalco will make only the number of copies of the  Documentation,  or Ondeo
Nalco's documentation, necessary for the purposes of this Agreement. Ondeo Nalco
shall not modify the  Documentation  without  Water$avr  Global Solutions Inc.'s
express written consent.  Water$avr Global Solutions Inc. hereby grants to Ondeo
Nalco a  limited,  non-exclusive,  nontransferable  license,  without  right  to
sublicense,  during the Term to reproduce and  distribute the  Documentation  to
End-Customers  in the Territory solely in connection with the marketing and sale
of the Services and Web-Hosting Services.

7.       CONFIDENTIALITY

         7.1  CONFIDENTIAL  INFORMATION.  The  parties  acknowledge  that in the
course of performance of their obligations under this Agreement, each party (the
"RECIPIENT") may obtain certain Confidential Information of the other party (the
"DISCLOSING  PARTY.) All such  Confidential  Information  shall be protected and
held in the strictest confidence and trust by the Recipient and not disclosed to
any third parties;  provided however, that Recipient may disclose the Disclosing
Party's   Confidential   Information  to  employees,   agents,   consultants  or
subcontractors who have executed  non-disclosure  agreements with terms at least
as  restrictive  as those  set  forth  herein  and


                                       6
<PAGE>
who have a need to know such Confidential  Information without the prior written
permission of the Disclosing Party. Further, Confidential Information shall only
be used for the purpose of performing obligations under this Agreement.

         7.2 EXCLUSIONS. Notwithstanding the foregoing, Confidential Information
shall not  include  any  information  which  the  Recipient  can  prove is:  (i)
available to the public other than by breach of this Agreement by the Recipient;
(ii)   rightfully   received  by  the  Recipient  from  a  third  party  without
confidential   limitations;   (iii)  entirely  and  independently  developed  by
employees or  subcontractors of the Recipient having no access to or without the
use of the  Disclosing  Party's  Confidential  Information;  (iv)  known  to the
Recipient  prior to its first  receipt of same from the  Disclosing  Party;  (v)
approved for release by written  authorization of the Disclosing  Party; or (vi)
disclosed by reason of legal,  accounting or regulatory  requirements beyond the
reasonable  control of the Recipient or the Disclosing  Party,  provided however
that if Recipient is required to disclose  Confidential  Information,  Recipient
shall promptly  notify the  Disclosing  Party of the order or request and permit
the  Disclosing  Party (at its own  expense) to seek an  appropriate  protective
order. Recipient shall reasonably cooperate with the Disclosing Party in seeking
such protective order.

         7.3 PUBLICITY.  Except as otherwise provided herein neither party shall
disseminate any publication, news release or other public announcement,  written
or oral, whether in the public press, or stockholders'  reports (if applicable),
or otherwise,  which  references this Agreement,  or the  relationship  embodied
herein,  without first securing the written  permission of the other party, such
permission not to be unreasonably withheld.

         8.  FORCE MAJEURE

         8.1 FORCE MAJEURE.  The parties agree and acknowledge  that there shall
be no liability  arising out of this  Agreement  attributable  to forces  beyond
their reasonable control,  including,  without  limitation,  acts of God, riots,
acts of terrorism,  revolutions,  war, power outages,  government  acts,  fires,
flood, epidemics, lockouts, strikes, or slowdowns.

         9.  INDEMNIFICATION

         9.1 BY WATER$AVR GLOBAL SOLUTIONS INC.. Water$avr Global Solutions Inc.
hereby  agrees  to  indemnify,  defend  and hold  harmless  Ondeo  Nalco and its
officers,  directors,  employees and agents from and against any and all claims,
demands,  causes of action,  damages,  costs,  expenses,  penalties,  losses and
liabilities (whether under a theory of negligence, strict liability, contract or
otherwise) incurred by any such party (including, without limitation, reasonable
attorney's  and other third party  fees)  arising out of or related to any:  (a)
breach of  representation  or covenant  stated  herein,  (b) its  negligence  or
willful  actors or  omissions  and (c) any  third  party  claim  that use of the
Software  or any  Product  by Ondeo  Nalco  or any  End-Customer  infringes  any
Intellectual  Property Right of such third party.  Should any product become, or
in Water$avr Global Solutions Inc.'s opinion be likely to become, the subject of
any such suit or action for  infringement or if Ondeo Nalco or any  End-Customer
is enjoined  from using any product,  Water$avr  Global  Solutions  Inc. may, at
Water$avr Global Solutions Inc.'s sole option and expense: (a) procure for Ondeo
Nalco the right to  continue  using such  product;  (b)  replace or modify  such
Product so that it becomes non-infringing;  or (c) if Water$avr Global



                                       7
<PAGE>
Solutions  Inc.  reasonably  determines  that  (a) and (b) are not  commercially
feasible, then Water$avr Global Solutions Inc. may terminate this Agreement with
no further  obligation  to Ondeo Nalco and refund any  amounts  prepaid by Ondeo
Nalco for Services not actually rendered.

         9.2 BY ONDEO NALCO. Ondeo Nalco hereby agrees to indemnify,  defend and
hold harmless  Water$avr  Global  Solutions  Inc. and its  officers,  directors,
employees  and agents from and against  any and all claims,  demands,  causes of
action,  damages,  costs, expenses,  penalties,  losses and liabilities (whether
under a theory of negligence,  strict liability, contract or otherwise) incurred
by any such party (including without limitation, reasonable attorneys' and other
third party fees)  arising out of or relating  to: (i) any breach by Ondeo Nalco
of its obligations or responsibilities  under this Agreement;  (ii) any claim of
any  End-Customer  or any other third party  arising from or related to the use,
operation or  performance of the System or any component  thereof;  or (iii) any
claim by any third  party  arising  out of or  related  to any of Ondeo  Nalco's
dealings with any End-Customer.

         9.3 PROCEDURES. For purposes of this Section 10, the party obligated to
provide the  indemnity  described  in this Section 10 will be referred to as the
"INDEMNITOR"  and the party  receiving  the  benefit of such  indemnity  will be
referred to as the "INDEMNITEE." The Indemnitor's  obligations set forth in this
Section 10 are conditioned on (i) the Indemnitor's  prompt written notice of any
indemnified  claim; (ii) the Indemnitee  permitting the Indemnitor to assume and
control the defense of the action,  with counsel chosen by the  Indemnitor  (who
must be  reasonably  acceptable to the  Indemnitee);  and (iii)  Indemnitor  not
entering into any settlement or compromise that imposes  liability on or affects
the  rights of  Indemnitee  of any such claim  without  the  Indemnitee's  prior
written  approval,  not  to  be  unreasonably   withheld.   Notwithstanding  the
Indemnitor's  obligations  to handle and  defend all claims as set forth  above,
Indemnitee may, at its sole option, take whatever action it deems reasonable and
appropriate  in  the  handling,   defense,   or  settlement  of  any  claim,  at
Indemnitor's  expense.  However,  the  Indemnitee  must notify the Indemnitor in
writing of any proposed settlement of a claim.

         10.  INSURANCE.  Upon  execution of this  Agreement,  Water$avr  Global
Solutions Inc. shall provide to Ondeo Nalco copies of insurance certificates for
the policy coverage and insurance limits set forth below:

Coverage                                        Policy Limit
--------                                        ------------
Workers' Compensation                           statutory requirements

Employer's Liability                            to the extent included under
                                                Workers' Comp policy
Comprehensive General Liability
   -  bodily injury                             $4 million each occurrence
   -  property damage                           $4 million each occurrence

Property Damage                                 $4 million each occurrence

Comp Auto Liability
   -  Bodily injury                             $1 million per person/$1 million
                                                each occurrence




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<PAGE>
   -  Property damage                           $1 million each occurrence

Product Liability                               $2 million each occurrence

Umbrella Policy                                 $2 million aggregate

The  Comprehensive  General  Liability,  Product  Liability and Umbrella  Policy
policies  of  insurance  evidenced  by the  certificates  described  above shall
contain a provision  or  endorsement  stating that Ondeo Nalco shall be named as
additional  insured.  Each  certificate of insurance  provided  hereunder  shall
include a  provision  for ten (10) days prior  written  notice to Ondeo Nalco in
advance of the cancellation thereof.

         11. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO
THE  OTHER OR ANY  THIRD  PARTY FOR ANY LOST  PROFITS,  LOSS OF DATA,  EQUIPMENT
DOWNTIME, OR ANY OTHER SPECIAL, INDIRECT, CONSEQUENTIAL,  PUNITIVE OR INCIDENTAL
DAMAGES,  HOWEVER  CAUSED  AND ON ANY  THEORY OF  LIABILITY,  ARISING  OUT OF OR
RELATED TO THIS AGREEMENT, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

TERM AND TERMINATION

         12.1 TERM. The term of this Agreement will end on the fifth anniversary
of the Effective Date,  unless Ondeo Nalco notifies  Water$avr  Global Solutions
Inc. that it wishes to extend the Term (the "TERM").

         12.2  TERMINATION.  This  Agreement  may be  terminated by either party
effective immediately upon written notice to the other party if the other party:
(i) breaches any provision of this Agreement or and fails to cure such breach to
the  satisfaction of the terminating  party within thirty (30) days after notice
thereof from the terminating  party;  (ii) files a voluntary  petition under any
bankruptcy,  insolvency or similar law, has an  involuntary  petition  under any
such law filed against it which is not dismissed within forty-five (45) days, or
has a receiver, custodian or similar authority appointed to manage or dispose of
its assets; (iii) becomes insolvent or is generally not paying its debts as such
debts  become due;  or (iv) ceases to function as a going  concern or to conduct
its operations in the normal course of business.

         12.3 ONDEO NALCO  TERMINATION  RIGHT.  Ondeo Nalco may  terminate  this
Agreement at any time upon six (6) months  written  notice to  Water$avr  Global
Solutions Inc..

         12.4  SURVIVAL.  Notwithstanding  the expiration or termination of this
Agreement,    the   representations   and   warranties,    indemnification   and
confidentiality obligations shall survive and continue.

         12.5 SHARE OPTION AGREEMENT. Upon expiration and/or termination of this
agreement,  all  unexercised  shares  rights  under the Share  Option  Agreement
(Exhibit D) shall become null and void.

13.  GENERAL PROVISIONS







                                       9
<PAGE>
         13.1 RELATIONSHIP OF THE PARTIES. Water$avr Global Solutions Inc. is an
         independent contractor and is not an agent, joint venturer,  partner or
         employee of Ondeo Nalco.  The detailed  manner and method of performing
         the Services are under the sole control of Water$avr  Global  Solutions
         Inc.

         13.2 CONFLICT.  Any purchase order or other  documents  issued by Ondeo
         Nalco is for  administrative  convenience  only.  In the event any such
         purchase order or other  document  issued by Ondeo Nalco is in addition
         to or  conflicts  with any term or provision  of this  Agreement,  this
         Agreement  shall  prevail and the  additional  or  conflicting  term is
         hereby rejected.

         13.3  SEVERABILITY.  If any provision of this  Agreement is found to be
         invalid,   unlawful   or   unenforceable   by  a  court  of   competent
         jurisdiction,  such  invalid  term will be severed  from the  remaining
         portion  of  this  Agreement,  which  will  continue  to be  valid  and
         enforceable to the fullest extent permitted by law.

         13.4  NOTICES.  All  notices  and  other  communications   required  or
         permitted  under this Agreement shall be in writing and shall be deemed
         given when delivered personally, transmitted via facsimile transmission
         (fax)  with  verification  of  delivery  or five (5) days  after  being
         deposited in the United States  registered  mail,  postage  prepaid and
         addressed  as  follows,  or to such  other  address  as each  party may
         designate in writing:

                  If to WATER$AVR GLOBAL SOLUTIONS INC.:

                  Water$avr Global Solutions Inc.
                  P.O. Box 262
                  Charleston, IL 61920
                  ATTN: Patrick Grant
                  Facsimile:  (250) 477-9912


                  If to ONDEO NALCO:

                  ONDEO NALCO COMPANY
                  Ondeo Nalco Center
                  Naperville, IL  60563
                  -----------------------
                  Attention: General Counsel
                  Facsimile:630-305-2985


13.5 GOVERNING LAW. This Agreement will be governed by and construed  solely and
exclusively  under  the laws of the  State of  Illinois,  without  reference  to
conflict  of  law  principles.   Both  parties  agree  to  submit  to  exclusive
jurisdiction  in the  State of  Illinois,  and  further  agree  that any and all
disputes  arising  under or  related  to this  Agreement  shall be  brought  and
resolved solely and exclusively in the State of Illinois.






                                       10
<PAGE>
13.6  ENTIRE  AGREEMENT.  This  Agreement  and the  Exhibit  contain  the entire
agreement  and  understanding  between the parties  with  respect to the subject
matter hereof and merges and supersedes all prior or contemporaneous agreements,
understandings,  and  representations.  No  addition  or  modification  to  this
Agreement is valid unless made in writing and signed by both parties hereto.

13.7 HEADINGS AND  REFERENCES.  The headings and captions used in this Agreement
are used for  convenience  only and are not to be  considered  in  construing or
interpreting  this  Agreement.  All references in this Agreement to Sections and
Exhibits will, unless otherwise provided,  refer to Sections hereof and Exhibits
hereto, all of which are incorporated herein by this reference.

13.8  AUTHORITY.  The parties  executing  this  Agreement on behalf of Water$avr
Global  Solutions  Inc. and Ondeo Nalco  warrant that they have the authority to
enter into this  Agreement  and to bind their  respective  company to all of the
terms and conditions of this Agreement.

13.9  WAIVER.  The failure of either party to require  performance  by the other
party of any  provision  hereof  will not affect the full right to require  such
performance  at any time  thereafter;  nor will the waiver by either  party of a
breach of any provision  hereof be taken or held to be a waiver of the provision
itself.

13.10  NON-EXCLUSIVITY.  Except  as  otherwise  indicated  herein,  Ondeo  Nalco
acknowledges  and agrees that Water$avr  Global Solutions Inc. has the right to,
may be and could be performing  services for  businesses  other than Ondeo Nalco
including,  without  limitation,  other companies  engaged in businesses or with
applications  similar to that of Ondeo  Nalco.  Except as  otherwise  prohibited
herein,  this Agreement shall not prohibit  Water$avr Global Solutions Inc. from
performing  services for such other  businesses  wherever  located or related to
such  applications  or  from  utilizing  any  Water$avr  Global  Solutions  Inc.
technology or Intellectual Property Rights for such purpose.

13.11  ASSIGNMENT.  Neither  party shall assign or delegate this  Agreement,  in
whole or in part,  without the prior written  consent of the other party,  which
consent shall not be unreasonably withheld or delayed;  provided,  however, that
Water$avr  Global  Solutions  Inc.  may  delegate  certain  of  its  obligations
hereunder to independent subcontractors;  provided, further, however that either
party   may   assign   this    Agreement   to   a   parent,    subsidiary,    or
successor-in-interest   to  its  business   (whether  by  merger,   acquisition,
consolidation, or sale of substantially all of the assets of such party) if such
assignee  assumes in writing all of the  obligations of the assignor  hereunder.
Any attempted  assignment  or delegation in violation of the preceding  sentence
will be null and void. Subject to the foregoing, this Agreement shall be binding
on and inure to the benefit of the parties and their  respective  successors and
permitted assigns.

13.12 INJUNCTIVE RELIEF.  Notwithstanding any other provision of this Agreement,
a breach of Section 7.1 or 9 will cause  irreparable  harm to the  non-breaching
party.  Therefore,  any such  attempted  or  actual  breach  shall  entitle  the
non-breaching party to seek, wherever it deems appropriate, injunctive relief in
addition to all other remedies available.

13.13 BOARD APPROVAL CONDITION.  This Agreement is conditioned upon the approval
of the Board of  Directors  of Flexible  Solutions  being  obtained on or before
September 1, 2002. In the


                                       11
<PAGE>
event that such  approval is not  obtained by that date,  and written  notice of
such approval  provided to Ondeo Nalco,  this Agreement shall be considered null
and void.



                                    GUARANTEE

In  consideration  for  Ondeo  Nalco  entering  into  this  Agreement,  Flexible
Solutions hereby absolutely and  unconditionally  guarantees the obligations and
commitments  of  Water$avr  Global  Solutions,  Inc. to be  performed  in strict
accordance with the terms stated herein. Flexible Solutions waives any notice of
the  acceptance of this guaranty and the  incurring of  obligations,  and waives
presentment, demand, protest or notice of dishonor, nonpayment or other default.
There  shall  be  no  requirement   for,  and  Flexible   Solutions  waives  any
requirement,  for Ondeo  Nalco to make any  demand on or pursue or  exhaust  any
rights against Water$avr Global Solutions, Inc.



                           [SIGNATURE PAGE TO FOLLOW]





































                                       12
<PAGE>
         IN WITNESS WHEREOF,  this Agreement has been executed by the parties as
of the Effective Date.


FLEXIBLE  SOLUTIONS INC.                  ONDEO NALCO COMPANY


By:                                       By:
    ------------------------------------       ---------------------------------

Name:                                     Name:
      ----------------------------------        --------------------------------

Title:                                    Title:
       ---------------------------------         -------------------------------



WATER$AVR GLOBAL SOLUTIONS, INC.


By:
    ------------------------------------

Name:
      ----------------------------------

Title:
       ---------------------------------






























<PAGE>
                                    EXHIBIT A
                                    ---------
                                    Chemicals


Initial  Product  Specifications  and  Packaging  (subject  to  review  based on
subsequent  manufactured  batches;  provided that any changes shall be agreed in
writing)

RAW MATERIALS:

Hydrated Lime (90% by weight)

     NSF 60 or Food Grade

     Minimum CA (OH)2 content of 95%

     Minimum % Passing through a 200 mesh screen of 90%

Cetyl Alcohol (5% by weight)

Food Grade or Pharmaceutical Grade

Minimum C-16 content of 90%

Stearyl Alcohol (5% by weight)

     Food Grade or Pharmaceutical Grade

     Minimum C-18 content of 90%

PACKAGING:

50 pound  Kraft  paper / HDPE  multi wall bags to be  palletized  at 40 bags per
pallet (2,000 lbs. per pallet)

Polypropylene Super Sacks to contain 2,000 lbs. each.

FINISHED PRODUCT:

Particle Size     Minimum of 80% pass through a 100 mesh screen using a Ro-Tap
                  Machine

Friability        Particles  not passing the 100 mesh screen  should be
                  pressed/rolled  with  1"  diameter  steel  roller  to
                  ensure remaining particles are friable













<PAGE>
                                    EXHIBIT B
                                    ---------
                                Exclusive Markets



Exclusive Markets assigned to Ondeo Nalco:





        Municipal Market in Canada and the United States of America

        Mineral & Mining Industries in all countries except:

          India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Mauritius,
          Malaysia & Singapore



Non-Exclusive  Markets  Assigned  to Ondeo  Nalco  include  all  markets  in all
countries with the exception of the following countries:

         India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Mauritius,
         Malaysia & Singapore



In the event that  Water$avr  Global  Solutions  Inc.  negotiates  an  exclusive
distributorship  with  another  distributor  in a  non-exclusive  market  and/or
country,  Water$aver Global Solutions,  Inc. shall provide Ondeo Nalco notice of
such pending exclusive distributorship and permit Ondeo Nalco a thirty day right
to accept the exclusive  arrangement  on the same terms and  conditions,  before
Water$aver  Global  Solutions,  Inc.  enters into the  agreement  with the third
party.  If  Water$aver   Global   Solutions,   Inc.  enters  into  an  exclusive
distributorship  with a third party for the municipal  markets  outside of North
America in all or most of the material first-world countries in Europe and Asia,
then the  Thresholds  shall be reduced by 25% for purposes of this Agreement and
the Share Option Agreement. If Water$aver Global Solutions,  Inc. enters into an
exclusive  distributorship  for any smaller municipal territory outside of North
America,  for each such agreement the Thresholds shall be reduced by 5%, up to a
total  reduction  of 25%, for  purposes of this  Agreement  and the Share Option
Agreement.















<PAGE>
                                    EXHIBIT C
                                    ---------
                                     Prices



Water$avr               all packages                        $**/# F.O.B. Plant







** Certain  information on this page has been omitted and filed  separately with
the  Securities  and  Exchange  Commission.   Confidential  treatment  has  been
requested with respect to the omitted portions.










































<PAGE>
                                    EXHIBIT D
                                    ---------
                             Share Option Agreement



1.       Upon the Effective Date of the Distribution Agreement - Ondeo Nalco has
         the  option  to  purchase  1,000,000  shares  of FXSO  common  stock at
         $4.25/share.  To  exercise  this  option , Ondeo  Nalco has to meet the
         following covenants:
           a. The  Distributorship  Agreement has not been terminated for reason
              of a default by Ondeo Nalco.
           b. If the price of FXSO stock reaches  $6.75/share,  and closes at or
              above $6.75/share for five consecutive  business days, Ondeo Nalco
              must  exercise  this option or forfeit  rights to option within 60
              calendar days of the fifth consecutive day specified above.


2.       If the threshold  sales levels  specified in Exhibit F, are attained by
         Ondeo Nalco during the initial term covered by this agreement,  then an
         option for 1,000,000 shares of FXSO will be granted to Ondeo Nalco with
         a strike price of $5.50/share. To exercise this option, Ondeo Nalco has
         to meet the following covenants:
           a. The  Distributorship  Agreement has not been terminated for reason
              for a default by Ondeo Nalco.
           b. If the  share  price of FXSO  closes  above  $8.00/share  for five
              consecutive  business  days,  then Ondeo Nalco must  exercise this
              option within 60 calendar days or forfeit its option. If the price
              of FXSO shares is already above  $8.00/share for five  consecutive
              days at the time this  option  ripens,  Ondeo  Nalco shall have 90
              calendar days from the time the option ripens to exercise.

The  parties  will  promptly,  and in good  faith  after the  execution  of this
Agreement  prepare a written  agreement to reflect the terms and  conditions  of
this option,  and if such written option  agreement is not executed on or before
October  1,  2002,   Ondeo  Nalco  shall  have  the  right  to  terminate   this
Distributorship Agreement.






















<PAGE>
                                    EXHIBIT E
                                    ---------
                                 Specifications



FINISHED PRODUCT:

Particle Size              Minimum of 80% pass through a 100 mesh screen using a
                           Ro-Tap Machine

Friability                 Particles  not passing the 100 mesh screen  should be
                           pressed/rolled  with  1"  diameter  steel  roller  to
                           ensure remaining particles are friable

The Products shall be fit for their intended purpose.











































<PAGE>
                                    EXHIBIT F
                                    ---------
                                Threshold Amounts





The  following  threshold  pounds are  required to maintain  this  agreement  as
exclusive:

 (Time frame starting with the effective date of this agreement)



Time Frame                      Period Amount           Cumulative Total Amount

6 Months                           **_______#                 **_______#

12 Months                          **_______#                 **_______#

18 Months                          **_______#                 **_______#

18 - 30 Months                     **_______#                 **_______#

31 Months - 42 Months              **_______#                 **_______#

43 Months -  54 Months             **_______#                 **_______#

55 Months - 60 Months              **_______#                 **_______#








** Certain  information on this page has been omitted and filed  separately with
the  Securities  and  Exchange  Commission.   Confidential  treatment  has  been
requested with respect to the omitted portions.