Document:

EXHIBIT 10.20

                            STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement is entered into as of October 11, 2000, between
MORCOB, CVA, a commanditaire vennootschap op aandelen organized under the laws
of Belgium ("Seller") and IVAX Corporation, a Florida corporation ("Buyer").

                             Preliminary Statements

         A.       Seller owns all of the outstanding shares of capital stock of
Maancirkel Holding, B.V., a corporation organized under the laws of the
Netherlands (the "Company").

         B.       The Company owns, or as of the Closing Date, will own, all but
one of the outstanding shares of capital stock of Laboratorios Fustery, S.A. de
C.V., a corporation organized under the laws of Mexico ("Fustery"), which one
share is, or as of the Closing Date will be, owned by the Seller.

         C.       Fustery has three wholly owned Subsidiaries and is engaged
principally in the business of manufacturing, distributing and marketing
pharmaceutical products (Fustery and its three Subsidiaries are referred to
herein as the "Company Subsidiaries").

         D.       Seller owns, or as of the Closing Date, will own, directly or
indirectly, all of the outstanding shares of capital stock of the Company and
the Company Subsidiaries, and desires to sell to Buyer, and Buyer desires to
acquire, on the terms and subject to the conditions set forth in the Agreement,
all of the shares of capital stock of the Company and, therefore, the Company
Subsidiaries.

                                    Agreement

         In consideration of the preliminary statements and the respective
mutual covenants, representations and warranties contained in this Agreement,
the parties agree as set forth below.

                                    ARTICLE 1

                                   DEFINITIONS

         In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:

         "Affiliate" of a specified Person means a Person who (at the time when
the determination is to be made) directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
the specified Person; provided, however, that "Affiliate" does not include a
natural person solely by virtue of the ownership of less than 2% of an entity.
As used in the foregoing sentence, the term "control" (including, with
correlative meaning, the terms "controlling," "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise. In
the case of Seller, Affiliates does not include any entities which are not
related to this transaction or any other prior or simultaneous transaction in
connection herewith.

         "Agreement" means this Stock Purchase Agreement together with all
disclosure schedules referred to herein.

         "AMEX" means the American Stock Exchange, LLC.

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         "Buyer Material Adverse Effect" means any change in or effect on the
business of Buyer that is, or could reasonably be expected to be, materially
adverse to the business, assets (including intangible assets), liabilities
(contingent or otherwise), condition (financial or otherwise), prospects or
results of operations of Buyer; provided, however, that none of the following
shall constitute a Buyer Material Adverse Effect: changes in the market price of
Buyer's publicly-traded securities or events or conditions generally affecting
the pharmaceutical manufacturing, distribution and marketing industries,
including general changes in the market prices or interest rates.

         "Cash Reserves" means cash and cash equivalents in each case as
reflected on the Closing Date Balance Sheet as finally determined in accordance
with Section 2.4 hereof.

         "Company Material Adverse Effect" means any change in or effect on the
business of the Company and the Company Subsidiaries that is, or could
reasonably be expected to be, materially adverse to the business, assets
(including intangible assets), liabilities (contingent or otherwise), condition
(financial or otherwise), prospects or results of operations of the Company and
Company Subsidiaries taken as a whole; provided, however, that none of the
following shall constitute a Company Material Adverse Effect: events or
conditions generally affecting the pharmaceutical manufacturing, distribution
and marketing industries, including general changes in the market prices or
interest rates.

         "Debt" means all debt excluding amounts payable to suppliers and other
liabilities incurred in the ordinary course of business, all as determined with
Mexican GAAP consistently applied.

         "Environmental Laws" means any applicable domestic or foreign statute,
law, ordinance, regulation, rule, code or order and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

         "Guaranty" means, as to any Person, any contract, agreement or
understanding of such Person pursuant to which such Person guarantees the
indebtedness, liabilities or obligations of others, directly or indirectly, in
any manner, including agreements to purchase such indebtedness, liabilities or
obligations, or to supply funds to or in any manner invest in others, or to
otherwise assure the holder of such indebtedness, liabilities or obligations
against loss.

         "Hazardous Materials" means (a) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated byphenyls or (b) any chemical, material or
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.

         "Including" means including, without limitation, or including, but not
limited to.

         "Intellectual Property" means any or all of the following items which
are owned, used or controlled by the Company and/or the Company Subsidiaries:
(a) all trademarks, service marks, trade dress, and trade names, together with
all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; and (b) all copyrights, and
all applications, registrations, and renewals in connection therewith.

         "Knowledge" means, with respect to any representation or warranty or
other statement in this Agreement qualified by the knowledge of any party, the
actual knowledge of such party after reasonable investigation. Where reference
is made to the knowledge of the Company Subsidiaries, such reference shall mean
the actual knowledge after reasonable investigation of Domingo Benavides
Arredondo, Fernando Diaz Morlet and Domingo Criollo.

         "Law" means any applicable foreign or domestic law, statute, ordinance,
rule, regulation, order, writ, judgment or decree.

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<PAGE>

         "Liens" means any liens, pledges, security interests, mortgages,
options, title defects or other encumbrances, or similar claims.

         "MP$" means currency of United Mexican States.

         "Mexican GAAP" means Mexican generally accepted accounting principles.

         "Person" means any natural person, corporation, limited liability
company, unincorporated organization, partnership, association, joint stock
company, joint venture, trust or government, or any agency or political
subdivision of any government, or any other entity.

         "SEC" means the United States Securities and Exchange Commission.

         "Securities" means all of the issued and outstanding stock of the
Company.

         "Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

         "Shares" means the common stock of Buyer, par value US$.10 per share.

         "Subsidiary" of any Person means any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of 50% or more, or any Person which may be controlled, directly or
indirectly, by such Person, whether through the ownership of voting securities,
by contract, or otherwise.

         "Tax" means any federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax or
governmental charge, of any kind whatsoever, including any interest, penalties
or additions to tax or additional amounts in respect of the foregoing; the
foregoing shall include any transferee or secondary liability for a Tax and any
liability assumed by agreement or arising as a result of being (or ceasing to
be) a member of any affiliated group (or being included, or required to be
included, in any tax return relating thereto).

         "US GAAP" means United States generally accepted accounting principles.

         "US$" means currency of the United States of America.

         "Working Capital" means current assets less current liabilities,
excluding (i) Debt; (ii) cash and cash equivalents, and (iii) liabilities for
which Seller is obligated hereunder.

                                    ARTICLE 2

                      PURCHASE OF SECURITIES; CONSIDERATION

         2.1      Securities to be Purchased. Subject to the terms and
conditions set forth herein, on the Closing Date, Seller shall sell to Buyer,
and Buyer shall purchase from Seller, all of Seller's right, title and interest
in and to the Securities.

         2.2      Consideration.

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<PAGE>

         (a) In consideration of the sale, assignment, transfer and delivery of
the Securities by Seller to Buyer, Buyer will pay the purchase price (the
"Purchase Price") of One Hundred Seventeen Million United States Dollars
(US$117,000,000) by delivery to

                  (i) Seller of One Million Three Hundred Twenty-Five Thousand
Five Hundred and Nineteen (1,325,519) Shares ("Exchange Shares"), which Shares
shall be dated as of the Closing Date provided that the actual certificates
therefore may be delivered within ten (10) business days after the Closing Date,

                  (ii) Seller of an amount equal to the sum of Thirty Million
United States Dollars (US$30,000,000) in immediately available funds on the
Closing Date, and

                  (iii) Custodial Trust Company, as escrow agent, or such other
independent escrow agent which shall be satisfactory to the parties hereto (the
"Escrow Agent"), Thirty Million Dollars (US$30,000,000) ("Escrowed Property") to
be held in escrow pursuant to the escrow agreement (the "Escrow Agreement").

         (b)      All Escrowed Property held in escrow shall be available for
distribution by the Escrow Agent, subject to the provisions of this Agreement
and the Escrow Agreement, to reimburse any Buyer Indemnified Party in respect of
any Liabilities that are indemnifiable pursuant to Section 6.4 of this
Agreement.

         (c)      All costs and expenses, including attorneys' fees, related to
or arising from the engagement or services of the Escrow Agent shall be paid by
Seller.

         2.3      Adjustment of Exchange Shares.

         (a)      Option to Subject Exchange Shares to Adjustment.

                  (i)      On the date hereof, the Seller shall have an option
(the "Option") to elect to deposit some or all of the Exchange Shares (the
number of Shares so deposited, hereinafter the "Initial Adjustment Shares") with
[Custodial Trust Company], or such other independent escrow agent which shall be
satisfactory to the parties (the "Adjustment Escrow Agent") for the purpose of
making such Initial Adjustment Shares subject to a Post-Closing Adjustment as
described in subsection (b) below, all in accordance with the terms of the
Adjustment Escrow Agreement set forth as Exhibit 7.2(n)-2. The Option may only
be exercised by the Seller by delivery of written notice to the Adjustment
Escrow Agent, the Escrow Agent, and the Buyer of the Seller's intent to exercise
the Option for the number of applicable Initial Adjustment Shares at the
Closing, and by the execution and delivery of the Adjustment Escrow Agreement
set forth as Exhibit 7.2(n)-2 hereto (and the stock powers and other agreements
and instruments contemplated therein). If the Option is not exercised in the
manner set forth above at the Closing, the Option shall expire at the Closing.

                  (ii)     From the Closing Date until the date which is ninety
(90) days after the date hereof (the "Final Option Withdrawal Date"), Seller
shall have the option (the "Withdrawal Option") to withdraw some or all of the
Initial Adjustment Shares (but shall have no option to increase the amount of
Initial Adjustment Shares, nor to otherwise deposit additional Exchange Shares,
nor to redeliver to the Adjustment Escrow Agent any Exchange Shares withdrawn
pursuant to the exercise of a Withdrawal Option) from escrow (the Initial
Adjustment Shares less the number of Exchange Shares so withdrawn pursuant to
the exercise of Withdrawal Option shall be hereinafter referred to as the
"Adjustment Shares"). The Withdrawal Option may be exercised by the Seller at
any time and from time to time after the Closing Date but on or prior to the
Final Option Withdrawal Date, by delivery of written notice to the Adjustment
Escrow Agent and the Buyer of the Seller's intention to exercise such Withdrawal
Option for the specified number of applicable Initial Adjustment Shares. Upon
receipt of the Seller's written notice exercising a Withdrawal Option, the
Adjustment Escrow Agent shall deliver to the Seller the number of Initial
Adjustment Shares specified in such notice within 20 days of receipt of such
notice and the Adjustment Escrow Agent shall not have any requirement to seek
the consent of the Buyer prior to such delivery (provided that if the notice
specifies an amount of Exchange Shares greater than the amount held by the
Adjustment Escrow Agent such Withdrawal Option shall be deemed to be invalidly
exercised). The Withdrawal Option shall expire on the Final Option Withdrawal
Date.

         (b)      Post-Closing Adjustment of Exchange Shares.

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<PAGE>

                  (i)      If on the date which is One Hundred Eighty (180) days
following the date hereof (the "Adjustment Date"), the Price Guaranty Average
(as defined below) is less than US$43.00, then Buyer shall deliver either, at
its sole option, (1) an additional number of Shares to Seller or Escrow Agent,
as the case may be, equal to the aggregate number of Shares which when valued at
the Price Guaranty Average, are equal to the difference between the Price
Guaranty Average and US $43.00 multiplied by the number of Adjustment Shares, or
(2) cash to Seller in an amount equal to the difference between the Price
Guaranty Average and US$43.00 multiplied by the number of Adjustment Shares. In
addition, the parties shall provide written notice to the Adjustment Escrow
Agent certifying the calculations and the Adjustment Escrow Agent shall deliver
to Seller all the applicable number of Adjustment Shares.

                  (ii)     For purposes hereof, the "Price Guaranty Average"
shall be equal to the average of the closing price per share of the Shares, as
reported by Bloomberg, for the twenty (20) trading days immediately preceding
the Adjustment Date (the "Price Guaranty Average"); provided, however, that if
the foregoing calculation results in a Price Guaranty Average of less than
US$25.80, the Price Guaranty Average shall be deemed to be US$25.80.

                  (iii)    If on the Adjustment Date, the Price Guaranty Average
is greater than US$43.00, then the parties shall promptly give written notice to
the Adjustment Escrow Agent certifying the calculations thereof, and the
Adjustment Escrow Agent shall deliver to (1) Buyer a number of Shares equal to
the aggregate number of Shares which when valued at the Price Guaranty Average
are equal to fifty percent (50%) of the difference between the Price Guaranty
Average and US$43.00 multiplied by the number of Adjustment Shares, and (2) to
Seller the balance of the Adjustment Shares.

                  (iv)     In the event that all of the outstanding Shares of
Buyer or all or substantially all of its assets are purchased by any Person at
any time prior to the Adjustment Date in a transaction (any such transaction
being referred to as a "Transaction") involving all cash consideration payable
on the effective date of the Transaction, the average price per share utilized
for calculating the Price Guaranty Average shall be the cash value per share
paid in such Transaction and the Adjustment Date shall be accelerated to the
date of the effectiveness of the Transaction. In the event that all of the
outstanding Shares of Buyer or all or substantially all of its assets are
purchased by another Person at any time prior to the Adjustment Date in a
Transaction involving other than all cash consideration, the obligations of
Buyer under this Section 2.3 shall be assumed by the purchaser in such
Transaction with the Seller's rights hereunder to be converted into commensurate
rights to receive securities of the purchaser in such Transaction based upon the
fair market value on the Adjustment Date (which with respect to the
publicly-traded securities shall be determined on the same basis as the Price
Guaranty Average) of the consideration which was received by the Seller in
exchange for the Adjustment Shares on the closing date of such Transaction.

                  (v)      In determining the post-closing adjustment described
in subsection (b) above, the Adjustment Shares and the Exchange Shares and the
mechanics of such adjustment shall be adjusted for stock splits, stock dividends
and recapitalizations subsequent to the Closing Date. Prior to the Adjustment
Date, the Adjustment Shares may not be sold, assigned, transferred, conveyed,
pledged nor used as the basis for any hedging or other derivative transaction
which could serve to reduce the Seller's risk in the Adjustment Shares.
Notwithstanding the escrow of the Adjustment Shares, dividends and other
distributions declared and paid on the Adjustment Shares held in escrow shall
continue to be paid by Buyer to Seller, all voting rights with respect to such
shares shall inure to the benefit of and be enjoyed by Seller, and Seller shall
be the legal and beneficial owner of such Shares for all purposes, except that
the dividends paid in capital stock shall be escrowed pursuant to the Adjustment
Escrow Agreement and Escrow Agreement.

                  (vi)     All costs and expenses, including attorney's fees,
related to or arising from the engagement or services of the Escrow Agent
pursuant to this Section 2.3 shall be paid by Seller.

         2.4      Post Closing Audit; Purchase Price Adjustment. Buyer will
conduct a post-closing audit at its own expense within one hundred and eighty
(180) days of the Closing Date. Buyer shall, at its expense, cause a certified
public accountant to prepare, in accordance with Mexican GAAP, (i) a closing
balance sheet of the Company, on a consolidated basis, as of the Closing Date
(the "Closing Date Balance Sheet") and (ii) calculations of Working Capital,
Debt and Cash Reserves of the Company, on a consolidated basis, as of the
Closing Date and shall deliver such documents to Seller. If, as of the Closing
Date, the aggregate amount of Working Capital is less than Two Hundred Eighty
Four Million Mexican

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<PAGE>

pesos (MP$284,000,000) (such difference, if any, being referred to as the
"Working Capital Deficiency"), or if aggregate amount of Cash Reserves is less
than Ten Million Two Hundred Thirty-One Thousand Six Hundred and Fifty Mexican
pesos (MP$10,231,650) (such difference, if any, being referred to as the "Cash
Deficiency"), then, the aggregate Purchase Price shall be adjusted downward
dollar-for-dollar in the amount of the sum of the Cash Deficiency and the
Working Capital Deficiency. In addition, if the United States denominated Debt
of the Company and the Company Subsidiaries on the Closing Date Balance Sheet is
greater than One Million Two Hundred Fifty Thousand Dollars (US$1,250,000), then
the aggregate Purchase Price shall be adjusted downward dollar for dollar for
each dollar the amount of United States Denominated Debt exceeds such amount. If
the Mexican peso denominated Debt of the Company and the Company Subsidiaries on
the Closing Date Balance Sheet is greater than One Hundred Thirty-Seven Million
One Hundred Ninety-Five Thousand One Hundred Twenty-Five Mexican pesos
(MP$137,195,125), then the aggregate Purchase Price shall be adjusted downward
dollar for dollar for each dollar the amount of Mexican peso denominated Debt
exceeds such amount ("Excessive Mexican Peso Debt"). Seller shall pay Buyer by
wire transfer of immediately available funds an amount equal to these Purchase
Price adjustments. At its option, and at any time or from time to time after the
determination of any such Purchase Price adjustments, Buyer shall be entitled to
recover from the Escrowed Property pursuant to the terms of the Escrow Agreement
all or any portion of such amount not theretofore paid by Seller. For the
purposes of making any dollar adjustments for Working Capital Deficiency, Cash
Deficiency and/or Excessive Mexican Peso Debt, the exchange rate shall be
calculated as of the date of payment.

         2.5      Disputes. Notwithstanding anything in this Article 2 to the
contrary, if Seller disputes any item contained on the Closing Date Balance
Sheet, then Seller shall notify Buyer in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within thirty (30) business days after the delivery of the Closing Date Balance
Sheet. If Buyer and Seller cannot resolve any such dispute, then such dispute
shall be resolved by Pricewaterhouse Coopers LLP, or such other "big five"
accounting firm which is reasonably acceptable to the Buyer and Seller (the
"Independent Accounting Firm") considering ongoing and future engagements. The
determination of the Independent Accounting Firm shall be made as promptly as
practicable and shall be final and binding on the parties, absent manifest error
which error may only be corrected by such Independent Accounting Firm. Any
expenses relating to the engagement of the Independent Accounting Firm shall be
allocated between Buyer and Seller so that Seller's aggregate share of such
costs shall bear the same proportion to the total costs that the Disputed
Amounts unsuccessfully contested by Seller (as finally determined by the
Independent Accounting Firm) bear to the total of the Disputed Amounts so
submitted to the Independent Account Firm. Pending resolution of any such
dispute by the Independent Accounting Firm, no such Disputed Amount shall be due
to Buyer. Once any such Disputed Amount is finally determined to be due to
Buyer, Buyer may proceed to recover such amount in the manner set forth in
Section 2.4.

                                    ARTICLE 3

                     REPRESENTATIONS AND WARRANTIES OF BUYER

         In order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer makes the representations
and warranties set forth below to Seller.

         3.1      Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Buyer is
duly qualified to do business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification necessary, except for failures
to be so qualified and in good standing that would not, individually or in the
aggregate, have a Buyer Material Adverse Effect.

         3.2      Authorization; Enforceability. Buyer has all requisite right,
power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action. This Agreement and all other agreements to be executed and
delivered by Buyer in connection with this Agreement have been or will be duly
executed and delivered by Buyer, and constitute or, upon execution, will
constitute, the legal, valid and binding obligation of Buyer, enforceable in
accordance with their terms, except to the extent that their enforcement is
limited by bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditors' rights generally and by general
principles of equity.

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<PAGE>

         3.3      No Violation or Conflict. The execution, delivery and
performance of this Agreement and all other agreements to be executed and
delivered by Buyer in connection with this Agreement and the consummation by
Buyer of the transactions contemplated hereby: (a) do not and will not violate
or conflict with any provision of Law or any provision of Buyer's Articles of
Incorporation or Bylaws; and (b) do not and will not, with or without the
passage of time or the giving of notice, result in the breach of, or constitute
a default, cause the acceleration of performance, or require any consent under,
or result in the creation of any Lien upon any property or assets of Buyer
pursuant to any material instrument or agreement to which Buyer is a party or by
which Buyer or its properties may be bound or affected, other than instruments
or agreements as to which consent shall have been obtained at or prior to the
Closing.

         3.4      Registration Statement. The Shares to be delivered under this
Agreement will be issued pursuant to Buyer's Registration Statement on Form S-4,
Reg. No. 33-60847 (the "Registration Statement"). Buyer has delivered to Seller
a copy of the prospectus, dated January 19, 2000, included in the Registration
Statement, and has made available to Seller a true and complete copy of all
documents incorporated by reference therein. As of the respective dates they
were filed with the SEC, none of such documents (including the Registration
Statement) contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Buyer has filed, and will timely file, all requisite
amendments to the Registration Statement, and all documents required to be
incorporated therein, which may be required through the Closing Date and will
promptly provide Seller with a copy of any such amendments.

         3.5      Validity of Shares; Listing. When issued and delivered in
accordance with this Agreement, the Shares to be delivered under this Agreement
shall (a) be duly and validly authorized, issued and outstanding, (b) be fully
paid and non-assessable, (c) be transferable in accordance with Rule 145 or any
other available exemption from registration, (d) be free and clear of any Liens,
including, claims or rights under any voting trust agreements, shareholder
agreements or other agreements, (d) be registered under the Securities Act and
listed for trading on the AMEX, and (e) not have been issued in violation of the
preemptive rights of any Person.

         3.6      SEC Documents.

         (a)      Buyer has filed with the SEC all reports, schedules, forms,
statements and other documents required to be so filed by it since January 1,
1998 under the Securities Act or the Exchange Act including (i) annual reports
on Form 10-K for all fiscal years ending during such period, (ii) quarterly
reports on Form 10-Q for all fiscal quarters during such period, (iii) its proxy
or information statements relating to meetings of, or actions taken without a
meeting by, the shareholders of Buyer held during such period, and (iv) all of
its other reports, statements, schedules and registration statements, including
current reports on Form 8-K, filed by Buyer or required to be filed by Buyer
with the SEC during such period (collectively, the "SEC Documents").

         (b)      As of its respective date, or if amended as of the date of the
last such amendment, each SEC Document, including any financial statements or
schedules included therein (i) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (ii) complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as the case may be, and the applicable rules and regulations promulgated by
the SEC thereunder. None of Buyer's subsidiaries has any class of securities
registered under the Exchange Act.

         3.7      Brokers. Buyer has not employed any financial advisor, broker
or finder and has not incurred and will not incur any broker's, finder's,
investment banking or similar fees, commissions or expenses, in connection with
the transactions contemplated by this Agreement.

                                    ARTICLE 4

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         In order to induce Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Seller makes the representations and
warranties set forth below to Buyer.

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<PAGE>

         4.1      Organization. Each of Seller, the Company and each Company
Subsidiary has been duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, as the
case may be. Each of Seller, the Company and each Company Subsidiary is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Company
Material Adverse Effect. Each of Seller, the Company and each Company Subsidiary
has all requisite right, power and authority to own or lease and operate its
properties and conduct its business as presently conducted.

         4.2      Authorization; Enforceability. Seller, Company, each Company
Subsidiary and their respective Affiliates have all requisite right, power and
authority to execute, deliver and perform this Agreement and all agreements
contemplated hereby or in connection herewith. The execution, delivery and
performance of this Agreement and all agreements contemplated hereby or in
connection herewith by Seller, Company, each Company Subsidiary and their
respective Affiliates and the consummation by them of the transactions
contemplated hereby and in connection herewith have been duly authorized by all
requisite corporate action. This Agreement and all other agreements to be
executed and delivered by Seller, the Company, the Company Subsidiaries and
their respective Affiliates at or prior to the Closing in connection with (or in
contemplation of) this Agreement have been or will be duly executed and
delivered and constitute or, upon execution, will constitute, the legal, valid
and binding obligations of them, enforceable in accordance with their respective
terms, except to the extent that their enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.

         4.3      No Violation or Conflict. The execution, delivery and
performance of this Agreement and the agreements contemplated hereby or in
connection herewith by Seller, the Company, the Company Subsidiaries and their
respective Affiliates and the consummation by them of the transactions
contemplated hereby or in connection herewith: (a) do not and will not violate
or conflict with any provision of Law or any provision of their respective
Articles of Association or other corporate or equivalent organizational
documents; and (b) do not and will not, with or without the passage of time or
the giving of notice, result in the breach of, or constitute a default, cause
the acceleration of performance or require any consent or notice under, or
result in the creation of any Lien upon any property or assets of Seller,
Company or any Company Subsidiary pursuant to any material instrument or
agreement to which Seller, the Company or any Company Subsidiary is a party or
by which Seller, the Company or any Company Subsidiary or their respective
properties may be bound or affected, other than instruments or agreements as to
which consent shall have been obtained at or prior to the Closing, each of which
instruments or agreements is listed on Schedule 4.3 hereto.

         4.4      Consent of Governmental Authorities. Except as may be required
by the Mexican Federal Economic Competition Law or the Mexican Foreign
Investment Law, no consent, approval or authorization of, or registration,
qualification or filing with any domestic or foreign federal, state or local
governmental or regulatory authority is required to be made by Seller, the
Company, any Company Subsidiary or any of their respective Affiliates in
connection with the execution, delivery or performance of this Agreement by the
Seller or the consummation by Seller, Company, the Company Subsidiaries and
their Affiliates of the transactions contemplated hereby or in connection
herewith.

         4.5      Brokers. Except for Violy, Byorum & Partners Holdings, LLC,
whose fees are to be paid by Seller, none of the Company, the Company
Subsidiaries and/or Seller has employed any financial advisor, broker or finder.
The Company, the Company Subsidiaries and Seller have not incurred and will not
incur any broker's, finder's, investment banking or similar fees, commissions or
expenses in connection with the transactions contemplated by or in connection
with this Agreement, which would be payable by Buyer, Company or any Company
Subsidiary.

         4.6      Organizational Documents and Corporate Records. A true and
complete copy of (a) the Articles of Association of Seller, the Company and the
Company Subsidiaries, as amended, (b) all other corporate organizational
documents of Seller, the Company and the Company Subsidiaries, and (c) the
minute books of the Company and each Company Subsidiary have been delivered to
Buyer or will be retained by the Company at the Closing. Such minute books
contain complete and accurate records of all meetings and other corporate
actions of the board of directors, committees of the board of directors, the
supervisory board, incorporators and shareholders of each of the Company and the
Company Subsidiaries since January 1, 1998 to the date hereof or since the date
of incorporation if the same are reasonably material.

                                       8
<PAGE>

         4.7      Capitalization. The authorized share capital of the Company is
as set forth on Schedule 4.7. The authorized share capital of the Company
Subsidiaries is as set forth on Schedule 4.7 ("Company Subsidiary Securities").
Schedule 4.7 sets forth all Securities and Company Subsidiary Securities which
are issued and outstanding, all of which have been duly authorized, are validly
issued and are fully paid and nonassessable. All outstanding Securities and
Company Subsidiary Securities are owned by Seller or the Company or another
Company Subsidiary, free and clear of all Liens, rights of first refusal
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, shareholders' agreement, charges and other encumbrances of any
nature whatsoever, except as set forth on Schedule 4.7. Schedule 4.7 lists all
Company Subsidiaries, their jurisdiction of incorporation or organization, and
the record and beneficial owners and the amounts and percentage of ownership of
such shares of capital stock or equity interests. Except as set forth on
Schedule 4.7, neither the Company nor any Company Subsidiary has any investment
or equity interest in any other Person. None of the Securities or Company
Subsidiary Securities was issued in violation of any Law, preemptive right or
agreement. At the Closing, Buyer or its designee(s) will acquire good and valid
title to the Securities and all of the legal and beneficial interest in the
Company Subsidiary Securities, free and clear of all Liens. No written or oral
agreement or understanding with respect to the disposition of the Securities or
any rights therein, other than this Agreement, exists. Except as set forth on
Schedule 4.7, Seller has full right, power and authority to transfer the
Securities. Neither the Seller, the Buyer, the Company nor any Company
Subsidiary has, or shall or may have, any liability or obligation of any nature
whatsoever under or in connection with any change in ownership of any of them
occurring prior to the Closing. Neither the Company nor any Company Subsidiary
has, or shall or may have, any liability or obligation of any nature whatsoever
to any former shareholder.

         4.8      Rights, Warrants, Options. There are no warrants or similar
rights to which the Company or any Company Subsidiary is a party or by which the
Company or any Company Subsidiary is bound relating to the issued or unissued
capital stock of the Company or any Company Subsidiary or obligating the Company
or any Company Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Company Subsidiary. There are no
outstanding obligations of the Company or any Company Subsidiary to redeem or
otherwise acquire any of the Securities or Company Subsidiary Securities. There
are no outstanding contractual obligations of the Company or any Company
Subsidiary to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any Company Subsidiary or any other
Person, other than Guarantees by the Company of any indebtedness of any Company
Subsidiary.

         4.9      Financial Statements. Seller has previously delivered to Buyer
a true and complete copy of the consolidated balance sheet of the Company
Subsidiaries for the fiscal years ended on December 31, 1999 and 1998, and the
consolidated profit and loss statement for the fiscal years ended on December
31, 1999 and 1998, including any related notes and the consolidated supplement,
certified by the Company Subsidiaries' independent certified public accountants
pursuant to their audit of the financial records of the Company Subsidiaries and
will deliver the consolidated balance sheet of the Company Subsidiaries as of
the Closing Date, and the consolidated profit and loss statement of the Company
Subsidiaries for the period ending on that date, certified by the Company's
chief financial officer (collectively the "Financial Statements"). The Financial
Statements: (a) have in all material respects been prepared in accordance with
the books of account and records of the Company Subsidiaries; (b) fairly
present, and are true, correct and complete statements in all material respects
of the consolidated financial condition of the Company Subsidiaries and the
results of their operations at the dates and for the periods specified in those
statements; and (c) have been prepared in accordance with Mexican GAAP,
consistently applied with prior periods (subject, in the case of the unaudited
statements, to the absence of notes).

         4.10     Absence of Undisclosed Liabilities. Neither the Company nor
any of the Company Subsidiaries has or will have on the Closing Date (a) any
liabilities, commitments or obligations or any nature whatsoever, whether
accrued, absolute, contingent or otherwise that would be required to be
reflected on a balance sheet or in notes thereto prepared in accordance with
Mexican GAAP; or (b) any material unrealized or anticipated losses from any
commitments of the Company or any Company Subsidiary, except (i) for the items
set forth on Schedule 4.10, (ii) for nonmaterial liabilities, commitments or
obligations (including, without limitation, liabilities for Taxes) incurred in
the ordinary course of business consistent with past practices since the date of
the Financial Statements, and (iii) as disclosed by the Financial Statements
dated June 30, 2000. To Seller's Knowledge, there is no basis for assertion
against the Company or any Company Subsidiary of any such liability, commitment,
obligation or loss. Neither the Company nor any Company

                                       9
<PAGE>

Subsidiary has incurred any Tax liability in connection with the transactions
contemplated hereby or in connection herewith which are not disclosed in such
Financial Statements.

         4.11     No Operations. Since its incorporation, the Company has not
engaged in any operations, owned, leased, bought or sold any assets, incurred
any liabilities which are outstanding as of the date hereof, entered into any
agreements or otherwise engaged in any business activities, except in connection
with its acquisition of the capital stock of Fustery. Seller has provided Buyer
with a true and complete copy of the Company's acquisition agreement with
respect to the securities of Fustery, under which the Company and the Company
Subsidiaries have absolutely no liability or obligations of any nature
whatsoever which shall survive the Closing.

         4.12     Compliance with Laws. Each of the Company and the Company
Subsidiaries (and each Person for whose conduct any of them may be liable) is in
compliance with all Laws applicable to it or its properties, including without
limitation those relating to (a) the development, testing, manufacture,
packaging, labeling, distribution and marketing of products or the provision of
services and (b) employment, safety and health. Neither the Seller, the Company,
any of the Company Subsidiaries nor any of their respective Affiliates has
received any written notification from any governmental or regulatory authority
asserting that the Company or any Company Subsidiary (or any Person for whose
conduct it may be liable) is not in material compliance with or has violated any
of the Laws which such governmental or regulatory authority enforces, or
threatening to revoke any material authorization, consent, approval, franchise,
license, or permit, and neither the Company nor any of the Company Subsidiaries
is subject to any material agreement or consent decree with any governmental or
regulatory authority arising out of previously asserted violations.

         4.13     Legal Proceedings. Except as set forth in Schedule 4.13, (a)
neither Seller, the Company nor any of the Company Subsidiaries is a party to
any pending or, to Seller's Knowledge, threatened, legal, administrative or
other proceeding, arbitration or investigation, (b) no Affiliate of Seller is a
party to any pending, or, to Seller's Knowledge, threatened, legal,
administrative or other proceeding, arbitration or investigation relating to the
Company or any Company Subsidiary and (c) no Person who is or was a director or
officer of the Company or any Company Subsidiary is a party to any pending or,
to Seller's Knowledge, threatened, legal, administrative or other proceeding,
arbitration or investigation in their capacity as directors or officers of the
Company or such Company Subsidiary. Neither Seller, the Company nor any of the
Company Subsidiaries is subject to any order, writ, injunction, decree or other
judgment of any court or governmental or regulatory authority and no Affiliate
of any of them is subject to any order, writ, injunction, decree or other
judgment of any court or governmental or regulatory authority relating to
Seller, Company or any Company Subsidiary. There are no suits or proceedings
pending or threatened before any court or by or before any governmental or
regulatory authority, commission, bureau or agency or public regulatory body
which, if adversely determined, would interfere with Seller's or any of its
Affiliates' ability to consummate the transactions contemplated hereby or in
connection herewith.

         4.14     Absence of Material Adverse Effects. Except as disclosed in
Schedule 4.14, since December 31, 1999, each of the Company and the Company
Subsidiaries has conducted its businesses only in the ordinary and usual course
and in a manner consistent with past practices and, since such date: (a) there
has been no Company Material Adverse Effect; and (b) except as set forth in
Schedule 4.14, neither the Company nor any Company Subsidiary has engaged or
agreed to engage in any of the actions described in Section 5.1(b)(i)-(xxiii).

         4.15     Properties.

         (a)      Except as set forth on Schedule 4.15(a), the Company or one of
the Company Subsidiaries has good and valid title to all assets reflected as
owned by the Company or one or more of the Company Subsidiaries in the
consolidated balance sheet of the Company Subsidiaries dated as of the Closing
Date and good and valid title or leasehold interest in all other assets used in
their business (except assets sold or otherwise disposed of since December 31,
1999, in the ordinary course of business to Persons other than any Affiliates of
the Company), free and clear of all Liens, including, but not limited to, the
real estate in Mexico City and Ramos Arizpe on which the offices and
manufacturing facilities of the Company Subsidiaries are located (the "Owned
Real Estate").

                                       10
<PAGE>

         (b)      Except as set forth in Schedule 4.15(b), all of the immovable
buildings, structures, appurtenances, leasehold improvements, equipment,
machinery, rolling stock and other tangible properties of the Company and the
Company Subsidiaries reflected in the consolidated balance sheets of the Company
Subsidiaries dated as of the Closing Date and the Owned Real Estate are, taken
as a whole: (a) in reasonable operating condition and repair, ordinary wear and
tear excepted, (b) not in need of substantial maintenance or repairs (except for
ordinary or routine maintenance or repairs), and (c) free of structural or
non-structural defects to the buildings on such properties and all of such
buildings have access to adequate water, sewer, gas, telephone and electric
utilities, which are in good working order; in each instance as is sufficient to
conduct the business of the Company and the Company Subsidiaries as currently
conducted.

         (c)      Except as set forth in Schedule 4.15(c), the Company or one of
the Company Subsidiaries owns or possesses adequate licenses or other legal
rights to use the Intellectual Property, which is material to the Company or any
Company Subsidiary and used or held for use in connection with the business of
the Company and the Company Subsidiaries. The Intellectual Property is owned or
possessed free and clear of all Liens, except for such Liens which would not,
individually or in the aggregate, materially impair the use or market value of
the Intellectual Property. No claims have been made, or to Seller's Knowledge,
threatened (i) asserting the invalidity, abuse, misuse, or unenforceability, or
seeking the cancellation, of any of the Intellectual Property of the Company or
any Company Subsidiary, or (ii) asserting that the Company's or any Company
Subsidiary's ownership or use of the Intellectual Property infringes or violates
the rights of any other Person. To Seller's Knowledge, the conduct of the
business of the Company and the Company Subsidiaries as conducted and as
currently conducted or as contemplated to be conducted did not and does not
infringe in any way any Intellectual Property of any third party. Furthermore,
to Seller's Knowledge, there are no infringements of any Intellectual Property
owned by or licensed by or to the Company or any Company Subsidiary.

         4.16     Governmental Authorizations. The Company and the Company
Subsidiaries have all authorizations, consents, approvals, franchises, licenses
and permits required under applicable Law for the ownership of the Company's and
the Company Subsidiaries' properties and operation of their businesses as
presently operated (the "Permits"). No suspension or cancellation of any of the
Permits is pending or threatened, and to Seller's Knowledge, there is no
reasonable basis therefor. Neither the Company nor any Company Subsidiary is in
conflict with, or in default or violation of any Permits.

         4.17     Employment Matters.

         (a)      Except as set forth on Schedule 4.17(a), there are no
employment, consulting, severance or indemnification arrangements, arrangements
which contain change of control provisions, agreements, or understandings
between the Company or any Company Subsidiary and any officer, director,
consultant or employee. Schedule 4.17(a) contains the names, job descriptions
and annual salary rates and other compensation of all officers, directors and
consultants of the Company and the Company Subsidiaries (including compensation
paid or payable by the Company or any Company Subsidiary under the Plans (as
hereafter defined)), and a list of all employee policies (written or otherwise),
employee manuals or other written statements of rules or policies concerning
employment, including working conditions, vacation and sick leave, a complete
copy of each of which (or a description, if unwritten) has been delivered to
Buyer.

         (b)      The Company and each of the Company Subsidiaries has complied
with all applicable employment Laws, including payroll and related obligations,
benefits, Social Security, Housing Fund and Retirement Savings Fund, and does
not have any obligation in respect of any amount due to employees of the Company
or the Company Subsidiaries or government agencies, other than normal salary,
other fringe benefits and contributions accrued but not payable on the date
hereof.

         (c)      Schedule 4.17(c) sets forth a complete list of all material
pension, retirement, stock purchase, stock bonus, stock ownership, stock option,
profit sharing, savings, medical, disability, hospitalization, insurance,
deferred compensation, bonus, incentive, welfare or any other material employee
benefit plan, policy, agreement, commitment, arrangement or practice currently
or previously maintained by the Company or the Company Subsidiaries for any of
their directors, officers, consultants, employees or former employees (the
"Plans") since January 1, 1995; and neither the Company nor any Company
Subsidiary has or may have any liability under any other Plan which existed on
or prior to such date. None of the Plans are subject to United States Law.

                                       11
<PAGE>

         (d)      Without limiting the generality of Section 4.12, each Plan has
been administered in all material respects in accordance with its terms and
applicable Law. Except as set forth in Schedule 4.17(d), with respect to the
Plans, (i) no event has occurred and there exists no condition, facts or
circumstances, which could give rise to any liability of the Company or any
Company Subsidiary under the terms of such Plans or any applicable Law, (ii) the
Company or a Company Subsidiary has paid or accrued in accordance with normal
accounting practices all amounts required under applicable Law and any Plan to
be paid as a contribution to each Plan through the date hereof, (iii) the
Company or a Company Subsidiary has set aside adequate reserves in their
accounting records for seniority payments (prima de antiguedad), as provided by
Mexican Law, for which funding in a separate account has not been made, and (iv)
each Plan required to be registered has been registered and has been maintained
in good standing with applicable regulatory authorities.

         (e)      On or after the date hereof, no Plan has been, (i) terminated,
(ii) amended in any manner which would directly or indirectly increase the
benefits accrued, or which may be accrued, by any participant thereunder or
(iii) amended in any manner which would materially increase the cost to the
Company, any Company Subsidiary or Buyer of maintaining such Plan. Except as
identified on Schedule 4.17(e), no Plan provides retiree medical or retiree
insurance benefits to any Person. Except as disclosed or noted in the Financial
Statements dated December 31, 1999 or except as set forth in Schedule 4.17(e),
there are no material amounts due or owing to any employee of the Company or any
Company Subsidiary for any accrued salary, remuneration, compensation and/or
benefit, including, without limitation, amounts due for accrued vacation, sick
leave or commissions.

         4.18     Company Agreements. Schedule 4.18 sets forth a list (all such
contracts, agreements, arrangements or commitments as are required to be set
forth on Schedule 4.18 being referred to herein collectively as the "Company
Contracts") of all of the following written and oral agreements, arrangements or
commitments to which either the Company or any Company Subsidiary is a party
(excluding those which are no longer in effect and for which neither the Company
nor any Company Subsidiary has any liability) or by which either of them or any
of their respective assets is bound or affected:

         (a)      each partnership, joint venture or similar agreement of the
Company or any of the Company Subsidiaries with another Person.

         (b)      each contract or agreement under which the Company or the
Company Subsidiaries have created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) any indebtedness in any amount or under
which the Company or the Company Subsidiaries have imposed (or may impose) a
Lien on any of their respective assets, whether tangible or intangible securing
indebtedness;

         (c)      each contract or agreement which involves an aggregate payment
or commitment per contract or agreement on the part of the Company or any of the
Company Subsidiaries of more than US$25,000 per year, which is not terminable
upon 30 days notice by the Company or any of the Company Subsidiaries without
penalty or other adverse consequence, or which is otherwise material;

         (d)      each contract or agreement which involves or contributes to
the Company or the Company Subsidiaries, aggregate annual remuneration which
exceeds 5% of the Company's and the Company Subsidiaries' consolidated annual
net revenues for the twelve months ended December 31, 1999;

         (e)      all leases and subleases from any third Person to the Company
or any of the Company Subsidiaries, in each case requiring annual lease payments
from the Company or any Company Subsidiary in excess of US$25,000;

         (f)      each contract or agreement to which the Company or any of the
Company Subsidiaries or any of their Affiliates is a party limiting, in any
material respect, the right of the Company or any of the Company Subsidiaries
(i) to engage in, or to compete with any person in, any business, including each
contract or agreement containing exclusivity provisions restricting the
geographical area in which, or the method by which, any business may be
conducted by the Company or any of the Company Subsidiaries or (ii) to solicit
any customer or client;

                                       12
<PAGE>

         (g)      fire, casualty, liability, title, worker's compensation and
other insurance policies and binders maintained by the Company or any of the
Company Subsidiaries;

         (h)      all collective bargaining or other labor union contracts or
agreements to which the Company or any of the Company Subsidiaries is a party or
applicable to persons employed by the Company or any Company Subsidiary; and/or

         (i)      All licenses, licensing agreements and other agreements
providing in whole or in part for the use of any Intellectual Property of the
Company or any Company Subsidiary.

         Schedule 4.18 further identifies each of the Company Contracts which
contains anti-assignment, change of control or notice of assignment provisions.
The Company Contracts are each in full force and effect and are the valid and
legally binding obligations of the Company or the applicable Company Subsidiary
which is a party thereto and, to Seller's Knowledge, are valid and binding
obligations of the other parties thereto, except to the extent that the
enforcement of such Company Contracts shall be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.
Each contract relating to the transfer of any Securities or any Company
Subsidiary Securities has been delivered to Buyer, was duly executed by the
parties thereto, is accurate and complete and will not be amended, modified or
terminated. Neither the Company nor any Company Subsidiary is in default under
any Company Contract to which it is a party, and no event has occurred which
with the giving of notice or lapse of time or both would constitute such a
default, which such default, individually or together with all other under any
Company Contract, could be reasonably expected to have a Company Material
Adverse Effect.

         4.19     Significant Customers. Since December 31, 1999, no Significant
Customer (as defined below) of the Company or any Company Subsidiary has (a)
canceled, suspended or otherwise terminated its written contractual relationship
with the Company or any Company Subsidiary, or (b) advised Seller, the Company
or any Company Subsidiary of its intention to cancel, suspend or terminate its
relationship or to materially decrease its purchases from the Company or any
Company Subsidiary or to materially and adversely change the terms upon which it
purchases products from the Company or any Company Subsidiary, and, to Seller's
knowledge, none of its Affiliates has been advised thereof. Except as indicated
on Schedule 4.19, all supplies and services necessary for the conduct of the
Company's and the Company Subsidiaries' business as presently conducted are
reasonably readily obtainable by the Company or the Company Subsidiaries from
alternate sources on reasonably comparable terms and conditions as those
presently available to the Company or the Company Subsidiaries. Except as
disclosed in Schedule 4.19, at no time during the last two years prior to the
date hereof have the sales, manufacturing or other business operations of the
Company and the Company Subsidiaries taken as a whole been materially and
adversely affected by shortages or availability of products or raw materials
necessary to sell or manufacture the products presently sold by the Company or
the Company Subsidiaries. For purposes of this Section 4.19, "Significant
Customers" shall mean customers whose actual purchases for the year ended
December 31, 1999 total US$500,000 (each such customer referred to as a
"Significant Customer") of the Company and the Company Subsidiaries taken as a
whole, during each of (i) the fiscal year ended December 31, 1999 and (ii) as
annualized based on the nine (9) months which ended September 30, 2000.

         4.20     Tax Matters.

         (a)      All Tax returns and other similar documents required to be
filed with respect to the Company and/or any Company Subsidiary (and/or any of
their former owners and/or Affiliates to the extent the same could adversely
affect the Company or any Company Subsidiary or Buyer) have been timely filed
with the appropriate governmental authorities in all jurisdictions in which such
returns and documents are required to be filed, all of the foregoing as filed
are true, correct and complete in all material respects and reflect accurately
all material liabilities for Taxes of the Company and the Company Subsidiaries
(and/or any of their former owners and/or Affiliates to the extent the same
could adversely affect the Company or any Company Subsidiary or Buyer) for the
periods to which such returns and documents relate, and all amounts shown as
owing thereon have been paid or, as set forth on Schedule 4.20, are being
contested in accordance with all applicable legal requirements. Buyer
acknowledges that the external auditors for the Company and the Company
Subsidiaries (and their former owners to the extent the same would adversely
affect the Company or any Company

                                       13
<PAGE>

Subsidiary or Buyer) have certified that their tax provisions included in their
annual financial statements are in compliance with Mexican Law.

         (b)      All material Taxes, if any, collectible or payable by the
Company and/or any Company Subsidiary (and/or any of their former owners and/or
Affiliates to the extent the same could adversely affect the Company or any
Company Subsidiary or Buyer) or relating to or chargeable against any of their
assets, revenues or income through June 30, 2000 were fully collected and paid
by such date or provided for by adequate reserves in the Company Subsidiaries'
consolidated financial statements dated as June 30, 2000 and all material
similar items due through the Closing Date will have been fully paid by that
date or provided for by adequate reserves in the Company's financial statements
dated as of the Closing Date.

         (c)      No material claims or deficiencies have been asserted against
the Company or any Company Subsidiary (and/or any of their former owners and/or
Affiliates to the extent the same could adversely affect the Company or any
Company Subsidiary or Buyer) with respect to any Taxes which have not been paid
or otherwise satisfied or for which accruals or reserves have not been made in
the Company Subsidiaries' June 30, 2000 financial statements, and, there exists
no reasonable basis for the making of any such claims, whether in connection
herewith or otherwise. Any material claims or deficiencies that are asserted
between June 30, 2000 and the Closing Date with respect to any Taxes will be
paid, otherwise satisfied, accrued or reserved in the financial statements as of
the Closing Date. Neither the Company nor any of the Company Subsidiaries (nor
any of their former owners and/or Affiliates to the extent the same could
adversely affect the Company or any Company Subsidiary or Buyer) have waived any
restrictions on assessment or collection of material Taxes or consented to the
extension of any statute of limitations relating to taxation.

         (d)      Neither Seller, its shareholders, the Company nor any Company
Subsidiary has incurred or will incur any liability, contingent or otherwise,
relating to Taxes or otherwise, in connection with the transactions contemplated
in connection herewith or in contemplation hereof or any acquisition by Company
or any of the Company Subsidiaries or any other change in ownership thereof.

         4.21     Related Parties. Except as set forth on Schedule 4.21, neither
Seller, the Company, the Company Subsidiary, any of their respective Affiliates,
to Seller's Knowledge after due inquiry, their current executive officers listed
on Schedule 4.21 hereto, nor their members of the Board of Directors: (a) own,
directly or indirectly, any significant interest in, or is a director, officer,
employee, consultant or agent of, any Person which is a competitor, supplier or
customer of the Company or any of the Company Subsidiaries; (b) own, directly or
indirectly, in whole or in part, any property, asset or right, real, personal or
mixed, tangible or intangible that is material to and used in the business,
financial condition, prospects or results of operations of the Company and the
Company Subsidiaries taken as a whole; or (c) has an interest in or is, directly
or indirectly, a party to any Company Contract, except for employment,
consulting or other personal service agreements which are listed on Schedule
4.17(a) hereto.

         4.22     Insurance. Set forth on Schedule 4.22 is a list of all
insurance policies providing insurance coverage of any nature to the Company or
any Company Subsidiary. Such policies are sufficient for the compliance by the
Company and each of its Subsidiaries with all requirements of Law and all
Company Contracts in light of its current business and consistent with similarly
situated companies. All of such policies are (i) in full force and effect and
are valid and enforceable in accordance with their terms, and (ii) to Seller's
Knowledge, enforceable against the insurer thereunder, in accordance with their
terms. The Company and each of the Company Subsidiaries has complied with all
material terms and conditions of such policies, including the payment of premium
payments. To Seller's Knowledge, none of the insurance carriers has given any
written notice to cancel or not to renew any such policies. To Seller's
Knowledge, neither Company nor any Company Subsidiaries has any claim pending or
anticipated against any of the insurance carriers under any of such policies and
there has been no actual or alleged occurrence of any kind which may give rise
to any such claim.

         4.23     Labor Relations. There is no strike or dispute pending or, to
Seller's Knowledge, threatened involving any employees of the Company or any
Company Subsidiary. None of the employees of the Company or any Company

                                       14
<PAGE>

Subsidiary is a member of any labor union (except as set forth in Schedule
4.23), and neither the Company nor any Company Subsidiary is a party to,
otherwise bound by, or, to Seller's Knowledge, threatened with any labor or
collective bargaining agreement (except as set forth in Schedule 4.23). To
Seller's Knowledge, none of the employees of the Company or any Company
Subsidiary are engaged in organizing any labor union or other employee group
that is seeking recognition as a bargaining unit. Without limiting the
generality of Section 4.12, (a) no unfair labor practice complaints are pending
or, to Seller's Knowledge, threatened against the Company or any Company
Subsidiary, and (b) no Person has made any claim, and there is no basis for any
claim, against the Company or any Company Subsidiary under any statute,
regulation or ordinance relating to employees or employment practices, including
without limitation those relating to age, sex and racial discrimination,
conditions of employment, and wages and hours.

         4.24     Absence of Certain Business Practices. Neither the Company nor
any Company Subsidiary nor any director, officer, agent, employee or other
Person for whom the Company or any Company Subsidiary may be responsible nor any
Person acting on behalf of the Company or any Company Subsidiary, has used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures. Neither the Company nor any
Company Subsidiary nor any current director, officer, agent, employee or other
Person for whom the Company or any Company Subsidiary may be responsible nor any
Person acting on behalf of the Company or any Company Subsidiary has accepted or
received any unlawful contributions, payments gifts or expenditures.

         4.25     Pharmaceutical Products.

         (a)      Schedule 4.25(a) lists each product currently developed,
manufactured, licensed, distributed or sold by the Company or any Company
Subsidiary (collectively, the "Products"). Each Product manufactured by the
Company or any Company Subsidiary has been manufactured in accordance with (i)
the product registration applicable to such Product, and (ii) the specifications
under which the Product is normally and has normally been manufactured.

         (b)      Schedule 4.25(b) lists all product registrations which are
pending or maintained by the Company or any Company Subsidiary, and with respect
to pending product registrations, the phase of clinical development of the
Products which are the subject thereof. A true and complete copy of each such
product registration has been previously delivered to Buyer.

         (c)      Schedule 4.25(c) lists all (i) Products which at any time have
been recalled, withdrawn or suspended by the Company or any Company Subsidiary,
since January 1, 1998, whether voluntarily or otherwise, (ii) without limiting
the generality of Section 4.12, completed or pending proceedings, since January
1, 1998, seeking the recall, withdrawal, suspension or seizure of any Product,
and (iii) regulatory letters, warning letters, and letters of adverse findings
from governmental authorities received, since January 1, 1998, by the Company,
any Company Subsidiary or, to the Seller's Knowledge, their respective
attorneys, copies of which have previously been delivered to Buyer.

         (d)      Except as set forth on Schedule 4.25(d), to Seller's
Knowledge, there exist no set of facts, as the business of the Company or the
Company Subsidiaries is currently conducted: (i) which could reasonably be
expected to furnish a basis for the recall, withdrawal or suspension of any
Product registration, Product license, manufacturing license, wholesale dealers
license, export license or other license, approval or consent of any currently
applicable domestic or foreign governmental or regulatory authority with respect
to the Company, any Company Subsidiary, or any of the Products; (ii) which could
reasonably be expected to furnish a basis for the recall, withdrawal or
suspension of any Product from the market, the termination or suspension of any
clinical testing of any Product, or the change in marketing classification of
any Product; or (iii) which could reasonably be expected to have a Company
Material Adverse Effect in connection with the continued operation of any
facility of the Company or any Company Subsidiary.

         (e)      Except as set forth in Schedule 4.25(e), all Products which
have been sold through the Company or the Company Subsidiaries have been
merchantable and free from defects in material or workmanship for the term of
any applicable warranties and under the conditions of any express or implied
specifications and warranties arising under Law. Except as disclosed in Schedule
4.25(e) hereto, during the last two years, none of the Company or any of the
Company Subsidiaries have received any claims based on alleged failure to meet
the specifications or breach of product warranty arising from any applicable
manufacture or sale of their Products.

                                       15
<PAGE>

         4.26     Compliance with Environmental Laws. Except as set forth in
Schedule 4.26, each of the Company and the Company Subsidiaries is in compliance
with all applicable Environmental Laws. Except as indicated in Schedule 4.26,
(a) there have been no governmental claims, citations, notices of violation,
judgements, decrees or orders received by Seller (with respect to the Company or
any Company Subsidiary), the Company or any of the Company Subsidiaries, or to
Seller's Knowledge, any of their Affiliates, for impairment or damage, injury or
adverse effect to the environment or public health relating to environmental
matters, and there have been no proceedings initiated by non-governmental
parties with respect to any such matters, (b) there is no condition relating to
any properties of the Company or any of the Company Subsidiaries that would
require any type of remediation, clean-up, response or other action under
applicable Environmental Laws, and (c) the Company and each of the Company
Subsidiaries has complied with all applicable Environmental Laws in the
generation, treatment, storage and disposal of toxic and hazardous substances,
as defined under any applicable Environmental Laws.

         4.27     Inventories. Except as set forth on Schedule 4.27, the
Inventories of the Company and the Company Subsidiaries shown on the balance
sheets included in the Financial Statements and the Inventories of the Company
and each of the Company Subsidiaries as of the Closing Date are stated and will
be stated on a last cost basis in accordance with Mexican GAAP, are fit for
their particular use, do not and will not include any items below standard
quality, defective, damaged or spoiled, obsolete or of a quality or quantity not
usable or salable in the ordinary course of the business of the Company and the
Company Subsidiaries as currently conducted or any items whose expiration date
has passed or will pass within six (6) months of the date hereof and of Closing
(which, with respect to items which do not have an expiration date, shall in any
event not include quantities of items not usable or salable within three (3)
months from the date hereof), the value of which has not been fully written down
or reserved against in the Financial Statements.

         4.28     [Intentionally Omitted]

         4.29     List of Accounts. Set forth on Schedule 4.29 is: (a) the name
and address of each bank or other institution in which the Company and the
Company Subsidiaries maintains an account (cash, securities or other) or safe
deposit box; (b) the name and phone number of and Company's and the Company
Subsidiaries' contact person at such bank or institution; (c) the account number
of the relevant account and a description of the type of account; and (d) the
persons authorized to transact business in such accounts.

         4.30     Disclosure. No representation or warranty by Seller contained
in this Agreement, the certificates delivered at Closing or in Seller's
disclosure schedules delivered in connection herewith, contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
omit on the Closing Date to state a material fact necessary in order to make the
statements contained herein or therein not misleading.

         4.31     No United States Transactions. None of Seller, the Company, or
the Company Subsidiaries individually or in the aggregate, (i) hold assets
located in the United States having an aggregate book value of US$15 million or
more or (ii) during the year ended December 31, 1999, made aggregate sales in or
into the United States of US$25 million or more.

         4.32     Supply and Product Purchase Agreements. All supply and product
purchase agreements entered into or being entered into in connection herewith
between the Company or any Company Subsidiary and Affiliates of Seller contain
prices and payment terms which are identical to those which previously existed
between these parties during 1999 and all other terms are no less favorable to
the Company and Company Subsidiaries than the supply and product purchase
arrangements which previously existed during 1999 with the same Affiliates of
Seller.

         4.33     Transfer of Real Property. All real property transferred by
the Company or any Company Subsidiary within one year prior to the Closing, did
not generate any revenues during such period and was not adjacent to any Company
Subsidiary's facilities.

                                    ARTICLE 5

                                       16
<PAGE>

                                    COVENANTS

         During the period from the date of this Agreement to the Closing Date,
Seller and Buyer, as applicable, agree to perform the covenants set forth below.

         5.1      Interim Operations of the Company.

         (a)      Except to the extent Buyer specifically gives its prior
written consent as requested exclusively by Seller's controller, Seller shall
and shall cause each of the Company and the Company Subsidiaries to operate
their respective businesses only in the ordinary and usual course consistent
with past practices and to (i) use commercially reasonable efforts to preserve
intact their respective business organizations and the goodwill of their
customers, suppliers and others having business relations with them, (ii) use
commercially reasonable efforts to retain the services of its present officers,
employees and agents; (iii) promptly furnish to Buyer a copy of any
correspondence received from or delivered to any governmental authority, which
is material, or regarding any matter that would result in liability to the
Company or any Company Subsidiary, (iv) maintain and keep its properties and
assets in as good a repair and condition as is consistent with past practices in
the ordinary and usual course of their businesses; and (v) continuously maintain
insurance coverage substantially equivalent to the insurance coverage in
existence on the date hereof.

         (b)      Additionally, during the period from the date of this
Agreement to the Closing Date, except with the prior consent of Buyer, as
requested exclusively by Seller's controller, or as contemplated by any other
provision of this Agreement, Seller shall cause the Company and each Company
Subsidiary not to, directly or indirectly,

                  (i)      amend or otherwise change their respective Articles
of Association or equivalent organizational documents;

                  (ii)     issue, sell or authorize for issuance or sale, shares
of any class of their respective securities (including, but not limited to, by
way of stock split or dividend) or any subscriptions, options, warrants, rights
or convertible securities, or enter into any agreements or commitments of any
character obligating them to issue or sell any such securities;

                  (iii)    redeem, purchase or otherwise acquire, directly or
indirectly, any shares of their respective capital stock or any option, warrant
or other right to purchase or acquire any such shares;

                  (iv)     declare or pay any dividend or other distribution
(whether in cash, stock or other property) with respect to their respective
capital stock other than the payments to shareholders declared in the February
and August Shareholders Meeting of Fustery for the year ended December 31, 1999
in an aggregate amount equal to MP$53,078,643.17;

                  (v)      sell, transfer, or dispose of any of their respective
assets or property rights (tangible or intangible), other than in the ordinary
course of business consistent with past practices, at a price equal to the
greater of fair market value or book value;

                  (vi)     grant or make any material Lien on any of their
respective properties or assets except any Lien that will be discharged prior to
the Closing Date;

                  (vii)    disclose any proprietary or confidential information
to any third party, except to Buyer;

                  (viii)   create, incur or assume any indebtedness in an
aggregate amount exceeding US$75,000, or any liability except in the ordinary
course of business consistent with past practices, but in no event in an
aggregate amount exceeding US$75,000;

                  (ix)     make or commit to make any capital expenditures in
excess of US$25,000 for any one capital expenditure or US$100,000 in the
aggregate for all capital expenditures;

                                       17
<PAGE>

                  (x)      become subject to any Guaranty;

                  (xi)     apply any of their respective assets to the direct or
indirect payment, discharge, satisfaction or reduction of any amount payable
directly or indirectly by, to or for the benefit of Seller or any Affiliate
thereof or to the prepayment of any such amounts or engage in any transactions
with any Affiliate which are not arms length and in the ordinary course of
business;

                  (xii)    write off the value of any inventory or any accounts
receivable or increase, the reserves for obsolete, damaged, spoiled or otherwise
not usable inventory or doubtful or uncollectable receivables;

                  (xiii)   increase the compensation payable or to become
payable to directors, officers or employees (including, without limitation, any
such increase pursuant to any Plan or otherwise), other than increases in the
ordinary course of business and consistent with past practice or grant any
rights to severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the Company
or any Company Subsidiary or any Affiliate thereof, or establish, adopt, enter
into or materially amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director,
officer or employee, except to the extent required by applicable Law or the
terms of any existing collective bargaining agreement;

                  (xiv)    enter into any agreement which would be a Company
Contract, or materially amend or terminate any existing Company Contract;

                  (xv)     acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, Person or any division
thereof or any assets, other than acquisitions of assets in the ordinary course
of business consistent with past practice;

                  (xvi)    alter in any adverse manner the manner of keeping its
books, accounts or records, or change in any manner the accounting practices
therein reflected, except in compliance with changes in Mexican GAAP subsequent
to the date hereof;

                  (xvii)   agree to accelerate or delay collection of notes or
accounts receivable in advance of or beyond their regular dates or the date when
the same could have been collected in the ordinary course of business consistent
with past practices;

                  (xviii)  waive, release, assign, settle or compromise any
claims or litigation involving a settlement in excess of US$25,000;

                  (xix)    make any Tax election or settle or compromise any
material federal, state or local or federal income Tax liability;

                  (xx)     allow levels of inventory to vary in any material
respect from the levels customarily maintained;

                  (xxi)    take or omit to take any action which is intended to
render any of Seller's representations or warranties untrue or misleading, or
which would be a material breach of any of Seller's covenants;

                  (xxii)   take any action which is intended to have a Company
Material Adverse Effect; or

                  (xxiii)  agree, whether in writing or otherwise, to do any of
the foregoing.

         5.2      Access. Seller shall afford to Buyer and its agents and
representatives access to the properties, books, records and other information
of the Company and the Company Subsidiaries, provided that such access shall be
granted

                                       18
<PAGE>

upon reasonable notice and at reasonable times during normal business hours in
such a manner as to not unreasonably interfere with normal business operations,
and will use their best efforts to cause the personnel of the Company and the
Company Subsidiaries to assist Buyer in its investigation of the Company. Seller
shall furnish promptly to Buyer all other information and documents concerning
its business, assets, liabilities, properties and personnel as Buyer may from
time to time reasonably request.

         5.3      Confidentiality. Except as otherwise required by law or in the
performance of obligations under this Agreement, any non-public information
received by a party (including its Affiliates) or its advisors from the other
party shall be kept confidential and shall not be used or disclosed for any
purpose other than in furtherance of the transactions contemplated by this
Agreement. The obligation of confidentiality shall not extend to information
which (a) is or becomes generally available to the public other than as a result
of a disclosure by a party in violation of this Agreement, (b) was in the
possession of a party prior to its receipt from the other party, or (c) becomes
available to a party on a nonconfidential basis from a source other than a party
to this Agreement, provided such source is not in violation of a confidentiality
agreement with the party providing such information. Upon termination of this
Agreement, each party shall, upon request, promptly return or destroy any
confidential information (which, for purposes of this Section 5.3, shall include
any of the confidential information described in Section 6.5 hereof) received
from the other party. The covenants of the parties contained in this Section 5.3
shall survive any termination of this Agreement but shall terminate at the
Closing, if it occurs, with respect to information concerning the Company and
the Company Subsidiaries.

         5.4      Consent of Governmental Authorities and Others. Each of Buyer
on the one hand and Seller, on the other, agree to file, submit or request, and
to cause its Affiliates to file, submit or request (or cause to be filed,
submitted or requested) promptly after the date of this Agreement and to
prosecute diligently any and all (a) applications or notices required to be
filed or submitted to any governmental or regulatory authorities, as specified
in Section 4.4 or in the case of Seller or its Affiliates as otherwise necessary
in connection with the transactions contemplated in contemplation hereof or in
connection herewith, and (b) in the case of Seller, requests for consents and
approvals of Persons required to be obtained by Seller, the Company, the Company
Subsidiaries or any of their Affiliates, as specified in Section 4.3 or, in
connection with the transactions contemplated by or in connection with this
Agreement; provided, however, Seller, the Company, the Company Subsidiaries and
their Affiliates shall not make any Agreement or arrangement relating thereto
which would adversely impact Company or any Company Subsidiary. Each of Buyer on
the one hand and Seller on the other, shall promptly make available to the other
such information as each of them may reasonably request relative to the
business, assets and property of Buyer, on the one hand, or Seller, the Company
the Company Subsidiaries and their Affiliates, on the other hand, as may be
required by each of them to prepare and file or submit such applications and
notices and any additional information requested by any governmental authority,
and shall update by amendment or supplement any such information given in
writing. Each of Buyer on the one hand and the Company and Seller on the other,
represent and warrant to the other that their (and their Affiliates') respective
filings, submissions, requests for consents and approvals, as amended or
supplemented, shall be true and not misleading to the extent that would give
rise to any liability.

         5.5      Efforts. Subject to the terms and conditions provided in this
Agreement, each of the parties shall, and shall use their best efforts to cause
their Affiliates to, use commercially reasonable efforts in good faith to take
or cause to be taken as promptly as practicable all reasonable actions that are
within its power to cause to be fulfilled those conditions precedent to its
obligations or the obligations of the other parties to consummate the
transactions contemplated in connection with or by this Agreement that are
dependent upon his or its actions. Seller and Buyer further covenant and agree,
with respect to any threatened or pending preliminary or permanent injunction or
other order, decree, or ruling or statute, rule, regulation or executive order
that would adversely affect the ability of the parties hereto to consummate the
sale of the Securities contemplated hereunder, to use all commercially
reasonable efforts to prevent or lift the entry, enactment or promulgation
thereof, as the case may be.

         5.6      Further Assurances. The parties shall, and shall use their
best efforts to cause their Affiliates to, deliver any and all other instruments
or documents required to be delivered pursuant to, or necessary or proper in
order to give effect to, the provisions of this Agreement, including all such
instruments of transfer as may be necessary to transfer ownership of the
Securities and the Shares and to consummate the other transactions contemplated
by or in connection with this Agreement.

                                       19
<PAGE>

         5.7      Publicity. The parties agree, and shall cause their
Affiliates, to cooperate in issuing any press release or other public
announcement concerning this Agreement or the transactions contemplated in
connection with or by this Agreement. Nothing contained herein shall prevent any
party from at any time furnishing any information to any governmental authority
which it is by law or otherwise so obligated to disclose or from making any
disclosure which its counsel deems necessary or advisable in order to fulfill
such party's disclosure obligations under applicable Law or the rules of the
AMEX. Subject to the foregoing, the disclosing party shall give the
non-disclosing party a copy of any such disclosure and the non-disclosing party
shall approve the same prior to its release, which consent shall not be
unreasonably withheld, delayed or conditioned.

         5.8      Acquisition Proposals; Notices. Except for the transactions
contemplated by this Agreement, unless and until the earlier to occur of (a) the
Closing Date or (b) the date this Agreement shall have been terminated, neither
the Seller nor Company nor any Company Subsidiary nor any Affiliate thereof
shall: directly or indirectly (i) solicit, encourage, initiate or participate in
any negotiations or discussions with respect to any offer or proposal to acquire
all or substantially all of the business and properties of Company or any
Company Subsidiary, whether by merger, purchase of assets or otherwise, or (ii)
except as required by law, disclose any information not customarily disclosed to
any Person concerning the business and properties of Company or any Company
Subsidiaries, afford to any Person (other than the Buyer and its designees and
the agents of the Company or the Company Subsidiaries and their Affiliates and
solely for purposes of facilitating the transactions contemplated hereby) access
to the properties, books or records of Company and Company Subsidiaries or
otherwise assist or encourage any Person, in connection with any of the
foregoing. In the event Seller, Company or any Company Subsidiary or any
Affiliate thereof shall receive any offer of proposal of the type referred to in
clause (i) above, Seller shall promptly inform the Buyer as to any such offer.
Each party shall promptly notify the other of (i) any action, suit or proceeding
that shall be instituted or threatened against such party or its Affiliates to
restrain, prohibit or otherwise challenge the legality of any transaction
contemplated in connection with or by this Agreement, (ii) any occurrence which
could reasonably be expected to make any representation of such party or its
Affiliates untrue and (iii) any breach by such party or its Affiliates of any
covenant. Seller shall promptly notify the Buyer of any lawsuit, claim,
proceeding or investigation that may be threatened, brought, asserted or
commenced which would have been required to be listed in any schedule hereto if
such lawsuit, claim, proceeding or investigation had arisen prior to the date
hereof.

         5.9      Employment Agreements. Seller shall cause the Domingo
Benavides Arredondo and Fustery to execute and deliver the Employment Agreement
set forth in Exhibit 7.2(h), in the form attached, at the Closing.

         5.10     Non-Competition and General Release Agreements. Seller shall
cause the Persons listed as parties to the non-competition agreements and
general releases set forth in Exhibit 7.2(j) to execute and deliver them, in the
form attached, at the Closing.

         5.11     Escrow Agreements. Seller shall cause the Persons, other than
the Buyer, listed as parties to the Escrow and the Adjustment Escrow Agreements
set forth in Exhibit 7.2(n)-1 and -2 to execute and deliver them, in the forms
attached at the Closing, and Buyer shall execute and deliver same at Closing.

         5.12     Guaranties. The Buyer shall cause the condition set forth in
Section 7.3(e) with respect to Guaranties to be satisfied at or prior to
Closing. The Seller shall cause the condition set forth in Section 7.2(o) with
respect to Guaranties to be satisfied at or prior to Closing.

         5.13     Real Estate. Seller shall cause the owner of the Mexico City
Real Estate to transfer such real estate to Fustery free and clear of all Liens
for nominal consideration on or prior to the Closing Date.

                                       20
<PAGE>

                                    ARTICLE 6

                              ADDITIONAL AGREEMENTS

         6.1      Investigation; Notices. The representations, warranties and
covenants set forth in this Agreement shall not be affected or diminished in any
way by any investigation (or failure to investigate) at any time by or on behalf
of the party for whose benefit such representations, warranties and covenants
were made.

         6.2      Survival. Sections 2.2, 2.3, 2.4, 2.5, 5.4, 5.6, 5.7, 6.1,
6.2, 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8, Articles 8 and the representations and
warranties of Seller and Buyer set forth in this Agreement shall survive the
Closing Date for five (5) years after the Closing Date.

         6.3      General Release. Seller, on behalf of itself and its
Affiliates, hereby unconditionally and irrevocably releases and forever
discharges, effective as of the Closing Date, each of the Company and the
Company Subsidiaries and its officers, directors, employees and agents, from any
and all rights, claims, demands, judgments, obligations, liabilities and
damages, whether accrued or unaccrued, asserted or unasserted, and whether known
or unknown, which ever existed, now exist, or may hereafter exist, by reason of
any tort, breach of contract, violation of law or other act or failure to act
which shall have occurred at or prior to the Closing Date, or in relation to any
other liabilities of the Company or any Company Subsidiary to Seller and/or its
Affiliates; provided that in no event shall the foregoing limit or bar any such
rights, claims, demands or judgments against or obligations, liabilities or
damages from Buyer that the Seller may have pursuant to this Agreement. Seller
expressly intends that the foregoing release shall be effective regardless of
whether the basis for any claim or right hereby released shall have been known
to or anticipated by Seller.

         6.4      Indemnification.

         (a)      Indemnification.

                  Seller agrees to defend, indemnify and hold harmless Buyer and
its current and future Affiliates and their respective directors, officers,
employees and agents (collectively, the "Buyer Indemnified Parties") from,
against and in respect of, (i) any and all liabilities, damages, claims,
deficiencies, fines, assessments, losses, Taxes, penalties, interest, costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel (collectively, the "Liabilities"), arising from, in connection with, or
incident to any breach or violation of any of the representations, warranties,
covenants or agreements of Seller contained in this Agreement or in any
schedule, hereto, or any certificate delivered by Seller at the Closing pursuant
to this Agreement, (ii) any and all Liabilities and/or Taxes incurred through
the Closing Date (whether or not due until after the Closing Date) with respect
to the Company and the Company Subsidiaries or any affiliated group of which the
Company or a Company Subsidiaries was a member at any time prior to the Closing
Date and (iii) any and all capital or other Taxes related to or arising from the
transactions contemplated hereby, in connection herewith or in contemplation
hereof by reason of any Liability for Taxes of the Company or any Company
Subsidiary or any of their shareholders and assessed by any taxing authority
against Seller, its shareholders (or former shareholders), the Company, the
Company Subsidiaries and/or any of their respective Affiliates either before or
after the Closing Date.

         (b)      Indemnification by Buyer.

                  Buyer agrees to defend, indemnify and hold harmless Seller and
its Affiliates and their respective directors, officers, employees, shareholders
and agents (collectively, the "Seller Indemnified Parties") from, against, and
in respect of, any and all Liabilities arising from, in connection with or
incident to any breach or violation by Buyer of any of the representations,
warranties, covenants or agreements of Buyer contained in this Agreement or in
any schedule hereto, or any certificate delivered by Buyer at the Closing
pursuant to this Agreement.

                                       21
<PAGE>

         (c)      Limitations on Indemnification.

                  (i)      Notwithstanding anything to the contrary contained
herein, except for subsection (iv) below, (x) neither party shall be obligated
to indemnify and hold harmless the other under this Section 6.4 for breaches of
representations and warranties unless and until all Liabilities in respect of
which such party is obligated to provide indemnification (net of insurance
proceeds) exceed Five Hundred Thousand United States Dollars (US$500,000)
following which (subject to the provisions of this Section 6.4) such party shall
be obligated to indemnify and hold harmless, the other party for all such
Liabilities.

                  (ii)     The aggregate amount of Liabilities for which a party
shall have liability under this Section 6.4 shall not exceed Thirty Million
United States Dollars (US$30,000,000) until the first anniversary of the Closing
Date, Twenty-Four Million United States Dollars (US$24,000,000) until the second
anniversary of the Closing Date, Eighteen Million United States Dollars
(US$18,000,000) until the third anniversary of the Closing Date, and Fifteen
Million United States Dollars (US$15,000,000) until the fifth anniversary of the
Closing Date.

                  (iii)    Notwithstanding anything in this Agreement to the
contrary, except as provided in subsection (iv) below, the obligations of Seller
and Buyer, as applicable, to provide indemnification under this Agreement shall
terminate and be extinguished forever at the close of business on the fifth
anniversary of the Closing Date; provided, however, that the obligations of
Seller or Buyer, as applicable, to provide indemnification under this Agreement
shall not terminate at such time with respect to any claim that has been
asserted by delivering a notice of such claim to the indemnifying party in
accordance with the terms hereof and such claim has not been paid or otherwise
resolved as of the date on which such indemnity obligation would otherwise
terminate pursuant to this Section 6.4(c)(iii). If a claim has been asserted and
not paid or resolved as described above, the indemnity obligations of Seller or
Buyer, as applicable, shall continue beyond such fifth anniversary, but (1) the
indemnity obligation shall continue only with respect to the claim in question,
and only until such claim is paid or otherwise finally resolved, and (2) in the
case of Seller as the Indemnifying Party, any Escrowed Property in escrow not
reasonably determined by Buyer to be needed to cover the disputed claim shall be
released from escrow to Seller upon written instructions to the Escrow Agent in
connection therewith by Buyer upon which the Escrow Agent shall be entitled to
conclusively rely.

                  (iv)     Notwithstanding anything to the contrary set forth
herein, none of the limitations on indemnification set forth in this subsection
(c) shall apply to matters relating to intentional or fraudulent breaches,
violations or misrepresentations.

         (d)      Indemnification Procedures.

                  (i)      The indemnified party shall notify the indemnifying
party in writing of any claim that it reasonably believes is likely to result in
a Liability within 60 days of the date such party receives written notice of the
claim (and may otherwise at any time provide notice of a claim), describing in
reasonable detail the claim and, if known, the estimated amount of the claim;
provided, however, that the failure of an indemnified party so to notify the
indemnifying party of the claim shall not relieve the indemnifying party of its
obligations under this Agreement except and to the extent the indemnifying party
shall have been actually materially prejudiced as a result of such failure.

                  (ii)     If any claim for indemnification arises out of or
involves a claim or demand made by a third party (a "Third Party Claim"), then
the indemnifying party shall, if such Third Party Claim does not involve a claim
for specific performance or other equitable relief, be entitled to control the
defense thereof at the indemnifying party's sole cost and expense if the
indemnifying party has clearly demonstrated (and continues to clearly
demonstrate) its ability to satisfy the entire claim, and irrevocably and
unconditionally (i) acknowledges in writing its obligation to indemnify the
indemnified party therefor for the full amount thereof, and (ii) promptly
assumes the defense thereof (and continues the defense thereof) at its own
expense in good faith and in a reasonably prudent manner with counsel selected
by the indemnifying party; provided, that such counsel is reasonably acceptable
to the indemnified party. In any such defense, the indemnified party may
participate with its own separate counsel; it being understood that for so long
as the indemnifying party is pursuing the defense as provided above, the legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof shall be paid by the indemnified party; provided, however, if
the

                                       22
<PAGE>

indemnified party reasonably believes in good faith that the interests of the
indemnified party and the indemnifying party may not be consistent, that there
may be defenses available to the indemnified party that are different from or in
addition to those available to the indemnifying party or the counsel
representing the indemnifying party has a conflict, then the indemnified party
shall have the right, but not the obligation, to control the defense thereof,
and in any such case the liability with respect to such claim shall include the
reasonable fees and costs of one law firm selected by the indemnified party. The
indemnified party shall deliver to the indemnifying party copies of all notices
and documents (including court papers) received by the indemnified party
relating the Third Party Claim along with the notice referred to above.

         The indemnifying party and the indemnified party shall reasonably
cooperate with each other in connection with the defense or prosecution of any
Third Party Claim for so long as the indemnifying party is defending same as
provided above, and such cooperation of the indemnified party shall be at the
indemnifying party's sole cost and expense; and at all times the indemnifying
party shall reasonably cooperate with the indemnified party. Such cooperation
shall include the retention (after notice of the Third Party Claim) and (upon a
party's request) the provision of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.

         In the event that the indemnifying party fails to defend and continue
to defend the Third Party Claim as provided above, the indemnified party shall
have the right, but not the obligation, to defend the same and make any
compromise or settlement and be indemnified therefor in accordance with the
terms hereof, and the indemnified party shall not make any other compromise or
settlement of the Third Party Claim without the prior written consent of the
indemnifying party which shall not be unreasonably withheld.

         If the indemnifying party shall have assumed the defense of a Third
Party Claim and for so long as such defense is prosecuted as provided above, the
indemnified party shall agree to any settlement, compromise or discharge of a
Third Party Claim which the indemnifying party may recommend and which by its
terms obligates the indemnifying party to pay the full amount of the liability
in connection with such Third Party Claim, which releases the indemnified party
completely in connection with such Third party Claim and which would not
otherwise adversely affect the indemnified party, by way of injunctive or
equitable relief against the indemnified party or its Affiliates or their
respective employees or businesses or otherwise.

         (e)      Indemnification Payments Net of Taxes.

                  All sums payable by an Indemnifying Party as indemnification
under this Section 6.4 shall be paid free and clear of all deductions or
withholdings (including any Taxes or governmental charges of any nature) unless
the deduction or withholding is required by law, in which event or in the event
the Indemnified Party shall incur any liability for Tax chargeable or assessable
in respect of any such payment, the Indemnifying Party shall pay such additional
amounts as shall be required to cause the net amount received by the Indemnified
Party to equal the full amount which would otherwise have been received by it
had no such deduction or withholding been made or no such liability for Taxes
been incurred.

         6.5      Confidentiality. Seller acknowledges that the Intellectual
Property and all other confidential or proprietary information with respect to
the business and operations of the Company and the Company Subsidiaries are
valuable, special and unique. Seller shall not and shall cause its Affiliates
not to, at any time after the Closing Date, disclose, directly or indirectly, to
any Person, or use or purport to authorize any Person to use any confidential or
proprietary information with respect to the Company, the Company Subsidiaries or
Buyer, whether or not for Seller's own benefit, without the prior written
consent of Buyer, including without limitation, information as to the financial
condition, results of operations, customers, suppliers, products, products under
development, inventions, sources, leads or methods of obtaining new products or
business, Intellectual Property, pricing methods or formulas, cost of supplies,
marketing strategies or any other information relating to the Company, the
Company Subsidiaries, or Buyer which could reasonably be regarded as
confidential, but not including information which is or shall become generally
available to the public other than as a result of an unauthorized disclosure by
Seller (including its Affiliates) or a Person to whom Seller, Buyer, the Company
or any Company Subsidiary has provided such information. Seller acknowledges
that Buyer would not enter

                                       23
<PAGE>

into this Agreement without the assurance of the Seller that all such
confidential and proprietary information will be used for the exclusive benefit
of the Company and the Company Subsidiaries.

         6.6      Continuing Obligations. The restrictions set forth in Section
6.5 are considered by the parties to be reasonable for the purposes of
protecting the value of the business and goodwill of the Company and Buyer.
Buyer and Seller acknowledge that Buyer would be irreparably harmed and that
monetary damages would not provide an adequate remedy to Buyer in the event the
covenants contained in Section 6.5 were not complied with in accordance with
their terms. Accordingly, Seller agrees that any breach or threatened breach by
it of any provision of Section 6.5 shall entitle Buyer to injunctive and other
equitable relief to secure the enforcement of these provisions, in addition to
any other remedies which may be available to Buyer as set forth herein. If any
provision of Section 6.5 is adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties.

         6.7      Seller Restrictions on Sale. Seller understands and
acknowledges that the Exchange Shares have been registered with the SEC under
the Securities Act on a Registration Statement on Form S-4. However, Seller
further understands and acknowledges that any sale, transfer or disposition by
them of any of the Exchange Shares may, under current law, be made only (a) in
accordance with the provisions of paragraph (d) of Rule 145 under the Securities
Act, (b) pursuant to an effective registration statement under the Securities
Act, (c) upon receipt by Buyer of an opinion of counsel reasonably acceptable to
Buyer, or a "no-action" letter obtained by it from the SEC, to the effect that
such sale, transfer or disposition is otherwise exempt from registration under
the Securities Act, or (d) upon receipt by Buyer of a representation letter from
Seller reasonably acceptable to Buyer.

         6.8      Guaranties. After the Closing Buyer shall use commercially
reasonable efforts to discharge the Guaranties set forth on Exhibit 7.3(e) which
were not discharged at Closing; provided, however, that such efforts shall not
require Buyer, Company or any Company Subsidiary to take any action which would
adversely impact it, including, but not limited to, modifying the underlying
obligations or providing additional or different collateral.

                                    ARTICLE 7

                   CLOSING; CONDITIONS PRECEDENT; TERMINATION

         7.1      Closing.

         (a)      The transfers and deliveries to be made pursuant to this
Agreement (the "Closing") shall take place at the offices of Buyer's counsel at
1 S.E. 3rd Avenue, Suite 2700, Miami, Florida 33131, on the date that is five
(5) business days after all conditions are satisfied (the "Closing Date"), or on
such other date and at such other place as may be agreed to by the parties. All
proceedings to be taken and all documents to be executed at the Closing shall be
deemed to have been taken, delivered and executed simultaneously, and no
proceeding shall be deemed taken nor documents deemed executed or delivered
until all have been taken, delivered and executed.

         (b)      At the Closing, Seller shall deliver to Buyer (i) all of the
certificates representing the Securities together with stock powers endorsed to
Seller sufficient to convey to Buyer or its permitted designee good and
marketable title to the Securities free and clear of all Liens, (ii) all of the
certificates representing the Company Subsidiary Securities, which Securities
will be owned by the Company or Buyer's designee at Closing, free and clear of
all Liens, (iii) the effective written resignations of each of the directors,
and members of the Supervisory Board of the Company and the Company
Subsidiaries, (iv) such other documents as may be specified, or required to
satisfy the conditions set forth in Sections 7.2 and 7.3, and (v) such other
documents and instruments necessary to effectuate the transfer of the Securities
as Buyer may reasonably request.

         (c)      At the Closing, Buyer shall deliver to Seller (i) evidence
that the Exchange Shares to be delivered to Seller pursuant to Section 2.2(a)
have been issued to Seller, it being understood that the certificates with
respect to such Exchange Shares will be delivered to Seller within ten (10)
business days after the Closing Date; (ii) all cash required

                                       24
<PAGE>

pursuant to Sections 2.2(a) and (b) hereof, to be paid by wire transfer of
immediately available funds to such account or accounts as may be designated by
Seller; and (iii) such documents as may be specified, or required to satisfy the
conditions set forth, in Sections 7.2 and 7.3.

         7.2      Conditions Precedent to the Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated by this
Agreement are subject to the satisfaction or written waiver at or prior to the
Closing of the following conditions.

         (a)      Representations and Warranties True. The representations and
warranties of Seller contained in this Agreement and in any certificate
delivered at Closing pursuant to this Agreement shall be true and correct in all
material respects (except for representations and warranties which are by their
terms qualified by materiality or Company Material Adverse Effect, which shall
be true and correct in all respects) as of the Closing Date with the same force
and effect as though made on and as of such date, except to the extent that any
representation or warranty is made as of a specified date, in which case such
representation or warranty shall be true in all material respects as of such
date, and except to the extent to changes expressly permitted by the terms of
this Agreement.

         (b)      Covenants Performed. The covenants of Seller, the Company and
each of the Company Subsidiaries contained in this Agreement to be performed or
complied with on or prior to the Closing Date shall have been duly performed or
complied with in all material respects.

         (c)      No Company Material Adverse Effect. There shall have not
occurred any Company Material Adverse Effect since December 31, 1999.

         (d)      Consents. Seller, the Company, the Company Subsidiaries and/or
their respective Affiliates, as the case may be, shall have obtained all
consents and approvals of Persons required to consummate the transactions
contemplated by or in connection with this Agreement, each of which shall have
been obtained without the imposition of any adverse terms or conditions.

         (e)      Opinions of Counsel. Buyer shall have received from Loyens &
Loeff, Loyens & Volkmars, and Javier Rodriguez Lucio, Belgian, Dutch and Mexican
legal counsel, respectively, to Seller, opinion letters, dated the Closing date,
in form and substance reasonably satisfactory to Buyer, with respect to the
matters set forth in Exhibit 7.2(e) to this Agreement.

         (f)      Company's Certificate. The Company shall have delivered to
Buyer a certificate executed by its President and Chief Executive Officer, dated
the Closing Date, certifying that the conditions specified in Sections 7.2(a),
(b) and (c) above have been fulfilled.

         (g)      No Litigation. No litigation, binding arbitration or other
proceeding shall be pending against any of the parties hereto by or before any
court, binding arbitration panel or governmental authority of competent
jurisdiction; no applicable Law or regulation shall have been enacted after the
date of this Agreement; and no binding applicable judicial or administrative
decision shall have been rendered; in each case, which enjoins or prohibits, or
seeks to enjoin or prohibit the consummation of the transactions contemplated by
or in connection with this Agreement.

         (h)      Employment Agreements. Each of the parties thereto shall have
entered into employment agreements substantially in the forms of Exhibits
7.2(h).

         (i)      Intercompany Agreements. Fustery shall have entered into a
supply agreement with Fersina Gist-Brocades and a product purchase agreement
with Farmacias Benavides in the forms of Exhibits 7.2(i)-1 and -2.

         (j)      Noncompetition and General Release Agreements. Each of the
parties thereto shall have entered into noncompetition agreements and general
releases in the form of Exhibit 7.2(j) with those persons listed on Schedule
7.2(j).

                                       25
<PAGE>

         (k)      Organizational Documents. Seller shall have delivered to Buyer
certified organizational documents and Good Standing Certificates for Seller,
the Company and each Company Subsidiary.

         (l)      Sale of Company Securities. Seller shall have caused the sale
of the one or more outstanding shares of capital stock of the Company and the
Company Subsidiaries not owned by the Company to a Person or Persons designated
by Buyer for no additional consideration.

         (m)      Real Estate. Seller shall have acquired good and marketable
title to the real estate ("Mexico City Realty Estate") on which the Company's
Mexico City facility is located for nominal consideration (approximately
14,830.40 square meters), free and clear of all Liens.

         (n)      Escrow Agreements. Each of the parties thereto shall have
entered into the Escrow Agreement and Adjustment Escrow Agreement in the forms
of Exhibits 7.2(n)-1 and -2.

         (o)      Release of Guaranties. All Guaranties executed by the Company
or any of the Company Subsidiaries for the benefit of Seller or its Affiliates
or any other Person other than the Company or a Company Subsidiary shall have
been released prior to the Closing Date.

         (p)      Effective Registration Statement. Buyer's Registration
Statement on Form S-4 shall be effective on the Closing Date. Such Registration
Statement (including the documents incorporated by reference therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.

         7.3      Conditions Precedent to the Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the satisfaction or written waiver at or prior to the
Closing of the following conditions.

         (a)      Representations and Warranties True. The representations and
warranties of Buyer contained in this Agreement and in any certificate delivered
at Closing pursuant to this Agreement shall be true and correct in all material
respects (except for representations and warranties which are by their terms
qualified by materiality, which shall be true and correct in all respects) as of
the Closing Date with the same force and effect as though made on and as of such
date, except to the extent that any representation or warranty is made as of a
specified date, in which case such representation or warranty shall be true in
all material respects as of such date, and except to the extent to changes
expressly permitted by the terms of this Agreement.

         (b)      Covenants Performed. The covenants of Buyer contained in this
Agreement to be performed or complied with on or prior to the Closing Date shall
have been duly performed or complied with in all material respects.

         (c)      Buyer's Certificate. Buyer shall have delivered to Seller a
certificate executed by its President or a Vice President, dated the Closing
Date, certifying in such detail as Seller may reasonably request, that the
conditions specified in Sections 7.3(a), (b) and (g) above have been fulfilled.

         (d)      Consents. All consents and approvals by governmental
authorities and other Persons necessary for the consummation of the transactions
contemplated by this Agreement shall have been obtained.

         (e)      Guaranties. The Guaranties set forth on Exhibit 7.3(e) shall
have been discharged or replaced by Buyer prior to the Closing Date, or Buyer
shall have indemnified the guarantor for such Guaranties not released or
replaced.

         (f)      No Litigation. No litigation, arbitration or other proceeding
shall be pending against any of the parties hereto before any court, binding
arbitration panel or governmental authority; no applicable Law or regulation
shall have been enacted after the date of this Agreement; and no judicial or
administrative decision shall have been rendered; in each case, which enjoins or
prohibits, or seeks to enjoin or prohibit, the consummation of the transactions
contemplated by this Agreement.

                                       26
<PAGE>

         (g)      Effective Registration Statement. Buyer's Registration
Statement on Form S-4 shall be effective on the Closing Date. Such Registration
Statement (including the documents incorporated by reference therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.

         7.4      Termination.

         (a)      This Agreement and the transactions contemplated hereby may be
terminated prior to the Closing: (i) at any time by mutual consent of the
parties; (ii) by either party if the Closing has not occurred on or prior to the
date which is ninety (90) days after the date hereof (such date as it may be
adjusted, pursuant to the terms hereof the "Termination Date"), provided the
failure of the Closing to occur by such date is not the result of the failure of
the party seeking to terminate this Agreement to perform or fulfill any of its
obligations hereunder and provided, further, that the Termination Date shall be
extended by ten (10) days in the event any necessary governmental approvals to
the consummation of the sale of the Securities contemplated hereunder have not
been obtained; (iii) by Buyer at any time in its sole discretion if any of the
representations or warranties of Seller in this Agreement are not in all
material respects true, accurate and complete or if Seller breaches in any
material respect any covenant contained in this Agreement; or (iv) by Seller at
any time in its sole discretion if any of the representations or warranties of
Buyer in this Agreement are not in all material respects true, accurate and
complete or if Buyer breaches in any material respect any covenant contained in
this Agreement.

         (b)      Buyer or Seller, as the case may be, shall give the other
party written notice of its intent to terminate this Agreement pursuant to
clauses (iii) or (iv) above, as the case may be, and the other party shall have
forty-five (45) days from its receipt of such notice, but in no event later than
the Termination Date, to cure such breach.

         (c)      If this Agreement is terminated pursuant to this Section 7.4,
written notice thereof shall promptly be given by the party electing such
termination to the other party and, subject to the cure periods set forth in (b)
above, this Agreement shall terminate without further actions by the parties and
no party shall have any further obligations under this Agreement.
Notwithstanding the foregoing, any termination of this Agreement pursuant to
this Section shall not relieve any party from any liability for the intentional,
willful or bad faith breach of any representation, warranty or covenant
contained in this Agreement or be deemed to constitute a waiver of any remedy
available for such breach (except that the actual delivery of the schedules
shall not be deemed to be intentional for such purpose). Notwithstanding the
termination of this Agreement, the respective obligations of the parties under
Sections 5.3, 5.7, 6.1, 6.2, 6.4 and 7.4 and Article 8 shall survive the
termination of this Agreement.

                                    ARTICLE 8

                                  MISCELLANEOUS

         8.1      Notices. Any notice or other communication under this
Agreement shall be in writing and shall be delivered personally or sent by
certified mail, return receipt requested, postage prepaid, or sent by facsimile
or prepaid overnight courier to the parties at the addresses set forth below
their names on the signature pages of this Agreement (or at such other addresses
as shall be specified by the parties by like notice). Such notices, demands,
claims and other communications shall be deemed given when actually received or
(a) in the case of delivery by overnight or similar service with guaranteed next
day delivery, the next day or the actual day designated for delivery, (b) in the
case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise. A copy of any
notices delivered to Buyer shall also be sent to IVAX Corporation, 4400 Biscayne
Boulevard, Miami, Florida 33137, Attention: General Counsel, Fax (305) 575-6049.
A copy of any notices delivered to Seller or the Company shall also be sent to
Brown & Wood LLP, One World Trade Center, New York, New York 10048, Attention:
Michael L. Fitzgerald, Esq. And Lori Anne Czepiel, Esq.

         8.2      Entire Agreement. This Agreement, its schedules and exhibits
contain every obligation and understanding between the parties relating to the
subject matter hereof, merges all prior discussions, negotiations and
agreements, if any, between them, and none of the parties shall be bound by any
representations, warranties, covenants, or other understandings, other than as
expressly provided or referred to herein or therein.

                                       27
<PAGE>

         8.3      Assignment. This Agreement may not be assigned by any party
without the written consent of the other party; provided that Buyer may assign
this Agreement to one of its wholly-owned Subsidiaries, whether such Subsidiary
currently exists or is formed in the future; provided that Buyer shall remain
liable for all of its obligations under this Agreement. Buyer may assign the
right to receive one or more of the Securities to any Person affiliated with
Buyer to comply with the obligation established by the Mexican Law on Business
Organizations that stock companies have a minimum of two stockholders, without
such written consent; and provided further that Buyer shall remain liable for
all of its obligations under this Agreement and any such assignee shall have no
rights against Seller. Subject to the above, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, personal representatives, legal representatives, and
permitted assigns.

         8.4      Waiver and Amendment. Any representation, warranty, covenant,
term or condition of this Agreement which may legally be waived, may be waived,
or the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. Any such waiver, extension or
amendment shall be evidenced by an instrument in writing executed on behalf of
the appropriate party by a person who, to the extent applicable, has been
authorized by its Board of Directors to execute waivers, extensions or
amendments on its behalf. No waiver by any party hereto, whether express or
implied, of its rights under any provision of this Agreement shall constitute a
waiver of such party's rights under such provisions at any other time or a
waiver of such party's rights under any other provision of this Agreement. No
failure by any party hereto to take any action against any breach of this
Agreement or default by another party shall constitute a waiver of the former
party's right to enforce any provision of this Agreement or to take action
against such breach or default or any subsequent breach or default by such other
party.

         8.5      No Third Party Beneficiary. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
Person other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.

         8.6      Severability. In the event that any one or more of the
provisions contained in this Agreement shall be declared invalid, void or
unenforceable, the remainder of the provisions of this Agreement shall remain in
full force and effect, and such invalid, void or unenforceable provision shall
be interpreted as closely as possible to the manner in which it was written.

         8.7      Expenses. Each party agrees to pay, without right of
reimbursement from the other party, the costs (hereafter referred to as "Costs")
incurred by it, or in the case of Seller, the Company or Company Subsidiaries,
incident to the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, costs incident to the preparation of this Agreement, and the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection herewith.

         8.8      Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.

         8.9      Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

         8.10     Litigation; Prevailing Party. In the event of any litigation
with regard to this Agreement, the prevailing party shall be entitled to receive
from the non-prevailing party and the non-prevailing party shall pay upon demand
all reasonable fees and expenses of counsel for the prevailing party.

         8.11 Injunctive Relief. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.

                                       28
<PAGE>

         8.12     Governing Law. This Agreement has been entered into and shall
be construed and enforced in accordance with the laws of the State of Florida
without reference to the choice of law principles thereof.

         8.13     Arbitration. All disputes, controversies and claims directly
or indirectly arising out of or relating to this Agreement (including all of the
Exhibits to this Agreement), or the validity, interpretation, construction,
performance, breach, termination or enforceability of this Agreement (including
this clause and all of the Exhibits to this Agreement) (collectively,
"Disputes"), shall be resolved in accordance with the procedures set forth in
this Section. The parties shall initially attempt in good faith to resolve all
Disputes amicably between themselves. If a Dispute remains unresolved, either
Party may submit the matter to arbitration. All Disputes to be submitted to
arbitration shall be finally, exclusively and conclusively settled by binding
arbitration under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce ("ICC"), which Rules shall be deemed to be incorporated by
reference into this Article. The place of arbitration shall be Miami, Florida
USA if the request for arbitration is made by Seller and Houston, Texas U.S.A.
if the request for arbitration is made by Buyer. The language of the arbitrators
shall be English and all documents not in English submitted by any party shall
be accompanied by a certified English translation thereof. Unless otherwise
agreed by the Parties, the number of arbitrators shall be three. Each party
shall appoint one arbitrator, and the third arbitrator shall be appointed by the
ICC. In the event that either party shall fail to appoint an arbitrator within
thirty (30) days after the commencement of the arbitration proceeding, such
arbitrator be appointed by the ICC in accordance with the Rules. Execution upon
the award of the arbitrators may be entered in any court having jurisdiction
thereof. The Parties acknowledge that the 1958 United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the "New York
Convention") applies to this Agreement and to any arbitral award or order
resulting from any arbitration concluded hereunder. The costs of any
arbitration, including without limitation administrative and arbitrators' fees,
shall be shared equally by the parties. Each party shall bear the cost of its
own attorneys' fees and expert witness fees, if any.

                         [signatures on following page]

                                       29
<PAGE>

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

                                    BUYER:
                                    -----

                                    IVAX CORPORATION

                                    By:_________________________________
                                    Neil Flanzraich
                                    Vice Chairman and President
                                    4400 Biscayne Boulevard
                                    Miami, Florida  33137
                                    USA

                                    Facsimile: (305) 575-6016

                                    SELLER
                                    ------

                                    MORCOB, CVA

                                    By TARIX HOLDING N.V., as its sole director,
                                    By: G.P. de Goede, as its director

                                    By:____________________________
                                    Name: Jochem de Koning, power of attorney
                                    Tervurenlaan 13A
                                    1040 Brussels, Belgium

                                       30
<PAGE>

                                 Exhibit 7.2(e)

                                 Opinion Letters

                                       31
<PAGE>

                                 Exhibit 7.2 (h)

                              Employment Agreement

                                       32
<PAGE>

                                Exhibit 7.2(i)-1

                                Supply Agreement

                                       33
<PAGE>

                                 Exhibit 7.2(j)

                            Non-Competition Agreement

                                       34
<PAGE>

                                 Schedule 7.2(j)

Felipe Benavides Pompa

Domingo Benavides Pompa

Myrthala Benavides de Prado

Hector Benavides Pompa

Idalia Benavides de Salas

Jaime Benavides Pompa

Enrique Mouret Benavides

                                       35
<PAGE>

                                Exhibit 7.2(n) -1
                                Escrow Agreement

                                       36

<PAGE>

                                Exhibit 7.2(n)-2
                           Adjustment Escrow Agreement

                                       37
<PAGE>

                                 Exhibit 7.3(e)

                                   Guaranties

                                       38DISTRIBUTORSHIP AGREEMENT

         THIS DISTRIBUTORSHIP  AGREEMENT  ("Agreement") is made and entered into
as of this 15th Day of this December, 1997 by and between PURE TECHNOLOGIES INC,
OF CALGARY,  ALBERTA ("Company"),  and FUGRO GEOTECHNICAL  SERVICES (HK) LIMITED
("Distributor").

         In consideration  of the mutual covenants and undertakings  hereinafter
set forth, the parties agree as follows:

1.       Appointment.

         The Company  hereby  appoints the  Distributor  as its exclusive  sales
representative  in the Territory,  as defined in Section 2 of this Agreement and
the  Distributor  hereby  accepts  such  appointment  to sell the  products  and
licenses  of the  Company  (the  "Products")  in  accordance  with the terms and
conditions of this  Agreement.  The use of the term sales of Products or similar
terms in this Agreement shall refer to sales of products and sale of licenses to
use the data acquisition software associated with the use of the products.

2.       Territory.

         The Distributor  shall have the exclusive right to sell the products in
the  geographic  area  described  as  follows:   Hong  Kong,   Macau  and  China
("Territory").  The  Territory  may be  modified  from time to time by the prior
written agreement of the parties.

3.       Term.

         The term of this  Agreement  shall  commence  on the date  first  above
written,  and,  unless  terminated  earlier as  provided  in Section  14,  shall
continue for one (1) year terminating  upon the first  anniversary of such date,
provided that the Agreement shall thereafter be renewed without action by either
party for successive  periods of one (1) year each,  subject to the  termination
provisions of Section 13, unless either party gives written notice  objecting to
such  renewal  at least  sixty  (60) days  prior to the  expiration  of the then
current one-year term.

4.       Covenants and Undertakings of Distributor.

         The Distributor covenants and agrees as follows:

4.1      To use its best  efforts,  and to spend as much time and as much of its
resources as may reasonably be required,  to promote sales of the Products.  The
Distributor  further  agrees  that it will  refrain  from  soliciting  sales  or
otherwise  promoting  sales  of  the  Products  outside  the  territory.   These
obligations include, without limitation, the following:

         (a)      Registration and Licensure.  The Distributor agrees to use its
                  best efforts to promptly obtain from the proper authorities in
                  the Territory at its own cost and expense,  all registrations,
                  licenses,  and approvals  required for the import  sales,  and
                  distribution  by  the  Distributor  of  the  Products  in  the
                  Territory.

<PAGE>

                                     - 2 -

         (b)      Specific  Promotion  Efforts.  The  Distributor  shall, at its
                  expense,  distribute sales literature describing the Products,
                  which  the  Company  shall  provide,  promote  the sale of the
                  Products through trade publications,  and exhibit the Products
                  at exhibitions at which products of the same or similar nature
                  are exhibited.  All advertising or promotional  materials,  if
                  any, utilized by the Distributor,  its agents, or employees in
                  conjunction  with the sale of the  Products,  other  than such
                  sales  literature  as is furnished to the  Distributor  by the
                  Company,  shall be approved in writing by the Company prior to
                  its use or dissemination.

         (c)      Follow-up on Leads.  All leads furnished to the Distributor by
                  the Company shall be contacted  within a reasonable time and a
                  report of the  results  of such  contacts  shall be  submitted
                  promptly to the Company. All leads obtained by the Distributor
                  for sales of Products outside the Territory shall be forwarded
                  to the Company.

         (d)      Visits by the Company.  The Company  shall have the right upon
                  reasonable notice to visit and observe the Distributor's place
                  of business and to accompany the  Distributor  during sales or
                  servicing   calls  or  training   sessions   with   customers.
                  Additionally,  the Distributor agrees that the Company may, at
                  any time during reasonable  business hours, review and inspect
                  the service facilities for the Products.

         (e)      Customer  Complaints.  The  Distributor  and the Company  each
                  agree to cooperate  fully in dealing with customer  complaints
                  concerning  the  Products  and to take such  action to resolve
                  such  complaints  as may be requested by the Company.  In this
                  regard, the Distributor and the Company each agree promptly to
                  furnish the other with any information that may be required by
                  the other to comply with any governmental  laws or regulations
                  or that may be required to minimize the potential  impact of a
                  recall of any of the Products.

         (f)      Traceability.  The Distributor shall comply to the best of its
                  ability with any and all traceability  programmes in effect at
                  any time as initiated by the Company.

         (g)      Financial  and  Credit  Information.  If so  requested  by the
                  Company,  the  Distributor  agrees to provide  to the  Company
                  adequate financial  information on a confidential basis and if
                  requested  credit  references,  to assure  the  Company of the
                  Distributor's   ongoing  financial  capacity  to  conduct  its
                  business.

4.2      The parties hereto  acknowledge  that Pure  Technologies  are expert in
acoustic  monitoring of the failure of tensioned  reinforcements,  including the
main cables and suspender  ropes of suspension  bridges and the  stay-cables  of
cable-stayed  bridges.  The parties  also  acknowledge  that Fugro  Geotechnical
Services (HK) Limited are expert in the instrumentation of civil engineering and
other structures for load,  pressure,  movement and other parameters.  These two
areas of expertise are exclusive and complementary.

<PAGE>

                                      -3-

         The Company and the  Distributor  agree not to compete in the technical
specialism of the other,  in the area defined within Clause 2 Territory,  during
the period of this agreement and for a period of two years after the termination
of the agreement.

4.3      To  refrain  from any  expenditure  on behalf of the  Company,  or from
incurring  any  liability in the name of the Company,  without the prior written
consent of the Company.

4.4      To use  its  best  efforts  to  promote,  safeguard,  and  protect  the
interests of the Company,  and the Company's rights to the Products,  consistent
with the best business practices.

5.       Compensation.

5.1      Percentage of Sales.

         The  Company  will  pay the  Distributor  compensation  based  upon the
following:

         (a)      For sales  delivered  within the Territory,  based upon orders
                  procured by the Distributor  and/or enquiries  referred to the
                  Company  by the  Distributor,  the  Company  will allow to the
                  Distributor  a discount of twenty  percent (20%) of the normal
                  selling price of the Products.

         (b)      For sales delivered  outside the Territory,  based upon orders
                  procured by the Distributor within the Territory,  ten percent
                  (10%) of the net  collected  prices at which the  Products are
                  sold.

         (c)      For any order which is not  procured by the  Distributor,  but
                  which is delivered  into the  Territory,  five percent (5%) of
                  the net collected prices at which the Products are sold.

         For the purposes of this Section 5.1 "net  collected  prices" means the
         amounts actually  received by the Company for the sale of such Products
         less any discounts or  commissions  paid to a third party in respect of
         such sale.

5.2      Payment.

         The  Compensation to the  Distributor  for each sale under  Sub-section
5.1.b and 5.1.c will become  owing  after  receipt of payment by the Company for
such sale, and will become due and payable at the end of the calendar quarter in
which such payment is received.

6.       Terms of Sales.

6.1      Price of Products.

         The prices at which the  Products are to be sold by the Company will be
fixed by the Company,  subject to change by the Company  from time to time,  and
communicated to the Distributor at periodic intervals.  Such price changes shall
be effective  thirty (30) days after the date of written  notice  thereof to the
Distributor.  Any order or  written  quote  from the  Distributor  received  and
accepted by the Company prior to a price increase on Products which are the

<PAGE>

                                      - 4 -

subject  of any such  order or  written  quote  shall be shipped at the price in
effect at the time of  acceptance  of such  order or quote by the  Company.  For
purposes of  calculating  the  percentages  described in  Subsections  5.l.b and
5.l.c,  the prices will exclude all  applicable  sales and excise taxes.  In the
event the Company grants  discounts based upon quantity  purchases or otherwise,
the percentage compensation to be paid to the Distributor will be based upon the
actual discounted price at which the sale occurs, rather than the normal selling
price.

6.2      Purchase Orders.

         All purchase  orders shall be subject to acceptance by the Company.  No
purchase order shall be binding upon the Company until acceptance by the Company
is communicated to the Distributor.

6.3      Payment Terms.

         The  Distributor  agrees that all purchase orders which it procures for
the Company for direct  shipment to the purchaser  shall be payable by Letter of
Credit or  certified  funds,  or other  terms  acceptable  to the  Company.  All
payments  shall be made in United  States  Dollars.  All Products  sold shall be
shipped CIF as defined by INCOTERMS,  1980 edition,  unless  otherwise agreed in
writing.  Purchase  Orders  placed by the  Distributor  on the Company  shall be
payable 60 days from the date of the Company's invoice for the Products.

7.       Delivery of Products.

7.1      Delivery of Products.

         All  Products  will be  delivered by common  carrier  unless  otherwise
specified in the purchase order. The Company will not be liable for any delay in
the  performance of its obligations in the delivery or shipment of the Products,
or for any damage suffered by any purchaser or the Distributor by reason of such
delay,  when such delay is,  directly or indirectly,  caused by or in any manner
arising from fires,  floods,  accidents,  riots, acts of God, war,  governmental
interference,  embargoes, strikes, labor difficulties,  shortage or labor, fuel,
power,  materials,  or supplies,  transportation  delays,  or any other cause or
causes  (whether  or not similar in nature to any of the  foregoing)  beyond the
Company's  control.  All  orders  are  accepted  by the  Company  subject to the
Company's  ability  to obtain the  necessary  raw  materials,  and all orders or
contracts as well as shipments  are subject to government  regulations,  orders,
directives, and restrictions which may be in effect from time to time.

8.       Confidentiality.

8.1      Confidential Information.

         Distributor shall keep confidential the Agreement all data, data bases,
computer programs, marketing plans and information provided to Distributor by or
on behalf of the Company in  connection  with the  Agreement or Products and all
other confidential and proprietary  information of the Company,  now existing or
to be  developed  in the future  (such  information  is  intended to include all
information of any kind  whatsoever  related to the Company's  business which is
not generally and publicly known, including information received

<PAGE>

                                      - 5 -

orally or by a confidential writing which, prior to such receipt, was non-public
information  of  such  recipient)  (collectively  the  "Information"),  and  all
Information (including data generated by operation of the Products) developed by
the operation of the Products,  and shall not disclose the Agreement or any such
Information to any person, firm, entity or corporation without the prior written
permission  of the  Company.  Distributor  shall be bound  by an  obligation  of
confidence to the Company in respect of any  Information  or trade  secrets.  In
respect of such Information, Distributor shall not:

1.       disclose, either directly or indirectly,  any such Information,  or any
         part thereof, to any person,  firm,  corporation or entity except as is
         specifically contemplated in this Agreement; and

2.       may not use any such Information,  or any part thereof, for any purpose
         except as is specifically contemplated within this Agreement.

8.2      Trade Secrets.

         Upon the termination of this Agreement for any reason  whatsoever,  the
Distributor  shall  return  all  data,   prospectuses,   advertising,   and  all
Information  concerning  the Products  (including  all software,  copies of test
results and other data accumulated),  and the Distributor shall not make further
use of any of the materials or technical  information,  nor disclose or use such
materials or Information for its own account or on behalf of any other person or
entity. Upon termination of this Agreement for any reason, the Distributor shall
discontinue the use of the Company's trade name, trademark,  labels, copyrights,
patents,  and other advertising media and remove all signs and displays relating
thereto.

9.       Intellectual Property.

         No rights are  granted  hereunder  to  Distributor  under any  patents,
copyrights, information, trademarks or other intellectual property rights except
as are incidental  only to the sale of Products by the Distributor and the right
to use such Products by the  Distributor's  customers.  Whenever the Distributor
shall  make  reference  to  its  relationship  with  the  Company,   whether  in
advertising or otherwise,  the Distributor  shall describe its relationship only
as a  distributor  of the  Products.  Any  other use by the  Distributor  of the
Company's  trade  name,  trademark,  or any  other  trade  names  or  trademarks
associated  with the  Products  must be approved in advance in writing by a duly
authorized  officer of the Company.  The Distributor shall not use any trademark
or trade name of the Company or any variation  thereof,  alone or in combination
with other words,  in connection with any product which has not been supplied by
the company,  or as a part of or in connection with the Distributor's  corporate
or company name. The Distributor  shall not register the Company's trade name or
trademarks or any other trade names or trademarks  associated  with the Products
in  the  Territory.  All  data  generated  from  use  of the  Products  and  any
suggestions, improvements,  enhancements, derivative works or modifications made
to any of the Products or any part there of shall be the property of the Company
including any copyright  patent or other  intellectual  property rights therein.
Distributor shall sign such documents,  assignments or agreements as the Company
may require to protect the Company's rights therein.

<PAGE>

                                     - 6 -

10.      Limited Warranty and Limitations.

10.1     The Company  provides to its customers only those  warranties set out m
the Company's  form of agreements and subject to the limits on liability set out
in such  agreements.  On a case by case  basis the  Company  may  provide  other
warranty terms or other limits on liability but only if previously authorized by
the Company in writing. NO OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO ANY IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, IS MADE.

10.2     The  Company  shall  not have any  liability  of any  kind  under  this
contract  unless  Distributor  notifies the Company of any claimed defect within
the warranty  period  specified in the  Company's  form of agreement as measured
from the date of  delivery.  If a  Product  is to be  returned  to the  Company,
written  authorization  must be obtained  from the  Company,  and the  Company's
shipping  instructions  must be followed.  If the claimed  defect is a result of
misuse,  mishandling,  abnormal  conditions of  application  or storage,  or the
result or  unauthorized  alteration,  the cost of  replacement  and all  related
expenses shall be borne by the Distributor. Any Products returned to the Company
for replacement or refund shall become the property of the Company.

10.3     The  Distributor,   its  agents,  and  employees  shall  not  make  any
statement,  representation,  warranty, or advertisement  concerning the Products
which exceed in scope or are different in meaning from the limited  warranty set
forth in Section  10.1.  The  Distributor  shall  indemnify and hold the Company
harmless against any claims, liability,  costs, and expenses of any nature which
the Company may incur as a result of any such activities.

11.      Modification of Products and Labeling.

         The  Distributor  shall not,  without the prior written  consent of the
Company in each  instance  obtained,  modify the Products or any part thereof or
modify,  remove,  cover,  or add to the  labels  affixed  by the  Company to the
Products.  if  requested by the  Distributor,  the Company  shall affix  foreign
translations  of  labels  to  Product  containers,  and  the  Distributor  shall
reimburse  the  Company  for all  reasonable  expenses  incurred as part of such
relabelling.

12.      Patent Infringement.

         If a patent  infringement action is commenced or threatened against the
Company as to one or more of the Products, and the Company elects to discontinue
the sale of any such  Products  in any part of the  Territory,  the  Distributor
shall  discontinue  its  efforts to sell such  Products  in any such part of the
Territory immediately upon receipt of written notice thereof from the Company.

13.      Termination.

13.1     The Company may terminate this Agreement by giving forty five (45) days
written notice in the following  events:  (a) Distributor has ceased to function
as a going concern or conduct its operations in the normal course of business as
a distributor,  (b) Distributor enters into suspension of payments, or commences
or becomes the subject  of, any action in  relation to  bankruptcy,  insolvency,
reorganization,   dissolution,   or  winding  up;  (c)  Distributor  has  become
insolvent; (d)

<PAGE>

                                     - 7 -

Distributor  has made a general  assignment  for the benefit of  creditors;  (e)
Distributor has attempted to assign,  convey, or otherwise  transfer in whole or
in part any of  Distributor's  rights  hereunder to any third party  without the
Company's prior written consent based on  Distributor's  full, true, and correct
disclosure of the proposed  transaction to the Company;  (f) any material change
in the general management,  ownership,  or control including sale, transfer,  or
relinquishment  by Distributor of any  substantial  interest in the ownership of
the business to be carried on by Distributor  under this Agreement,  unless such
changes are approved in advance and in writing by the  president of the Company;
(g) conviction of Distributor or any principal officer or manager of Distributor
for any crime  tending to affect  adversely  the  ownership  or operation of the
business; (h) Distributor provides falsified data or information to the Company;
or (i)  Distributor  breaches any of the  obligations  under Sections 8.1 or 8.2
respecting  Information  or  Section 9  respecting  intellectual  property.  The
Distributor  hereby  acknowledges  that forty five (45) days is a reasonable and
adequate period of notice under the  circumstances,  including the extent of the
expenditures,  investments,  and commitments  made and to be made by Distributor
under this Agreement.

13.2     In the event either party commits a material  breach of this  Agreement
and such party fails to remedy such default within sixty (60) days of receipt of
written  notice  thereof from the opposite  party,  the party giving such notice
may, at any time thereafter upon written notice,  terminate this Agreement.  The
Distributor  hereby  acknowledges  that  sixty  (60)  days is a  reasonable  and
adequate period of notice under the  circumstances,  including the extent of the
expenditures,  investments,  and commitments  made and to be made by Distributor
under this Agreement.

13.3     Either  party may  terminate  this  Agreement  without  cause  upon the
expiration of a ninety (90) day period after giving  written  notice  thereof to
the other party. The Distributor hereby  acknowledges that ninety (90) days is a
reasonable and adequate period of notice under the circumstances,  including the
extent of the expenditures,  investments, and commitments made and to be made by
Distributor under this Agreement.

13.4     In the  event  of  termination  of this  Agreement,  whether  upon  the
expiration  of the term of this  Agreement  or  pursuant  to the  provisions  of
Section 13.1,  13.2, or 13.3, the Company shall not be liable to the Distributor
for  compensation,   reimbursement,  or  damages  on  account  of  the  loss  of
prospective  profits  on  anticipated  sales,  or on  account  of  expenditures,
investments,  leases, employee termination pay, or other commitments or expenses
relating to the business or goodwill or the Distributor.

13.5     Termination  of  this  Agreement  shall  not  relieve  or  release  the
Distributor  from any payments which the  Distributor  may owe the Company under
the terms of this Agreement, including without limitation, payments for Products
delivered to the distributor.

13.6     Acceptance  by the  Company of any orders  from the  Distributor  after
termination of this  Agreement  shall not constitute a renewal of this Agreement
or a waiver of the right of the Company to treat this Agreement as terminated.

13.7     Notwithstanding  anything contained herein to the contrary,  Sections 8
and 9 of this  Agreement  shall survive  termination of this Agreement and shall
remain in full force and effect.

<PAGE>

                                     - 8 -

14.      Relationship.

         The  Distributor  is an  independent  contractor.  Nothing herein shall
constitute the Distributor as an employee or agent of the Company, nor the legal
representative  of the Company  for any purpose or reason not set forth  herein.
The Distributor  does not have the authority to assume or create any obligation,
express or implied,  on behalf of or in the name of the Company,  or to bind the
Company  in any  manner  whatsoever,  except as  authorized  in  writing  by the
Company.  The Distributor shall be solely  responsible for the operations of its
business and all costs incurred in such operations,  solely  responsible for any
injury,  liabilities,  or damage  incurred in the conduct of its  business,  for
complying  with all laws and  regulations  of the nation,  state,  and political
subdivision  in which it transacts its business,  and shall bear all expenses in
connection therewith. It is the express intent of the parties, pursuant to their
right to freedom of contract,  that this Agreement  shall govern the obligations
of each to the other and the right of each resulting from such  relationship and
that  no  Ordinance,  Regulation  or any  other  law  purporting  to  alter  the
relationship  between  the Company and the  Distributor,  presently  in force or
hereafter  enacted,  may apply to the rights and  obligations of and between the
parties under this  Agreement.  The rights and obligations of the parties in the
event of termination of this Agreement have been  separately  bargained for, and
are intended by both parties to be in lieu of any rights or obligations  arising
under  any  Ordinance,  Regulation  or any  other  law  purporting  to alter the
relationship of the parties.

15.      Compliance with Law.

         The  Distributor  shall comply with all prevailing laws and regulations
of the Territory pertaining to the importation,  distribution, sales, promotion,
and  marketing  of the  Products in the  Territory  and in any manner  otherwise
pertaining to  performance  by the  Distributor  of its  obligations  under this
Agreement.  The Distributor shall accept and assume full  responsibility for any
and all civil or criminal liabilities and costs that may be assessed as a result
of the  Distributor's  performance of Distributor's  duties under this Agreement
and shall hold  harmless  and defend the  Company  from and  against any and all
fines, damages, levies, costs, and judgment which the Company may be required to
pay as a result of the  Distributor's  performance  of its duties  thereunder in
violation thereof.

16.      Miscellaneous Provisions.

16.1     Controlling  Law. This Agreement is made with reference to and shall be
construed in  accordance  with the law of the Hong Kong  Special  Administration
Region.  The  Parties  acknowledge  and agree that this  Agreement  shall not be
subject to the provisions of the United Nations  Convention on Contracts for the
International Sale of Goods.

16.2     Arbitration. Any disputes or controversies arising under this Agreement
shall be determined  by binding  arbitration  in  accordance  with the rules and
procedures for arbitration in Hong Kong, which arbitration shall be conducted in
Honolulu,  Hawaii.  Each party shall bear its own costs of the  arbitration  and
shall pay one half cost of the costs of the  establishment  and operation of the
arbitration tribunal.

<PAGE>

                                     - 9 -

16.3     Notices. All notices,  request, demands, and other communications given
under this  Agreement  shall be in English  and shall be in writing and shall be
deemed to have been duly given at the time of delivery, if personally delivered,
or seventy-two  (72) hours after delivery to an appropriate  courier service and
addressed to the parties at the addresses  set forth  beneath  their  respective
signatures  or at such  other  address as a party may  designate  at any time in
writing by notice to the other in accordance with this Subsection 16.3.

16.4     Waiver and  Modification.  The  failure of either  party at any time to
require strict  performance of any provision of this Agreement  shall not in any
manner  affect the right of such party at a later time to enforce  the same.  No
waiver by either  party of the breach of any term or covenant  contained in this
Agreement shall be deemed to be a release or affect any liability resulting from
such breach. No waiver of any nature, whether by conduct,  course of dealing, or
otherwise,  in any one or more instances shall be deemed to be or construed as a
continuing  waiver of any such condition or breach,  or as a waiver of any other
condition  or of any  other  breach  of any  other  term  or  covenant  of  this
Agreement.

16.5     Severability. If any provision of this Agreement is held and determined
to be invalid by any  arbitrator  or court  interpreting  such  provision,  such
arbitrator or court shall be entitled to modify or otherwise reduce the scope or
effect  of  such  offending  provision,  and to  enforce  such  provision  as so
modified,  provided that such modification does not materially modify the intent
of the  parties  in  entering  into this  Agreement.  If any  provision  of this
Agreement  cannot be so modified  without  offending  the intent of the parties,
such provision shall be deemed to be null and void, and the remaining provisions
of this  Agreement  shall  remain in full  force and  effect as if such  invalid
provision had not been included in the Agreement.

16.6     Successors in Interest.  This Agreement shall be binding upon and inure
to the benefit of the successors,  heirs, assigns, and personal  representatives
of the parties.

16.7     Assignment.  The  Distributor  may not assign or sublicense  any of its
rights or obligations under this Agreement nor shall the Distributor  appoint or
designate any subdistributor of the Products,  without the prior written consent
of the Company,  which  consent may be granted or withheld for any reason or for
no reason in the sole and  exclusive  judgment  of the  Company.  Any  attempted
assignment,  appointment or designation without the prior written consent of the
Company shall be null and void.

16.8     Entire Agreement.  This Agreement contains the entire agreement between
the parties with respect to the subject matter of this  Agreement.  There are no
representations,  warranties,  understandings,  or  agreements  other than those
expressly set forth herein.  Time is expressly  declared to be of the essence of
this Agreement.

16.9     Execution by Counterpart.  This Agreement may be executed separately or
independently  in any  number of  counterparts,  each and all of which  together
shall be deemed to have been executed  simultaneously and for all purposes to be
one agreement.

<PAGE>

                                     - 10 -

16.10    Captions.  The  respective  captions of the  Sections  are inserted for
convenience  of  reference  only and shall not be deemed to modify or  otherwise
affect in any respect any of the provisions hereof

         DATED the day and year first above written.

                                       PURE TECHNOLOGIES INC

                                       By: "James Paulson"
                                          --------------------------------------
                                       Its Chairman
                                          --------------------------------------

                                       Address:   #1050, 340 - 12 th Avenue S.W.
                                                  Calgary, Alberta
                                                  Canada T2R 1L5

                                       FUGRO GEOTECHNICAL SERVICES (HK)
                                       LIMITED

                                       By: "R. Wood"
                                          --------------------------------------
                                       Its Managing Director
                                          --------------------------------------

                                       Address:   Unit 10, 10/F Worldwide
                                                  Industrial Centre
                                                  43-47 Shan Mei Street, Fo Tan
                                                  Shatin, NT, Hong Kong

<PAGE>

                                      -11 -

                         SUB-DISTRIBUTORSHIP AGREEMENT

         THIS  SUB-DISTRIBUTORSHIP  AGREEMENT  ("Agreement") is made and entered
into  as of  this  16th  Day of  April,  2000,  by  and  between  FUGRO  LIMITED
("Distributor")  and TRANSPORT  RESEARCH  LABORATORY  ("Sub-Distributor").  This
Sub-Distributorship  Agreement is made with the  agreement of PURE  TECHNOLOGIES
INC. of Calgary Alberta ("Company").

         In consideration  of the mutual covenants and undertakings  hereinafter
set forth, the parties agree as follows:

17.      Appointment

The Distributor hereby appoints the  Sub-Distributor as its non-exclusive  sales
representative in the Territory, as defined in Section 2 of this Agreement,  and
the  Sub-Distributor  hereby accepts such appointment,  to sell the products and
licenses  of the  Company  (the  "Products")  in  accordance  with the terms and
conditions of this Agreement.

The Distributor appoints the Sub-Distributor as the exclusive Sub-Distributor in
the Highway Sector, and  non-exclusively in the Transport Sector.  Such projects
will be  identified  in writing on an  individual  basis,  and  acknowledged  in
writing by the Distributor to be "Projects initiated by the Sub-Distributor.

18.      Territory & Markets

The  Sub-Distributor  shall have the non-exclusive right to sell the products in
the geographic  area described as follows:  United  Kingdom  including  England,
Northern  Ireland,  Scotland  and  Wales  ("Territory").  The  Territory  may be
modified from time to time by the prior written agreement of the parties.

19.      Term

The term of this Agreement shall commence on the date first above written,  and,
unless terminated  earlier as provided in Section 14, shall continue for one (1)
year  terminating  upon the first  anniversary  of such date,  provided that the
Agreement  shall  thereafter  be  renewed  without  action by  either  party for
successive periods of one (1) year each,  subject to the termination  provisions
of Section 13,  unless  either  party gives  written  notice  objecting  to such
renewal at least  sixty (60) days prior to the  expiration  of the then  current
one-year term.

20.      Covenants and Undertaking of the Sub-Distributor

The Sub-Distributor covenants and agrees as follows:

20.1     To use  reasonable  efforts,  to  promote  sales of the  Products.  The
Sub-Distributor  further  agrees that it will refrain from  soliciting  sales or
otherwise promoting sales of the Products outside the Territory, except where it
has a separate  distributorship  agreement with the Company.  These  obligations
include, without limitation, the following:

         (a)      Specific  Promotion  Efforts.  All  advertising or promotional
                  materials,  if  any,  utilized  by  the  Sub-Distributor,  its
                  agents, or employees in conjunction with the

<PAGE>

                                     - 12 -

                  sale of the Products,  other than such sales  literature as is
                  furnished to the Sub-Distributor by the Distributor,  shall be
                  approved in writing by the Company and the Distributor,  prior
                  to its use or dissemination.

         (b)      Follow-up on Leads. All leads obtained by the  Sub-Distributor
                  for sales of Products outside the Territory shall be forwarded
                  to the Distributor,  who will forward them to the Company. The
                  Sub-Distributor  will  produce  and update a Sales & Marketing
                  plan, with targets.  The Distributor and Sub-Distributor  will
                  meet  regularly to  co-ordinate  marketing  effort between the
                  Sub-Distributor  and the Distributor,  and to review the Sales
                  and Marketing Plan.

         (c)      Visits by the Company.  The  Distributor  shall have the right
                  upon   reasonable    notice   to   visit   and   observe   the
                  Sub-Distributor's  place  of  business  and to  accompany  the
                  Sub-Distributor   during   sales  or   servicing   calls  with
                  customers.  Additionally,  the  Distributor  agrees  that  the
                  Company  may, at any time during  reasonable  business  hours,
                  review and inspect the service facilities for the Products.

         (d)      Customer  Complaints.  The Sub-Distributor and the Distributor
                  each  agree  to  cooperate  fully  in  dealing  with  customer
                  complaints  concerning the Products and to take such action to
                  resolve such complaints as may be requested by the Distributor
                  or the Company.  In this regard, the  Sub-Distributor  and the
                  Distributor  each agree promptly to furnish the other with any
                  information  that may be  required by the other to comply with
                  any  governmental  laws or regulations or that may be required
                  to  minimize  the  potential  impact of a recall of any of the
                  Products.

         (e)      Traceability.  The Sub-Distributor shall comply to the best of
                  its ability with any and all traceability programmes in effect
                  at any time as initiated by the Distributor.

         (f)      Financial  and  Credit  Information.  If so  requested  by the
                  Distributor,  the  Sub-Distributor  agrees to  provide  to the
                  Distributor   with  adequate   financial   information   on  a
                  confidential  basis and if  requested  credit  references,  to
                  assure  the  Distributor  of  the  Sub-Distributor's   ongoing
                  financial capacity to conduct its business.

20.2     The parties hereto  acknowledge that Pure  Technologies are [IS] expert
in acoustic  monitoring  of failure of tensioned  reinforcements,  including the
main cables and suspender  ropes of suspension  bridges and the  stay-cables  of
cable-stayed bridges.

                  The  Sub-Distributor  agrees not to compete in this  technical
                  specialism  in the area  defined  within  Clause 2  Territory,
                  during  the period of this  agreement  and for a period of two
                  years after the termination of the agreement.

20.3     To refrain from any  expenditure  on behalf of the  Distributor  and/or
Company,  or from incurring any liability in the name of the Distributor  and/or
Company, without the prior written consent of the Distributor and/or Company.

<PAGE>

                                     - 13 -

20.4     To use  its  best  efforts  to  promote,  safeguard,  and  protect  the
interests of the  Distributor and the Company,  and the Company's  rights to the
Products, consistent with the best business practices.

21.      Compensation

21.1     Payment

         (a)      For sales delivered within the Territory, based upon orders on
                  'Projects initiated by the  Sub-Distributor',  the Distributor
                  will provide the system to the  Sub-Distributor  at the normal
                  Company    selling   price   of   the   Products    (excluding
                  installation),  less  a  discount  of  fifteen  (15%)  percent
                  commission.

         (b)      For sales delivered within the Territory, based upon orders on
                  'Products   initiated  by  the   Distributor'  and  for  which
                  compensation  to the  Sub-Distributor  is  owing,  subject  to
                  specific  arrangements  as  agreed  on a case  by  case  basis
                  between the Distributor and  Sub-Distributor,  the Distributor
                  will make a payment  to the  Sub-Distributor  a sum of fifteen
                  (15%)  percent  of the  normal  Company  selling  price of the
                  Products.  Payment will become owing after  receipt of payment
                  by the  Distributor  for such a sale,  and will become due and
                  payable within 10 days of when such payment is received.

         (c)      In any  event,  when  either  clause  5.1(a)  or 5.1(b) is not
                  directly   applicable,   other  arrangements  for  payment  of
                  compensation to the  Sub-Distributor by the Distributor can be
                  made as otherwise agreed.

22.      Terms of Sales

22.1     Price of Products

The prices at which the Products are to be sold by the Distributor will be fixed
by the Distributor,  subject to change by the Distributor from time to time, and
communicated  to  the   Sub-Distributor   for  each  Project  initiated  by  the
Sub-Distributor,  with a stated period of validity.  For purposes of calculating
the  percentages  described in Section 5, the prices will exclude all applicable
sales and excise taxes.  In the event the Company  grants  discounts  based upon
quantity purchases or otherwise,  the percentage  compensation to be paid to the
Distributor  will be based  upon the actual  discounted  price at which the sale
occurs, rather than the normal selling price.

22.2     Purchase Orders

All purchase  orders shall be subject to acceptance by the  Distributor  and the
Company.  No  purchase  order  shall  be  binding  upon  the  Distributor  until
acceptance by the Distributor is communicated to the Sub-Distributor.

22.3     Payment Terms

The Sub-Distributor  agrees that all purchase orders,  which it procures for the
Company  for direct  shipment  to the  purchaser,  shall be payable by Letter of
Credit or  certified  funds,  or other  terms  acceptable  to the  Company.  All
Products sold shall be shipped CIF as defined by INCOTERMS,

<PAGE>

                                     - 14 -

1980 edition, unless otherwise agreed in writing.  Purchase Orders placed by the
Sub-Distributor  shall be payable 60 days from the date of the Company's invoice
for the Products.

23.      Delivery of Products

23.1     Delivery of Products

All Products will be delivered by common carrier unless  otherwise  specified in
the  purchase  order.  The  Distributor  will not be liable for any delay in the
performance of its  obligations in the delivery or shipment of the Products,  or
for any damage  suffered by any  purchaser or the  Sub-Distributor  by reason of
such delay,  when such delay is, directly or indirectly,  caused by or in any in
any manner  arising from fires,  floods,  accidents,  riots,  acts of God,  war,
governmental interference,  embargoes, strikes, labor difficulties,  shortage of
labor, fuel, power,  materials or supplies,  transportation delays, or any other
cause or causes  (whether  or not  similar  in  nature to any of the  foregoing)
beyond the Company's control.  All orders are accepted by the Company subject to
the Company's  ability to obtain the necessary raw materials,  and all orders or
contracts as well as shipments  are subject to government  regulations,  orders,
directives, and restrictions which may be in effect from time to time.

24.      Confidentiality

24.1     Confidential Information

The  Sub-Distributor  shall keep confidential the details of the Agreement,  all
data, data bases, computer programs, marketing plans and information provided to
Sub-Distributor  by or on behalf of the Distributor or the Company in connection
with the  Agreement  or  Products  and all other  confidential  and  proprietary
information of the  Distributor or the Company,  now existing or to be developed
in the firm (such information is intended to include all information of any kind
whatsoever  related to the  Distributor's  or  Company's  business  which is not
generally and publicly  known,  including  information  received  orally or by a
confidential writing which, prior to such receipt, was non-public information of
such recipient) (collectively the "Information"), and all Information (including
data  generated by operation of the Products)  developed by the operation of the
Products,  and shall not disclose the Agreement or any such  Information  to any
person,  firm, entity or corporation without the prior written permission of the
Distributor.  The Sub-Distributor  shall be bound by an obligation of confidence
to the  Distributor  and Company in respect of any Information or trade secrets.
In respect of such Information, the Sub-Distributor shall not:

         (i)      disclose, either directly or indirectly, any such Information,
                  or any part thereof to any person, firm, corporation or entity
                  except as is specifically contemplated in this Agreement; and

         (ii)     may not use any such Information,  or any part thereof for any
                  purpose  except as is  specifically  contemplated  within this
                  Agreement.

24.2     Trade Secrets

Upon  the  termination  of  this  Agreement  for  any  reason  whatsoever,   the
Sub-Distributor  shall  return  all  data,  prospectuses,  advertising,  and all
Information concerning the Products (including

<PAGE>

                                     - 15 -

all  software,  copies of test  results  and other  data  accumulated),  and the
Sub-Distributor  shall not make further use of any of the materials or technical
information,  nor  disclose or use such  materials  or  Information  for its own
account or on behalf of any other  person or entity.  Upon  termination  of this
Agreement for any reason, the  Sub-Distributor  shall discontinue the use of the
Distributor's  and  Company's  trade  names,  trademarks,   labels,  copyrights,
patents,  and other advertising media and remove all signs and displays relating
thereto.

25.      Intellectual Property

No rights  are  granted  hereunder  to the  Sub-Distributor  under any  patents,
copyrights, Information, trademarks or other intellectual property rights except
as are incidental  only to the sale of Products by the Distributor and the right
to use such Products by the Distributor's customer.

Whenever the  Sub-Distributor  shall make reference to its relationship with the
Distributor   and   Company,   whether  in   advertising   or   otherwise,   the
Sub-Distributor shall describe its relationship only as a Sub-Distributor of the
Products.  Any  other  use  by the  Sub-Distributor  of  the  Distributor's  and
Company's  trade  name,  trademark,  or any  other  trade  names  or  trademarks
associated  with the  Products  must be approved in advance in writing by a duly
authorized officer of the Distributor and Company. The Sub-Distributor shall not
use any trademark or trade name of the  Distributor and Company or any variation
thereof alone or in combination with other words, in connection with any product
which has not been supplied by the Distributor  and Company,  or as a part of or
in connection with the  Sub-Distributor's  corporate  name. The  Sub-Distributor
shall not register the  Distributor or Company's trade name or trademarks or any
other trade names or trademarks  associated  with the Products in the Territory.
All data generated from use of the Products and any  suggestions,  improvements,
enhancements,  derivative works or modifications  made to any of the Products or
any part there of shall be the property of the Company  including any copyright,
patent or other intellectual  property rights therein. The Sub-Distributor shall
sign such  documents,  assignments  or  agreements as the Company may require to
protect the Company's rights therein.

26.      Limited Warranty and Limitations

26.1     The Company  provides to its customers only those warranties set out in
the Company's  form of agreements and subject to the limits on liability set out
in such  agreements.  On a case by case  basis the  Company  may  provide  other
warranty terms or other limits on liability but only if previously authorized by
the Company in writing. NO OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO ANY IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, IS MADE.

26.2     The  Distributor  and the Company  shall not have any  liability of any
kind under this contract unless the Sub-Distributor notifies the Distributor and
thereby the Company of any claimed defect within the warranty  period  specified
in the Distributor's form of agreement as measured from the date of delivery. If
a Product is to be returned to the Distributor,  written  authorization  must be
obtained from the Distributor,  and the Distributor's shipping instructions must
be followed. If the claimed defect is a result of misuse, mishandling,  abnormal
conditions of application or storage, or the result or unauthorized  alteration,
the  cost  of  replacement  and all  related  expenses  shall  be  borne  by the
Sub-Distributor.  Any Products  returned to the  Distributor  for replacement or
refund shall become the property of the Distributor.

<PAGE>

                                     - 16 -

26.3     The  Sub-Distributor,  its  agents,  and  employees  shall not make any
statement,  representation,  warranty, or advertisement  concerning the Products
which exceed in scope or are different in meaning from the limited  warranty set
forth  in  Section  10.1.  The  Sub-Distributor  shall  indemnify  and  hold the
Distributor and the Company harmless against any claims,  liability,  costs, and
expenses  of any nature  which the  Distributor  and the  Company may incur as a
result of any such activities.

27.      Modification of Products and Labeling.  The Sub-Distributor  shall not,
without  the prior  written  consent of the Company in each  instance  obtained,
modify the Products or any part thereof or modify,  remove, cover, or add to the
labels affixed by the Company to the Products.

28.      Patent.  If a patent  infringement  action is commenced  or  threatened
against the Company as to one or more of the Products, and the Company elects to
discontinue  the sale of any such  Products  in any part of the  Territory,  the
Sub-Distributor  shall discontinue its efforts to sell such Products in any such
part of the Territory  immediately  upon receipt of written notice thereof' from
the Company.

29.      Termination

29.1     The  Distributor may terminate this Agreement by giving forty five (45)
days written notice in the following events:

         (a)      Sub-Distributor  has ceased to function as a going  concern or
                  conduct its  operations  in the normal course of business as a
                  distributor;

         (b)      Sub-Distributor   enters  into  suspension  of  payments,   or
                  commences or becomes the subject of, any action in relation to
                  bankruptcy,   insolvency,   reorganization,   dissolution,  or
                  winding up;

         (c)      Sub-Distributor has become insolvent;

         (d)      Sub-Distributor  has made a general assignment for the benefit
                  of creditors;

         (e)      Sub-Distributor has attempted to assign,  convey, or otherwise
                  transfer in whole or in part any of  Sub-Distributor's  rights
                  hereunder to any third party without the  Distributor's  prior
                  written  consent based on  Sub-Distributor's  full,  true, and
                  correct   disclosure  of  the  proposed   transaction  to  the
                  Distributor;

         (f)      any material change in the general management,  ownership,  or
                  control including sale, transfer, or by Sub-Distributor of any
                  substantial  interest in the  ownership  of the business to be
                  carried on by  Sub-Distributor  under this  Agreement,  unless
                  such  changes  are  approved  in advance and in writing by the
                  Distributor;

         (g)      conviction  of  Sub-Distributor  or any  principal  officer or
                  manager  of  Sub-Distributor  for any crime  tending to affect
                  adversely the ownership or operation of the business;

         (h)      Sub-Distributor  provides falsified data or information to the
                  Distributor; or

<PAGE>

                                     - 17 -

         (i)      Sub-Distributor breaches any of the obligations under Sections
                  8.1 or 8.2  respecting  Information  or  Section 9  respecting
                  intellectual property. The Sub-Distributor hereby acknowledges
                  that forty five (45) days is a reasonable and adequate  period
                  of notice under the circumstances, including the extent of the
                  expenditures, investments, and commitments made and to be made
                  by Sub-Distributor under this Agreement.

29.2     In the event either party commits a material  breach of this  Agreement
and such party fails to remedy such default within sixty (60) days of receipt of
written  notice  thereof from the opposite  party,  the party giving such notice
may, at any time thereafter upon written notice,  terminate this Agreement.  The
Sub-Distributor  hereby  acknowledges  that sixty (60) days is a reasonable  and
adequate period of notice under the  circumstances,  including the extent of the
expenditures,   investments,   and   commitments   made   and  to  be   made  by
Sub-Distributor under this Agreement.

29.3     Either  party may  terminate  this  Agreement  without  cause  upon the
expiration of a ninety (90) day period after giving  written  notice  thereof to
the other party. The  Sub-Distributor  hereby acknowledges that ninety (90) days
is a reasonable and adequate period of notice under the circumstances, including
the extent of the expenditures, investments, and commitments made and to be made
by Distributor under this Agreement.

29.4     In the  event  of  termination  of this  Agreement,  whether  upon  the
expiration  of the term of this  Agreement  or  pursuant  to the  provisions  of
Section  13.1,  13.2,  or 13.3,  the  Distributor  shall  not be  liable  to the
Sub-Distributor  for compensation,  reimbursement,  or damages on account of the
loss of prospective profits on anticipated sales, or on account of expenditures,
investments,  leases, employee termination pay, or other commitments or expenses
relating to the business or goodwill of the Sub-Distributor.

29.5     Termination  of  this  Agreement  shall  not  relieve  or  release  the
Sub-Distributor  from any payments the  Sub-Distributor  may owe the Distributor
under the terms of this Agreement.

29.6     Acceptance by the  Distributor  of any orders from the  Sub-Distributor
after  termination  of this  Agreement  shall,  not constitute a renewal of this
Agreement or a waiver of the right of the Distributor to treat this Agreement as
terminated.

29.7     Notwithstanding  anything contained herein to the contrary,  Sections 8
and 9 of this  Agreement  shall survive  termination of this Agreement and shall
remain in fall force and effect.

30.      Relationship

The  Sub-Distributor  is  an  independent  organization.  Nothing  herein  shall
constitute the  Sub-Distributor as an employee or agent of the Distributor,  nor
the legal  representative  of the  Distributor for any purpose or reason not set
forth  herein.  The  Sub-Distributor  does not have the  authority  to assume or
create any  obligation,  express or implied,  on behalf of or in the name of the
Distributor,  or to bind the  Distributor  in any manner  whatsoever,  except as
authorized in writing by the Distributor.  The  Sub-Distributor  shall be solely
responsible  for the  operations of its business and all costs  incurred in such
operations,  solely responsible for any injury,  liabilities, or damage incurred
in the conduct of its business, for complying with all laws and regulations of

<PAGE>

                                     - 18 -

the nation, state, and political subdivision in which it transacts its business,
and shall bear all expenses in connection therewith. It is the express intent of
the parties, pursuant to their right to freedom of contract, that this Agreement
shall  govern  the  obligations  of each to the  other  and  the  right  of each
resulting from such relationship and that no Ordinance,  Regulation or any other
law  purporting  to alter  the  relationship  between  the  Distributor  and the
Sub-Distributor,  presently  in force or  hereafter  enacted,  may  apply to the
rights and  obligations  of and between the parties  under this  Agreement.  The
rights  and  obligations  of the  parties  in the event of  termination  of this
Agreement have been  separately  bargained for, and are intended by both parties
to be in  lieu  of any  rights  or  obligations  arising  under  any  Ordinance,
Regulation or any other law purporting to alter the relationship of the parties.

31.      Compliance with Law

The Sub-Distributor shall comply with all prevailing laws and regulations of the
Territory pertaining to the importation,  distribution,  sales,  promotion,  and
marketing  of  the  Products  in the  Territory  and  in  any  manner  otherwise
pertaining to performance by the  Sub-Distributor  of its obligations under this
Agreement.  The Sub-Director shall accept and assume full responsibility for any
and all civil or criminal liabilities and costs that may be assessed as a result
of the  Sub-Distributor's  performance  or  Sub-Distributor's  duties under this
Agreement  and shall hold harmless and defend the  Distributor  from and against
any and all fines,  damages,  levies,  costs, and judgment which the Distributor
may be required to pay as a result of the  Sub-Distributor's  performance of its
duties thereunder in violation thereof.

32.      Miscellaneous Provisions

32.1     Controlling  Law. This Agreement is made with reference to and shall be
construed in accordance  with the laws of the England.  The Parties  acknowledge
and agree that this  Agreement  shall not be subject  to the  provisions  of the
United Nations Convention on Contracts for the International Sale of Goods.

32.2     Arbitration. Any disputes or controversies arising under this Agreement
shall be determined  by binding  arbitration  in  accordance  with the rules and
procedures for arbitration in England,  which  arbitration shall be conducted in
London England. Each party shall bear its own costs of the arbitration and shall
pay one  half  cost of the  costs  of the  establishment  and  operation  of the
arbitration tribunal.

32.3     Notices. All notices,  request, demands, and other communications given
under this  Agreement  shall be in English  and shall be in writing and shall be
deemed to have been duly given at the time of delivery, if personally delivered,
or seventy-two  (72) hours after delivery to an appropriate  courier service and
addressed to the parties at the addresses  set forth  beneath  their  respective
signatures  or at such  other  address as a party may  designate  at any time in
writing by notice to the other in accordance with this Subsection 16.3.

32.4     Waiver and  Modification.  The  failure of either  party at any time to
require strict  performance of any provision of this Agreement  shall not in any
manner  affect the right of such party at a later time to enforce  the same.  No
waiver by either  party of the breach of any term or covenant  contained in this
Agreement shall be deemed to be a release or affect any liability resulting from
such breach. No waiver of any nature, whether by conduct, course of dealing, or

<PAGE>

                                     - 19 -

otherwise,  in any one or more instances shall be deemed to be or construed as a
continuing  waiver of any such condition or breach,  or as a waiver of any other
condition  or of any  other  breach  of any  other  term  or  covenant  of  this
Agreement.

32.5     Severability. If any provision of this Agreement is held and determined
to be invalid by any  arbitrator  or court  interpreting  such  provision,  such
arbitrator or court shall be entitled to modify or otherwise reduce the scope or
effect  of  such  offending  provision,  and to  enforce  such  provision  as so
modified,  provided that such modification does not materially modify the intent
of the  parties  in  entering  into this  Agreement.  If any  provision  of this
Agreement  cannot be so modified  without  off-ending the intent of the parties,
such provision shall be deemed to be null and void, and the remaining provisions
of this  Agreement  shall,  remain in full force and  effect as if such  invalid
provision had not been included in the Agreement.

32.6     Successors in Interest.  This Agreement shall be binding upon and inure
to the benefit of the successors,  heirs, assigns, and personal  representatives
of the parties.

32.7     Assignment. The Sub-Distributor may not assign or sublicense any of its
rights or  obligations  under  this  Agreement,  nor  shall the  Sub-Distributor
appoint or designate any  subordinate  distributor of the Products,  without the
prior  written  consent  of the  Distributor,  which  consent  may be granted or
withheld for any reason or for no reason in the sole and  exclusive  judgment of
the Distributor.  Any attempted assignment,  appointment, or designation without
the prior written consent of the Distributor shall be null and void.

32.8     Entire Agreement.  This Agreement contains the entire agreement between
the parties with respect to the subject matter of this  Agreement.  There are no
representations,  warranties, or agreements other than those expressly set forth
herein. Time is expressly declared to be of the essence of this Agreement.

32.9     Execution by Counterpart.  This Agreement may be executed separately or
independently  in any number of  counterparts,  each and all, of which  together
shall be deemed to have been executed  simultaneously and for all purposes to be
one agreement.

32.10    Captions.  The  respective  captions of the  Sections  are inserted for
convenience  of  reference  only and shall not be deemed to modify or  otherwise
affect in any respect any of the provisions hereof.

33.      Communication

The routing of all  communication  related to the sale and services  with the UK
will be guided by the need to provide swift and  meaningful  response to the end
user's requirements.

All routine correspondence from the Sub-Distributor to the Company related to UK
projects shall be routed via the Distributor.  However,  when there is a benefit
in  direct   communication   between  the   Company  and  the   Sub-Distributor,
correspondence shall be simultaneously copied to the Distributor.

The Distributor  reserves the right to require that all  correspondence  between
the Company and the  Distributor  related to UK projects and after sales service
should be routed via the Distributor.

<PAGE>

                                     - 20 -

DATED the day and year first above written.

                                       TRANSPORT RESEARCH
                                       LABORATORY

                                       By: "S.D. Rea"
                                          --------------------------------------
                                       Its Programme Manager
                                          --------------------------------------

                                       Address:   Old Wokingham Road
                                                  Crowthorne
                                                  Berks. RG45 6AU

                                       FUGRO LIMITED

                                       By: "David Youdan"
                                          --------------------------------------
                                       Its Division Head
                                          --------------------------------------

                                       Address:   18 Frogmore Road
                                                  Hemel Hempstead
                                                  Herts. HP3 9RT

                                       PURE TECHNOLOGIES INC.

                                       By: "J. Elliott"
                                          --------------------------------------
                                       Its Vice President/General Manager
                                          --------------------------------------

                                       Address:   1050, 340 - 12 th Avenue S.W.
                                                  Calgary
                                                  Alberta T2R 1L5

<PAGE>

                                     - 21 -

                           DISTRIBUTORSHIP AGREEMENT

         THIS DISTRIBUTORSHIP  AGREEMENT  ("Agreement") is made and entered into
as of this 1st Day of December,  1997, by and between PURE  TECHNOLOGIES INC, OF
CALGARY, ALBERTA ("Company"), and FUGRO LIMITED ("Distributor").

         In consideration  of the mutual covenants and undertakings  hereinafter
set forth, the parties agree as follows:

34.      Appointment

         The Company  hereby  appoints the  Distributor  as its exclusive  sales
representative in the Territory, as defined in Section 2 of this Agreement,  and
the  Distributor  hereby  accepts  such  appointment,  to sell the  products and
licenses  of the  Company  (the  "Products")  in  accordance  with the terms and
conditions of this  Agreement.  The use of the term sales of Products or similar
terms in this Agreement shall refer to sales of products and sale of licenses to
use the data acquisition software associated with the use of the products.

35.      Territory.

         The Distributor  shall have the exclusive right to sell the products in
the geographic  area described as follows:  United  Kingdom  including  England,
Northern  Ireland,  Scotland  and  Wales  ("Territory").  The  Territory  may be
modified from time to time by the prior written agreement of the parties.

36.      Term.

         The term of this  Agreement  shall  commence  on the date  first  above
written,  and,  unless  terminated  earlier as  provided  in Section  14,  shall
continue for one (1) year terminating  upon the first  anniversary of such date,
provided that the Agreement shall thereafter be renewed without action by either
party for successive  periods of one (1) year each,  subject to the  termination
provisions of Section 13, unless either party gives written notice  objecting to
such  renewal  at least  sixty  (60) days  prior to the  expiration  of the then
current one-year term.

37.      Covenants and Undertakings of Distributor

         The Distributor covenants and agrees as follows:

37.1     To use its best  efforts,  and to spend as much time and as much of its
resources as may reasonably be required,  to promote sales of the Products.  The
Distributor  further  agrees  that it will  refrain  from  soliciting  sales  or
otherwise  promoting  sales  of  the  Products  outside  the  Territory.   These
obligations include, without limitation, the following:

         (a)      Registration and Licensure.  The Distributor agrees to use its
                  best efforts to promptly obtain from the proper authorities in
                  the Territory at its own cost and expense,  all registrations,
                  licenses,  and approvals  required for the import,  sales, and
                  distribution  by  the  Distributor  of  the  Products  in  the
                  Territory.

<PAGE>

                                     - 22 -

         (b)      Specific  Promotion  Efforts.  The  Distributor  shall, at its
                  expense,  distribute sales literature describing the Products,
                  which  the  Company  shall  provide,  promote  the sale of the
                  Products through trade publications,  and exhibit the Products
                  at exhibitions at which products of the same or similar nature
                  are exhibited.  All advertising or promotional  materials,  if
                  any, utilized by the Distributor,  its agents, or employees in
                  conjunction  with the sale of the  Products,  other  than such
                  sales  literature  as is furnished to the  Distributor  by the
                  Company,  shall be approved in writing by the Company prior to
                  its use or dissemination.

         (c)      Follow-up on Leads.  All leads furnished to the Distributor by
                  the Company shall be contacted  within a reasonable time and a
                  report of the  results  of such  contacts  shall be  submitted
                  promptly to the Company. All leads obtained by the Distributor
                  for sales of Products outside the Territory shall be forwarded
                  to the Company.

         (d)      Visits by the Company.  The Company  shall have the right upon
                  reasonable notice to visit and observe the Distributor's place
                  of business and to accompany the  Distributor  during sales or
                  servicing   calls  or  training   sessions   with   customers.
                  Additionally,  the Distributor agrees that the Company may, at
                  any time during reasonable  business hours, review and inspect
                  the service facilities for the Products.

         (e)      Customer  Complaints.  The  Distributor  and the Company  each
                  agree to cooperate  fully in dealing with customer  complaints
                  concerning  the  Products  and to take such  action to resolve
                  such  complaints  as may be requested by the Company.  In this
                  regard, the Distributor and the Company each agree promptly to
                  furnish the other with any information that may be required by
                  the other to comply with any governmental  laws or regulations
                  or that may be required to minimize the potential  impact of a
                  recall of any of the Products.

         (f)      Traceability.  The Distributor shall comply to the best of its
                  ability with any and all traceability  programmes in effect at
                  any time as initiated by the Company.

         (g)      Financial  and  Credit  Information.  If so  requested  by the
                  Company,  the  Distributor  agrees to provide  to the  Company
                  adequate financial  information on a confidential basis and if
                  requested  credit  references,  to assure  the  Company of the
                  Distributor's   ongoing  financial  capacity  to  conduct  its
                  business.

37.2     The parties hereto  acknowledge  that Pure  Technologies  are expert in
acoustic monitoring of failure of tensioned  reinforcements,  including the main
cables  and  suspender  ropes  of  suspension  bridges  and the  stay-cables  of
cable-stayed  bridges.  The  parties  also  acknowledge  that  Fugro  Structural
Monitoring are expert in instrumentation of structures for acceleration, strain,
displacement These two are areas of expertise are exclusive and complementary.

         The Company and the  Distributor  agree not to compete in the technical
specialism of the other,  in the area defined within Clause 2 Territory,  during
the period of this agreement and for a period of two years after the termination
of the agreement

<PAGE>

                                     - 23 -

37.3     To  refrain  from any  expenditure  on behalf of the  Company,  or from
incurring  any  liability in the name of the Company,  without the prior written
consent of the Company.

37.4     To use  its  best  efforts  to  promote,  safeguard,  and  protect  the
interests of the Company,  and the Company's rights to the Products,  consistent
with the best business practices.

38.      Compensation

38.1     Percentage of Sales.

         The  Company  will  pay the  Distributor  compensation  based  upon the
following:

         (a)      For sales  delivered  within the Territory,  based upon orders
                  procured by the Distributor  and/or enquiries  referred to the
                  Company  by the  Distributor,  the  Company  will allow to the
                  Distributor  a discount of twenty  percent (20%) of the normal
                  selling price of the Products.

         (b)      For sales delivered  outside the Territory,  based upon orders
                  procured by the Distributor within the Territory,  ten percent
                  (10%) of the net  collected  prices at which the  Products are
                  sold.

         (c)      For any order which is not  procured by the  Distributor,  but
                  which is delivered  into the  Territory,  five percent (5%) of
                  the net collected prices at which the Products are sold.

         For the purposes of this Section 5.1 "net  collected  prices" means the
amounts actually  received by the Company for the sale of such Products less any
discounts or commissions paid to a third party in respect of such sale.

38.2     Payment.

         The  Compensation to the  Distributor  for each sale under  Sub-section
5.1(b) and 5.l(c) will become owing after  receipt of payment by the Company for
such sale, and will become due and payable at the end of the calendar quarter in
which such payment is received.

39.      Terms of Sales.

39.1     Price of Products.

         The prices at which the  Products are to be sold by the Company will be
fixed by the Company,  subject to change by the Company  from time to time,  and
communicated to the Distributor at periodic intervals.  Such price changes shall
be effective  thirty (30) days after the date of written  notice  thereof to the
Distributor.  Any order or  written  quote  from the  Distributor  received  and
accepted by the  Company  prior to a price  increase  on Products  which are the
subject  of any such  order or  written  quote  shall be shipped at the price in
effect at the time of  acceptance  of such  order or quote by the  Company.  For
purposes of  calculating  the  percentages  described in  Subsections  5.l.b and
5.1.c,  the prices will exclude all  applicable  sales and excise taxes.  In the
event the Company grants discounts based upon quantity purchases or otherwise,

<PAGE>

                                     - 24 -

the percentage compensation to be paid to the Distributor will be based upon the
actual discounted price at which the sale occurs, rather than the normal selling
price.

39.2     Purchase Orders.

         All purchase  orders shall be subject to acceptance by the Company.  No
purchase order shall be binding upon the Company until acceptance by the Company
is communicated to the Distributor.

39.3     Payment Terms.

         The  Distributor  agrees that all purchase orders which it procures for
the Company for direct  shipment to the purchaser  shall be payable by Letter of
Credit or  certified  Rinds,  or other  terms  acceptable  to the  Company.  All
payments  shall be made in United  States  Dollars.  All Products  sold shall be
shipped CIF as defined by INCOTERMS,  1980 edition,  unless  otherwise agreed in
writing.  Purchase  Orders  placed by the  Distributor  on the Company  shall be
payable 60 days from the date of the Company's invoice for the Products.

40.      Delivery of Products.

40.1     Delivery of Products.

         All  Products  will  be  delivered  by c on  carrier  unless  otherwise
specified in the purchase order. The Company will not be liable for any delay in
the  performance of its obligations in the delivery or shipment of the Products,
or for any damage suffered by any purchaser or the Distributor by reason of such
delay,  when such delay is,  directly or indirectly,  caused by or in any manner
arising from fires,  floods,  accidents,  riots, acts of God, war,  governmental
interference,  embargoes, strikes, labor difficulties,  shortage or labor, fuel,
power,  materials,  or supplies,  transportation  delays,  or any other cause or
causes  (whether  or not similar in nature to any of the  foregoing)  beyond the
Company's  control.  All  orders  are  accepted  by the  Company  subject to the
Company's  ability  to obtain the  necessary  raw  materials,  and all orders or
contracts as well as shipments  are subject to government  regulations,  orders,
directives, and restrictions which may be in effect from time to time.

41.      Confidentiality.

41.1     Confidential Information

         Distributor  shall keep  confidential  the  Agreement,  all data,  data
bases,   computer  programs,   marketing  plans  and  information   provided  to
Distributor  by or on behalf of the Company in connection  with the Agreement or
Products and all other confidential and proprietary  information of the Company,
now existing or to be developed in the future (such  information  is intended to
include all information of any kind whatsoever related to the Company's business
which is not generally and publicly known, including information received orally
or by a  confidential  writing  which,  prior  to such  receipt  was  non-public
information  of  such  recipient)  (collectively  the  "Information"),   and  an
Information (including data generated by operation of the Products) developed by
the operation of the Products,  and shall not disclose the Agreement or any such
Information to any person, firm, entity or corporation without the prior

<PAGE>

                                     - 25 -

written  permission of the Company.  Distributor shall be bound by an obligation
of confidence to the Company in respect of any Information or trade secrets.  In
respect of such Information, Distributor shall not:

         (a)      disclose, either directly or indirectly, any such Information,
                  or any part  thereof,  to any  person,  firm,  corporation  or
                  entity  except  as  is   specifically   contemplated  in  this
                  Agreement; and

         (b)      may not use any such Information, or any part thereof, for any
                  purpose  except as is  specifically  contemplated  within this
                  Agreement.

41.2     Trade Secrets.

         Upon the termination of this Agreement for any reason  whatsoever,  the
Distributor  shall  return  all  data,   prospectuses,   advertising,   and  all
Information  concerning  the Products  (including  all software,  copies of test
results and other data accumulated),  and the Distributor shall not make further
use of any of the materials or technical  information,  nor disclose or use such
materials or Information for its own account or on behalf of any other person or
entity. Upon termination of this Agreement for any reason, the Distributor shall
discontinue the use of the Company's trade name, trademark,  labels, copyrights,
patents,  and other advertising media and remove all signs and displays relating
thereto.

42.      Intellectual Property

         No rights are  granted  hereunder  to  Distributor  under any  patents,
copyrights, Information, trademarks or other intellectual property rights except
as are incidental  only to the sale of Products by the Distributor and the right
to use such Products by the  Distributor's  customers.  Whenever the Distributor
shall  make  reference  to  its  relationship  with  the  Company,   whether  in
advertising or otherwise,  the Distributor  shall describe its relationship only
as a  distributor  of the  Products.  Any  other use by the  Distributor  of the
Company's  trade  name,  trademark,  or any  other  trade  names  or  trademarks
associated  with the  Products  must be approved in advance in writing by a duly
authorized  officer of the Company.  The Distributor shall not use any trademark
or trade name of the Company or any variation  thereof,  alone or in combination
with other words,  in connection with any product which has not been supplied by
the company,  or as a part of or in connection with the Distributor's  corporate
or company name. The Distributor  shall not register the Company's trade name or
trademarks or any other trade names or trademarks  associated  with the Products
in  the  Territory.  All  data  generated  from  use  of the  Products  and  any
suggestions, improvements,  enhancements, derivative works or modifications made
to any of the Products or any part there of shall be the property of the Company
including any copyright,  patent or other intellectual  property rights therein.
Distributor shall sign such documents,  assignments or agreements as the Company
may require to protect the Company's rights therein.

43.      Limited Warranty and Limitations.

43.1     The Company  provides to its customers only those warranties set out in
the Company's  form of agreements and subject to the limits on liability set out
in such  agreements.  On a case by case  basis the  Company  may  provide  other
warranty terms or other limits on liability but only if

<PAGE>

                                     - 26 -

previously  authorized by the Company in writing. NO OTHER WARRANTY,  EXPRESS OR
IMPLIED,  INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OR MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, IS MADE.

43.2     The  Company  shall  not have any  liability  of any  kind  under  this
contract  unless  Distributor  notifies the Company of any claimed defect within
the warranty  period  specified in the  Company's  form of agreement as measured
from the date of  delivery.  If a  Product  is to be  returned  to the  Company,
written  authorization  must be obtained  from the  Company,  and the  Company's
shipping  instructions  must be followed.  If the claimed  defect is a result of
misuse,  mishandling,  abnormal  conditions of  application  or storage,  or the
result or  unauthorized  alteration,  the cost of  replacement  and all  related
expenses shall be borne by the Distributor. Any Products returned to the Company
for replacement or refund shall become the property of the Company.

43.3     The  Distributor,  its  agents,  and  employees  sha,11  not  make  any
statement,  representation,  warranty, or advertisement  concerning the Products
which exceed in scope or are different in meaning from the limited  warranty set
forth in Section  10.1.  The  Distributor  shall  indemnify and hold the Company
harmless against any claims, liability,  costs, and expenses of any nature which
the Company may incur as a result of any such activities.

44.      Modification  of Products  and  Labeling.  The  Distributor  shall not,
without  the prior  written  consent of the Company in each  instance  obtained,
modify the Products or any part thereof or modify,  remove, cover, or add to the
labels  affixed by the Company to the Products if requested by the  Distributor,
the Company shall affix foreign  translations  of labels to Product  containers,
and the  Distributor  shall  reimburse the Company for all  reasonable  expenses
incurred as part of such relabelling.

45.      Patent  Infringement.  If a patent  infringement action is commenced or
threatened  against  the  Company  as to one or  more of the  Products,  and the
Company elects to  discontinue  the sale of any such Products in any part of the
Territory,  the Distributor  shall discontinue its efforts to sell such Products
in any such part of the  Territory  immediately  upon receipt of written  notice
thereof from the Company.

46.      Termination.

46.1     The Company may terminate this Agreement by giving forty five (45) days
written notice in the following  events:  (a) Distributor has ceased to function
as a going concern or conduct its operations in the normal course of business as
a distributor,  (b) Distributor enters into suspension of payments, or commences
or becomes the subject  of, any action in  relation to  bankruptcy,  insolvency,
reorganization,   dissolution,   or  winding  up;  (c)  Distributor  has  become
insolvent;  (d)  Distributor  has made a general  assignment  for the benefit of
creditors;  (e)  Distributor  has  attempted  to assign,  convey,  or  otherwise
transfer in whole or in part any of Distributor's  rights hereunder to any third
party without the Company's prior written consent based on  Distributor's  full,
true, and correct disclosure of the proposed transaction to the Company; (f) any
material change in the general management, ownership, or control including sale,
transfer,  or relinquishment  by Distributor of any substantial  interest in the
ownership of the business to be carried on by Distributor  under this Agreement,
unless such changes are approved in advance

<PAGE>

                                     - 27 -

and in writing by the president of the Company; (g) conviction of Distributor or
any principal  officer or manager of Distributor for any crime tending to affect
adversely the ownership or operation of the business;  (h) Distributor  provides
falsified data or information to the Company; or (i) Distributor breaches any of
the  obligations  under Sections 8.1 or 8.2 respecting  Information or Section 9
respecting intellectual property. The Distributor hereby acknowledges that forty
five  (45)  days is a  reasonable  and  adequate  period  of  notice  under  the
circumstances,  including  the  extent  of the  expenditures,  investments,  and
commitments made and to be made by Distributor under this Agreement

46.2     In the event either party commits a material  breach of this  Agreement
and such party fails to remedy such default within sixty (60) days of receipt of
written  notice  thereof from the opposite  party,  the party giving such notice
may, at any time thereafter upon written notice,  terminate this Agreement.  The
Distributor  hereby  acknowledges  that  sixty  (60)  days is a  reasonable  and
adequate period of notice under the  circumstances,  including the extent of the
expenditures,  investments,  and commitments  made and to be made by Distributor
under this Agreement

46.3     Either  party may  terminate  this  Agreement  without  cause  upon the
expiration of a ninety (90) day period after giving  written  notice  thereof to
the other party. The Distributor hereby  acknowledges that ninety (90) days is a
reasonable and adequate period of notice under the circumstances,  including the
extent of the expenditures,  investments, and commitments made and to be made by
Distributor under this Agreement

46.4     In the  event  of  termination  of this  Agreement,  whether  upon  the
expiration  of the term of this  Agreement  or  pursuant  to the  provisions  of
Section 13.1,  13.2, or 13.3, the Company shall not be liable to the Distributor
for  compensation,   reimbursement,  or  damages  on  account  of  the  loss  of
prospective  profits  on  anticipated  sales,  or on  account  of  expenditures,
investments,  leases, employee termination pay, or other commitments or expenses
relating to the business or goodwill or the Distributor.

46.5     Termination  of  this  Agreement  shall  not  relieve  or  release  the
Distributor  from any payments which the  Distributor  may owe the Company under
the terms of this Agreement, including without limitation, payments for Products
delivered to the distributor.

46.6     Acceptance  by the  Company of any orders  from the  Distributor  after
termination of this  Agreement  shall not constitute a renewal of this Agreement
or a waiver of the right of the Company to treat this Agreement as terminated.

46.7     Notwithstanding  anything contained herein to the contrary,  Sections 8
and 9 of this  Agreement  shall survive  termination of this Agreement and shall
remain in full force and effect

47.      Relationship.

         The  Distributor  is an  independent  contractor.  Nothing herein shall
constitute the Distributor as an employee or agent of the Company, nor the legal
representative  of the Company  for any purpose or reason not set forth  herein.
The Distributor  does not have the authority to assume or create any obligation,
express or implied,  on behalf of or in the name of the Company,  or to bind the
Company in any manner whatsoever, except as authorized in writing

<PAGE>

                                     - 28 -

by the Company.  The Distributor shall be solely  responsible for the operations
of its business and all costs incurred in such  operations,  solely  responsible
for any injury,  liabilities, or damage incurred in the conduct of its business,
for complying with all laws and regulations of the nation,  state, and political
subdivision  in which it transacts its business,  and shall bear all expenses in
connection therewith. It is the express intent of the parties, pursuant to their
right to freedom of contract,  that this Agreement  shall govern the obligations
of each to the other and the right of each resulting from such  relationship and
that  no  Ordinance,  Regulation  or any  other  law  purporting  to  alter  the
relationship  between  the Company and the  Distributor,  presently  in force or
hereafter  enacted,  may apply to the rights and  obligations of and between the
parties under this  Agreement.  The rights and obligations of the parties in the
event of termination of this Agreement have been  separately  bargained for, and
are intended by both parties to be in lieu of any rights or obligations  arising
under  any  Ordinance,  Regulation  or any  other  law  purporting  to alter the
relationship of the parties.

48.      Compliance with Law. The  Distributor  shall comply with all prevailing
laws  and   regulations  of  the  Territory   pertaining  to  the   importation,
distribution,  sales, promotion,  and marketing of the Products in the Territory
and in any manner otherwise  pertaining to performance by the Distributor of its
obligations  under this Agreement.  The Distributor shall accept and assume full
responsibility for any and all civil or criminal  liabilities and costs that may
be assessed as a result of the Distributor's performance of Distributor's duties
under this  Agreement,  and shall hold  harmless and defend the Company from and
against  any and all fines,  damages,  levies,  costs,  and  judgment  which the
Company may be required to pay as a result of the  Distributor's  performance of
its duties thereunder in violation thereof.

49.      Miscellaneous Provisions.

49.1     Controlling  Law. This Agreement is made with reference to and shall be
construed in accordance  with the laws of the England.  The Parties  acknowledge
and agree that this  Agreement  shall not be subject  to the  provisions  of the
United Nations Convention on Contracts for the International Sale of Goods.

49.2     Arbitration. Any disputes or controversies arising under this Agreement
shall be determined  by binding  arbitration  in  accordance  with the rules and
procedures for arbitration in England,  which  arbitration shall be conducted in
London England Each party shall bear its own costs of the  arbitration and shall
pay one  half  cost of the  costs  of the  establishment  and  operation  of the
arbitration tribunal.

49.3     Notices. All notices,  request, demands, and other communications given
under this  Agreement  shall be in English  and shall be in writing and shall be
deemed to have been duly given at the time of delivery, if personally delivered,
or seventy-two  (72) hours after delivery to an appropriate  courier service and
addressed to the parties at the addresses  set forth  beneath  their  respective
signatures  or at such  other  address as a party may  designate  at any time in
writing by notice to the other in accordance with this Subsection 16.3.

49.4     Waiver and  Modification.  The  failure of either  party at any time to
require strict  performance of any provision of this Agreement  shall not in any
manner  affect the right of such party at a later time to enforce  the same.  No
waiver by either party of the breach of any term or

<PAGE>

                                     - 29 -

covenant  contained in this Agreement  shall be deemed to be a release or affect
any liability  resulting from such breach.  No waiver of any nature,  whether by
conduct,  course of dealing, or otherwise, in any one or more instances shall be
deemed  to be or  construed  as a  continuing  waiver of any such  condition  or
breach,  or as a waiver of any  other  condition  or of any other  breach of any
other term or covenant of this Agreement.

49.5     Severability. If any provision of this Agreement is held and determined
to be invalid by any  arbitrator  or court  interpreting  such  provision,  such
arbitrator or court shall be entitled to modify or otherwise reduce the scope or
effect  of  such  offending  provision,  and to  enforce  such  provision  as so
modified,  provided that such modification does not materially modify the intent
of the  parties  in  entering  into this  Agreement.  If any  provision  of this
Agreement  cannot be so modified  without  offending  the intent of the parties,
such provision shall be deemed to be null and void, and the remaining provisions
of this  Agreement  shall  remain in full],  force and effect as if such invalid
provision had not been included in the Agreement

49.6     Successors in Interest.  This Agreement shall be binding upon and inure
to the benefit of the successors,  heirs, assigns, and personal  representatives
of the parties.

49.7     Assignment.  The  Distributor  may not assign or sublicense  any of its
rights or obligations under this Agreement, nor shall the Distributor appoint or
designate any subdistributor of the Products,  without the prior written consent
of the Company,  which  consent may be granted or withheld for any reason or for
no reason in the sole and  exclusive  judgment  of the  Company.  Any  attempted
assignment, appointment, or designation without the prior written consent of the
Company shall be null and void.

49.8     Entire Agreement.  This Agreement contains the entire agreement between
the parties with respect to the subject matter of this  Agreement.  There are no
representations,  warranties,  understandings,  or  agreements  other than those
expressly set forth herein.  Time is expressly  declared to be of the essence of
this Agreement

49.9     Execution  by  Counterpart.  Agreement  may be executed  separately  or
independently  in any  number of  counterparts,  each and all of which  together
shall be deemed to have been executed  simultaneously and for all purposes to be
one agreement

49.10    Captions.  The  respective  captions of the  Sections  are inserted for
convenience  of  reference  only and shall not be deemed to modify or  otherwise
affect in any respect any of the provisions hereof.

<PAGE>

                                     - 30 -

49.11    Attorneys'  Fees.  In the event  either  party  retains an  attorney to
enforce any of the provisions of this Agreement,  the  substantially  prevailing
party shall be  entitled to  reasonable  attorneys'  fees from the other  party,
including  fees  incurred in both trial or appellate  courts,  or fees  incurred
without suit, and all court and accounting costs.

DATED the day and year first above written.

                                       PURE TECHNOLOGIES INC.

                                       Per: "J. Elliott"
                                           -------------------------------------

                                       Address:   #1050, 340 - 12 th Avenue S.W.
                                                  Calgary, Alberta T2R 1L5

                                       FUGRO LIMITED

                                       Per: "David Youdan"
                                           -------------------------------------

                                       Address:   #18 Frogmore Road
                                                  Hemel Hempstead
                                                  Hertfordshire, England
                                                  HP3 9RT

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