EX-10.1 SHAREHOLDERS AGREEMENT THE UNDERSIGNED: 1. M.E.S.T. BV, based in Amsterdam, Achillesstraat 97, hereafter called: "MEST"; and 2. TNO MANAGEMENT BV, based in Delfi, Schoemakerstraat 97, hereafter called: TMB"; Taking into consideration that: -...

EX-10.1


                             SHAREHOLDERS  AGREEMENT

THE  UNDERSIGNED:

1.   M.E.S.T.  BV,  based in Xxxxxxxxx,   Xxxxxxxxxxxxxx  00, hereafter  called:
"MEST";  and

2. TNO MANAGEMENT BV, based in Delfi,  Xxxxxxxxxxxxxxxx  00,  hereafter  called:
TMB";  Taking  into  consideration  that:

-   TMB is 100% owned by the Netherlands  Organization for Applied Technological
    Research  TNO  (hereafter  called  "TNO")  and on  behalf of TNO acts as the
    holding  company  with  commercial  activities;

-   TNO,  especially  the  department  of  Processes  and  Applications  of  TNO
    Environment, Energy and Process innovation,  (hereafter called TNO-MEP), has
    investigated and has acquired knowledge for the application of zeolites with
    drying  processes;

-  TNO-MEP  conducted  research,  on  the  basis  of  this  technology  for  the
   treatment  of  sludge  and  manure;
-  TNO  has  applied for international  patents for the zeolite  technology used
   in  drying  processes  with  regard  to  the  treatment of sludge and manure;

-   MEST  is  100%  owned  by  M.E.S.T.  Corp.;

-   MEST provides advice regarding  agricultural and environmental  problems and
    MEST will exploit the above mentioned  technology after further  development
    for  the  construction  of  manure  conversion  plants  and  installations;

-    Parties agree to collaborate for the  development of the earlier  mentioned
     technology  for  the  treatment  of  sludge  and  manure;
-    Parties  have  agreed  to  pursue  their  collaboration  in  a  new  to  be
     established  Limited  Company;

HAVE  AGREED  AS  FOLLOWS:

1.   Definitions

Company:          The  Company  to  be established by the Parties, named "Manure
                  and  Sludge  Technology  BV"  trading  under  the  name "MST".

Shareholders:     The  shareholders  are  MEST  and  TMB  together;

CSM:              Common  Shareholders  Meeting;

Know-how:        The  knowledge  and  experience with regard to the treatment of
                 sludge and manure on the basis of zeolite  technology  which is
                 available  with  TNO;

Patent            application:  The  application  that  is  filed  by TNO in the
                  Netherlands,  for the  invention  "sludge  treatment"  for the
                  treatment of sludge and manure based on the zeolite technology
                  number 1009619,  dated July 10, 1998, titled:  "Cost effective
                  method for treatment and/or total disposal of water containing
                  (waste) streams (like sludges,  sewage,  xxxx,  etc.) based on
                  the  application  of  zeolites";


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Agreement:        This  agreement  plus  the  attached  enclosures;

Parties:          Both  TMB  and  MEST;

BOD:              Board  of  Directors  of  the  Company;

2.    The  Company

2.1   Parties will establish a company with limited  liabilities,  conforming to
      the establishment act attached as enclosure 1, as soon as possible,  after
      the  undersigning  of  this  Agreement.

2.2   The  Company  will  carry the name  "Manure  and  Sludge  Technology  BV",
      abbreviated:  "MST BV". If it appears  from the  Chambre of Commerce  that
      this name or  abbreviation  is not  permitted,  Parties  will  establish a
      different  name  for  the  Company.

2.3 The objective of the Company will be: the  development of a technology  with
regard to the  treatment  of manure and sludge,  the  commercialization  of this
technology  with  regard to the  treatment  and  incineration  of sludge and the
guardianship and exploitation of the patents with regard to this technology. The
Company  will  have  its  base  in  Apeldoorn.

2.4 With the  establishment of the Company,  40,000 (forty thousand) shares will
be issued  with a par value of NLG 1.00  (one  Dutch  guilder)  per  share.  The
shareholders will pay for the shares in cash at the moment of the issuance.  The
authorized  capital  will  be NLG 200,000 (two hundred thousand Dutch guilders).

2.5   With the  establishment  of the Company  the issued  shares will be placed
      with  the  shareholders  as  follows:

      TMB:  20,000  shares;
      MEST:  20,000  shares;

       Every  party  will  have  the  same  number  of  shares.

3.    Objective  and  financing

3.1 The Company's  objective is the development of technology with regard to the
treatment and  incineration of manure and sludge,  the  commercializing  of this
technology  with  regard to the  treatment  and  incineration  of sludge and the
guardianship  and the  exploitation of the related  patents.  For the purpose of
this,  Parties  bring  in  the  following:

x.        XXXX  will  supply  with  banks  and  TNO a  subordinated  loan of NLG
          2,000,000  (two  million  Dutch  guilders)   conforming  to  the  Loan
          Agreement  (see  enclosure  2). The loan will be  provided  against 5%
          interest.

b.   TNO brings to the Company the Patent  application and the Know-how  against
     payment for  licensing  fees  conforming to the  Licensing  Agreement,  see
     enclosure 3. The licensing  fee has a value of NLG  2,000,000  (two million
     Dutch  guilders)  irrespective  of the relative share in the application of
     the  technology.  In the  agreement  a  payment  schedule  is made in which
     payment will be made in yearly terms of 50% of the positive Company results
     and against payment of 5% interest over the unpaid balance of the licensing
     compensation.  All costs (including maintenance and broadening) with regard
     to the  application  of the patents  will be paid by the  Company  from the
     moment of the start of the licensing agreement.  After payment of the total
     licensing  compensation and as soon as the application  results in patents,


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     TNO will give in  ownership  the patents and know-how to the Company for an
     extra amount of NLG 1,000,000 (one million Dutch guilders).  The conditions
     related  to  this  are  stipulated  in  enclosure  3 'licensing agreement".

c.        The Company  will place an order with TNO-MEP for NLG  2,000,000  (two
          million Dutch guilders) for the development of the technology based on
          the know-how to make it commercially  viable to turn raw manure into a
          dry,  granulated organic fertilizer  product.  In the research order a
          payment  schedule is  stipulated  that  payment  will be made in terms
          before  different  phases  will  be  concluded.

d.        The Company gives in sub-license the patent  applications and know-how
          against   payment  of   royalties  as   stipulated   in  enclosure  4:
          Sub-licensing  Agreement.  MEST will use  these  rights to build or to
          have  built  manure  conversion  plants  and  installations.

      x.  XXXX will look for parties for the development  and  commercialization
          of the zeolite  technology  for the  treatment of  different  sorts of
          sludges.  In accordance  with the  shareholders it will be established
          against which price and if yes or no, these parties can acquire shares
          in  the  Company.

3.2   Taking into account what is established under 3.1 b the susceptible profit
      will be paid to the  shareholders  yearly provided the liquidity  position
      allows  it.

3.3 When the Company and TNO come to the conclusion that the further development
of the  technology  does not lead to the  foreseen  results  and  through  which
continuation of collaboration is no longer wished,  Parties shall, in accordance
with each other,  take  measures  for  termination  with regard to the  Company,
patents,  licenses  and  the  research  project.

4.    Directors

4.1  At present the  direction  of the  Company  consists  of two  persons.  The
     shareholders appoint Ms. M. A. Oudejans (on behalf of MEST) and Mr. Eng. X.
     Xxxx (on behalf of TNO) as first  statutory  directors of the Company.  The
     tasks and  competence of the directors  will be  established  in accordance
     with  the  CSM.

4.2   The directors of the Company are obliged to implement,  with regard to the
      financial,  social and economic guidance,  the policies established by the
      CSM  and  the  BOD.

4.3   The  directors  shall report to the BOD on a monthly  basis with regard to
      the enterprise of the Company and its financial situation.  Yearly, before
      November  1, the  directors  shall  present  to the BOD the budget for the
      following  financial  year  for  approval.

4.4 The Company  will make sure that the  Directors  will be insured  adequately
against  managers  liability.

5.    Board  of  Directors

5.1   Shareholders who have a minimum of 20% of the shares in the placed capital
      of the Company are legally  allowed to appoint a commissioner  to the CSM.
      When more than  three  shareholders  have 20% or more of the shares in the
      placed  capital  of  the  Company this article can be changed accordingly.

5.2   The   shareholders  are  obliged  to  agree  with  the  appointment  of  a
      commissioner  by  one  of  the  shareholders.

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5.3 Each  shareholder  has the  right to submit  to this  shareholder  appointed
commissioner for resignation with the CSM. The other shareholders are obliged to
agree  with  the  resignation  proposal.

5.3   A commissioner will be removed from the post at the CSM on the moment that
      the  shareholder on who's behalf he is appointed no longer has 20% or more
      of  the  shares.

5.4   Xx.  X. Xxxxxxxx (on behalf of MEST) and Xx. X. Xxxxxx (on  behalf of TMB)
      are  appointed  as  commissioners  with  the establishment of the Company.

5.5   The members of the BOD will appoint a chairman  from their  members.  This
      appointment takes  place for  a period of two  years, alternating  once by
      MEST and  by  TMB  and  so  forth.

5.6   The Company will make sure that the members of the BOD will be  adequately
      insured  against  commissioners  responsibilities.

6.    Meetings

6.1   Once  quarterly,  or how many times the  commissioners  wish, the BOD will
      have a meeting.  The  directors  will attend these  meetings,  but have no
      voting  rights.

6.2  The  common  meeting  of the shareholders of the Company will take place as
     stipulated  in  the  statutes.

7.    The  length  and  termination  of  the  Agreement

7.1  The agreement  starts on the date of the complete  signing of the contracts
     and will hold for an undetermined  length of time, as long as there is more
     than one  shareholder  in the Company.  Parties can cancel the agreement in
     accordance  with each other as determined  in article 3.3. A  shareholder's
     agreement  can  also  be  cancelled  in  conformity  with  article  7.2.

7.2  This  agreement will end for a shareholder  by  cancellation  by registered
     mail on behalf of the other shareholders,  starting immediately,  when this
     shareholder:

a.    no  longer  has  shares  in  the  company;

      b.  fails in compliance  with what is  established  in the statutes of the
          Company,  and fails or lacks in  reestablishing  the  situation as was
          mentioned  in  the  registered  letter  within  30  days;

     c.  is  in  state  of  suspension  of  payment  or  bankruptcy;

     d.  loses a corporate personality or will be disincorporated or liquidated;

     e.  for  whatever  reason  loses  free  management  or  free  disposition
         over  his/her  capital.

7.3  In case of termination  of this Agreement on grounds  determined in article
     7.2 b, the  departing  shareholder  is  obliged  to offer and  deliver  all
     his/her shares in the Company  immediately to the other  shareholders for a
     price not higher than the visibly intrinsic value. When other  shareholders
     do not wish to buy the  shares,  the  departing  shareholder  is allowed to
     offer and  deliver  the shares to third  parties for a price not lower than
     the  price  offered  to  the  other  shareholders.



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7.4  The commissioner,  who was appointed on behalf of the departing shareholder
     in the  BOD,  will  be  dismissed  by  the  CSM on  the  day on  which  the
     determination  has  taken  place.

7.5  When the  Agreement is terminated  for a  shareholder,  all his/her  rights
     under this agreement expire.  The departing  shareholder is obliged to hand
     over all  documentation  with  regards  to the  collaboration  of which the
     Company  is  the  owner.

7.6 The departing shareholder will have no right on restitution or absolution of
outstanding amounts or debts which date from before the day of determination but
will  only be freed  from  future  financial  obligations.  A  determination  as
stipulated  under  7.2  b  leaves  the rights to penalties and claims unimpeded.

8.    Estrangement/  breach  of  shares

8.1 The  shareholders  will not offer  their  shares for sale in the first three
years after the  establishment  of the Company.  Despite what is laid out in the
statutes with regard to estrangement, this three year non-sale period for shares
remains in full force.  The shareholder who sells his shares to third parties is
obliged  to make  sure that this  third  party  accepts  the  agreement  and all
liabilities  this concerns.  Also in other cases, a third party can only receive
shares in the  Company if he is a third party in the  Agreement  and accepts all
liabilities  and  obligations  concerned.

8.2 A shareholder is, at any moment, allowed to transfer ownership of the shares
in the Company to a subsidiary that 100% belongs to this  shareholder,  provided
that this  subsidiary  will  become a party in this  Agreement  and  accepts all
responsibilities  of the shareholder who transfers the shares in ownership.  The
shareholder  who  transfers  the  shares  in  ownership  will  be ,  next to the
subsidiary,  responsible  for all  obligations  till the moment of  estrangement
which  is  determined  in  the  Agreement  or  in  the  statutes of the Company.

8.3 When after  estrangement  as meant in 8.2, the subsidiary to whom the shares
are  transferred  will  no  longer  be  a  subsidiary  of  the  shareholder  who
transferred  the  shares in  ownership,  the  transferring  shareholder  will be
obliged to  transfer  the  ownership  of the shares  back to him and will become
again a party of the  Agreement  and will  accept  all  responsibilities  of the
subsidiary  as  his  own  responsibilities.

9.    Non-disclosure

9.1 As legally or  differently  required,  Parties will not  publicize  nor make
public  to third  parties,  directly  or  indirectly,  confidential  information
regarding  the  Company,  the  Agreement  or  each  other,  no  matter  if  this
information  is  confidential  or  secret,  or  pertains  to lists  of  clients,
deliverers  or  manufacturers  or  organizations  who do  business  or have done
business  or  will  do  business  with  the  Company.

10.   Complete  Agreement

10.1 The contents of the Agreement  include  enclosures I through 4 which are an
integral  parts  of  this  Agreement.  The  Agreement  can  only be  changed  or
supplemented  with  documents  signed  by  both  parties.

10.2 The agreement  contains all agreements  between  Parties with regard to the
Company  and  replaces  all  earlier  made  oral  and  written  agreements.





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11.    Rights  and  Disagreements

11.1  Dutch  law  is  applicable  to  this  Agreement.

11.2 All  disagreements  which  arise  with  regard to this  Agreement,  will be
brought to court with the competent  lawyer in The Hague,  unless Parties decide
differently.

As  agreed  upon  and  thrice  signed:

MEST                                     TMB

Name:        M.  A.  Oudejans              Name:      X.  Xxxxxx
Title:       Director                    Title:     Director
Date/Place:  January  22,  1999  Amsterdam  Date/Place:  January  25, 0000 Xxxxx

XXX                                         XXX

Name:       X.Xx.  X.X.  Xxxxxx             Name:  Dr.  Eng.  P.  Folstar
Title:      Chairman Board of Directors     Title: Member Board of Directors TNO
Date/Place:  February  1,  1999,  Delft      Date/Place: February 1, 1999, Delft


In this  translation  an  attempt  has been made to be as  literal  as  possible
without jeopardizing the overall continuity.  Inevitably,  differences may occur
in  translation,  and  if  so,  the  Dutch  text  will  by  law  govern.

12  July  1999

INCORPORATION  OF  A  PRIVATE  COMPANY

This twelfth day of July nineteen hundred and ninety-nine  there appeared before
me,  Xxxx  Xxxxxx  Okkinga,  Civil  law  notary,  officiating  in  Rotterdam:

1.   Xxx.  Xxxxxx  Xxxxxx van  Smaalen,  candidate-notary,  residing  at 2985 AR
     Ridderkerk,  Xxxxxxx  000,  born at  Rotterdam  on the  eleventh day of May
     nineteen hundred and sixty-two,  not married and not a registered  partner,
     holder of driving  permit  number:  0000000000  (issued at Rotterdam on the
     tenth  day of  March  nineteen  hundred  and  ninety-four),  acting  in her
     capacity   of   mandatory   in   writing   of   M.E.S.T.    Management   of
     Environmental  Solutions  & Technology B.V., a private company with limited
     liability,  having  its  registered  office at Amsterdam and its address at
     Xxxxxxxxxxxxxx  00,  0000  XX  Xxxxxxxxx;

2.   Xxx.  Xxxxxx  Xxxxxxx  Broekmans-Xxxxxxx,  secretary,  residing  at 3069 DB
     Rotterdam,  Hopklaver  49,  born at  Delft  on the  sixteenth  day of April
     nineteen  hundred and sixty-one,  married and holder of driving permit with
     number;  0000000000 (issued at Rotterdam on the twenty seventh day of April
     nineteen  ninety-nine),  acting in her  capacity of mandatory in writing of
     TNO Management B V., a private company with limited  liability,  having its
     registered office at Delft, and its address at Xxxxxxxxxxxxxxxx 00, 0000 XX
     Xxxxx.










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Powers  of  attorney

The mandates appear from two written powers of attorney, which shall be attached
to this deed. The existence of the mandates is  sufficiently  known to me, civil
law  notary.

The appearing  person in their said capacity have declared hereby to incorporate
a private company with limited  liability  ("besloten  vennootschap met beperkte
aansprakelijkheid")  with  the  following  articles  of  association:

                                 Name  and  seat.

                                   Article  1.

1.  The  name  of  the  company  is:  Manure  and  Sludge  Technology (MST) B.V.

2.  The  corporate  seat  of  the  company  is  in  Apeldoorn.

                                    Objects.

                                   Article  2.

The  objects  of  the  company  are:

-    the research and  development as well as the  application  of  technologies
     relating  to  the  treatment  and  processing  of  manure  and  sludge.

-    to participate in, to administer,  to finance, to conduct the management of
     and  to  render  advice  and  services  to other companies and enterprises;

-    to operate and to trade in copyrights,  patents,  models, secret processes,
     trademarks  and  other  intellectual  and  industrial  property  rights;

-    to lend  and to  borrow  moneys,  to  issue  bonds,  debentures  and  other
     securities,  as  well  as  entering  into  agreements  pertaining  thereto;

-    to provide guarantees for debts and other liabilities of the company and of
     third  parties;

-    all other  activities  that are connected with or that may be conductive to
     the  above,  all  this  in  the  broadest  sense.

                                    DURATION

                                   Article  3.

The  Company  shall  continue  in  existence  for  an  indefinite  period.

                               CAPITAL  AND  SHARES
                                   Article  4.

The  authorized  capital  of  the  Company  is  two  hundred  thousand  Guilders
(NLG200.000,--)  divided  into two  hundred  thousand  shares  (200.000)  of one
Guilder  (NLG  1,--)  each.








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                                   Article  5.

1.   The  "Algemene   Vergadering  van   Aandeelhouders"   (General  Meeting  of
     Shareholders) shall resolve upon the issue of unsubscribed shares and shall
     determine  the  price  and  the  further  terms  of  issue.

2.   The General  Meeting of  Shareholders is entitled to assign its authorities
     to adopt  resolutions,  referred to in para. I of this Article,  to another
     corporate  body  and  is  entitled  to  revoke  such  an  assignment.

3.   Upon  any issuance of shares the nominal amount must be paid on each share.




4.   A shareholder shall not have a preferential right in case of an issuance of
     shares  and  in  case  of  a  granting  of  subscription  rights on shares.

5.   In view of  subscription  for or  acquisition  of shares  in the  Company's
     capital or of depositary receipts therefor, the Company may only make loans
     to  the  extent  of  its  distributable  reserves.

                                   Article  6.

1.   The  "Directie"  (managing  Board)  may -  without  prejudice  to the other
     provisions,  laid down in  Articles  2O7 and 207d of Book 2 of the  (Dutch)
     Civil Code - cause the Company to acquire  fully-paid shares in its capital
     otherwise  than  gratuitously  and  for  valuable  consideration  only, if:

     a.  the  Company's own assets and  property,  decreased by the  acquisition
         price,  is not less than the paid-up and called-up part of the capital,
         increased  by the  reserves  that are  required to be kept under and in
         pursuance  of  the  statutory  provisions  (or  the  provisions  of the
         Articles  of  Association);

     b.  the nominal  amount of the shares to be acquired and the shares already
         held jointly by the Company and its subsidiary companies in its capital
         is  not  in  excess  of  one  half  of  the  issued  capital;  and

     c.  the  authorization for such acquisition has been granted by the General
         Meeting  or by  another  organ  or body of the  Company  that  has been
         designated  for  that  purpose  by the  General  Meeting.  The  concept
         "shares" in this Article shall mean to include depositary  receipts for
         shares  in  the  Company.

2.   In respect of alienation by the Company of shares acquired by it in its own
     capital Article 5 hereof shall apply correspondingly, with the proviso that
     such  alienation  may  also  be  effected  at  a  price  below  par.

3.   The  Company  cannot base any  preferential  right of  subscription  on any
     account whatsoever on shares, nor on depositary receipts for shares, in its
     capital  held  by  it  or  by  a  subsidiary  company.

4.   No votes can be cast at the General Meeting of Shareholders in respect of a
     share owned by the Company or a subsidiary company thereof;  nor in respect
     of a share  for  which  the  depositary  receipts  are held by one of them.
     However, usufructuaries and pledgees of shares owned by the Company and its
     subsidiary  companies shall not be excluded from their right of voting,  if
     the usufruct or the right of pledge had been  created  before the share was
     owned by the Company or by a subsidiary  company  thereof.  No votes can be

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     cast by the Company or a subsidiary  company  thereof in respect of a share
     in  which  it has a right of usufruct or on which it has a right of pledge.

5.   When determining to which extent the  shareholders  cast votes, are present
     or  represented,  or to which  extent  the share  capital  is  provided  or
     represented, the shares, in respect of which the law provides that no votes
     can  be  cast  in  respect  thereof,  shall  not  be  taken  into  account.

6    From shares held by the Company in its capital no right of any distribution
     shall  ensue for the  benefit of the  Company.  In the  computation  of the
     distribution  of profit  shares  from  which no rights of any  distribution
     ensue  for  the  benefit  of  the  Company  shall  not  count.

                                    Article  7

1. The shares  shall be  registered  shares and shall be  numbered  from 1 (one)
onwards.

2.  No  share  certificates  will  be  issued.

3.   The Managing Board shall keep a share register,  in which shall be recorded
     the names and addresses of all the  shareholders,  at the same time stating
     the number of shares held by them, the amount paid up on each share and all
     other data, that by virtue of the law are required to be recorded  therein,
     including  the names and  addresses  of those  persons  who have a right of
     usufruct  or a right of  pledge on those  shares  at the same time  stating
     which rights attaching to the shares may be exercised by them in conformity
     with  paras.  9,  10  and  11  of  this  Article.

4.   In the register  shall  furthermore  be recorded the names and addresses of
     the holders of registered  depositary  receipts issued with the cooperation
     of  the  Company.

5.   Each  shareholder,  usufructuary  and  pledgee of shares and each holder of
     registered  depositary  receipts issued with the cooperation of the Company
     shall  take  due  care  to  see  that  his address is known to the Company.

     Such  address  shall as against the Company  continue to apply,  as long as
     another  address has not been notified to the Managing  Board by registered
     letter post.

6.  The  register  must  be  kept  up-to-date  by  the  Managing  Board.

7.   On being so requested,  the Managing Board shall furnish a  shareholder,  a
     usufructuary  and a pledgee with an extract from the register in respect of
     his right to a share,  free of charge. If a right of usufruct or a right of
     pledge has been  established  on the share,  the extract  shall state which
     persons may  exercise the rights  mentioned in paras.  9, 10 and 11 of this
     Article.

8.   The  Managing  Board shall make the  register  available  at the  Company's
     office  for  inspection  and  perusal by the  shareholders,  as also by the
     usufructuaries  and  pledgees  who are  entitled  to  exercise  the  rights
     mentioned  in  paras.  9  10  and  11  of  this  Article.

9.   A usufruct may be established on shares.  If at the  establishment  of such
     usufruct it has been  provided that the  usufructuary  shall be entitled to
     the voting  right,  he only shall be entitled  to the voting  right if both
     that  provision  and - in case of transfer of the usufruct - the passing of
     the voting  right to  another  person  have been  approved  by the  General
     Meeting  of  Shareholders.

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10.  The  shareholder who has no voting right and the  usufructuary  who has the
     voting right shall have the rights conferred by Statute upon the holders of
     depositary  receipts  issued  with  the  cooperation  of  the  Company.

     ii. Shares and rights attaching to shares shall not, without the consent of
         the General Meeting of Shareholders  which may attach conditions to the
         granting  of  such  consent,  be  capable  of  being  pledged.

When establishing  a right of pledge the  provisions  of the second  sentence of
     para.  9  and  para.  10  of  this  Article  shall  apply  correspondingly.

12.  In these Articles of Association  the term 'holders of depositary  receipts
     shall mean the holders of depositary  receipts  issued with the cooperation
     of the Company, as also the persons who as a result of a usufruct or pledge
     established  on a share have the rights  mentioned  in paras.  10 and 11 of
     this  Article.

                                   Article  8.

If  shares  form  part of any  community,  the  joint  co-owners  may only  have
themselves be represented as against the Company by a person  designated by them
for  that  purpose  in  writing.

                           MODE  OF  TRANSFER  OF  SHARES

                                   Article  9.

Any  transfer of a share or of a right of usufruct in a share or the creation of
a right of usufruct in or of a right of pledge on a share shall be effected with
due  observance of the  provisions of Article 196 of Book 2 of the (Dutch) Civil
Code.

            PROVISIONS  RESTRICTING  THE  FREE  TRANSFERABILITY  OF  SHARES

                                   Article  10.

1.   If a shareholder (hereinafter also called "the offeror") wishes to transfer
     the ownership of one or more of his shares - gratuitously or for a valuable
     consideration - he shall first offer the same to the other shareholders and
     to  the  persons  within  the  meaning  of  para.  5  of  this  Article.

2.   For that purpose the shareholder shall notify his intention to the Managing
     Board by registered letterpost, stating the number of shares he is desirous
     of transferring and naming the person(s), to whom he wishes to transfer the
     same.

3.   Within  one  week  of  receipt  of  the  communication   mentioned  in  the
     immediately  preceding  paragraph of this Article the Managing  Board shall
     bring  the  same by  registered  letter  Post to the  knowledge  of all the
     shareholders recorded in the share register. Each shareholder who wishes to
     exercise his preferential  right shall within four weeks of dispatch of the
     notification  mentioned in the  immediately  preceding  sentence inform the
     Managing Board by registered  letter post how many of the shares offered he
     is desirous of taking over,  failing which his  preferential  right to take
     over the  shares so  offered  shall  lapse,  excepting  a renewed  offer as
     hereinafter  described.





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4.   If the  shareholders  claim in the  aggregate  more  shares  than have been
     offered, then and in such case allocation shall, as far as possible, be pro
     rata to the number of shares held by each of them and otherwise by lot, the
     drawing of lots to be  arranged  and carried  into  effect by the  Managing
     Board,  with the proviso that no  shareholder  may be allotted  more shares
     than the number of shares he has declared  himself willing to take over and
     with  the  proviso  that so long as  upon  such  drawing  of lots or upon a
     drawing of lots as herein before  mentioned  which took place at an earlier
     date after any previous offer each of the shareholders  therefor qualifying
     has not been allocated at least one share,  the  shareholders  who upon any
     such drawing of lots have been allocated a share shall not any further take
     part  in  such  drawing  of  lots.

5.   However the Managing Board shall,  if and in so far as the  shareholders in
     the aggregate did claim less shares than have been offered,  have authority
     after having obtained the approval of the General Meeting of Shareholders -
     to designate one or more third persons, by whom the shares - or one or more
     thereof are taken over.  The Company can be  designated  as a claimant only
     with  the  consent  of  the  offeror.

     Simultaneously  with the notification of the  communications  received from
     the other  shareholders  respecting  the number of shares they wish to take
     over, the Managing Board shall within four weeks after expiry of the period
     mentioned in para. 3 of this Article and prescribed for the claiming of the
     shares by the other  shareholders,  bring such fact to the knowledge of the
     offeror and of those who wish to take over the shares by registered  letter
     post.

6.   The parties shall mutually  determine the price,  at which the shares shall
     be  transferred.

     If they shall not reach  agreement  within four weeks after dispatch by the
     Managing  Board of the  notification  mentioned in para. 5 of this Article,
     the  value  shall be fixed by one  independent  expert  (or,  if one of the
     parties  shall  so wish,  by three  independent  experts),  to be  mutually
     appointed by the offeror and the claimants, or, if the parties cannot reach
     agreement  on such  appointment  either,  by the Chairman of the Chamber of
     Commerce and Industry within whose district the Company's Registered Office
     is situate,  upon the  application  of whichever of the parties first makes
     the  same.

     The Managing Board shall furnish such  expert(s) with all such  information
     as  he  (they)  shall  demand

     The Managing Board shall forthwith  notify the price fixed by the expert(s)
     by  registered  letter  to  the  offeror  and  to  each  claimant

     The decision of this (these) expert(s) shall be binding upon the parties. A
     claimant  shall have the right to  abandon  the  purchase  within one month
     after the price has been notified to him. If shares  become  available as a
     result  thereof,  the shares which have thus become  available shall yet be
     offered to the other claimants at the price fixed by the expert(s), subject
     to  the  provisions  embodied  in  paras. 3 to 5 inclusive of this Article.

     The offeror shall  continue to be entitled to withdraw his offer,  provided
     always this takes place  within one month after it is known to him to which
     claimants  he can sell all the  shares to which the  offer  relates  and at
     which price, in which event he shall retain these shares, and in that event
     he  may  not  transfer  the  same  to  any  third  person.



  131
     The  expert(s)  fee  and  expenses  shall  be  borne  by  the  Company.

7.   If all the shares have been taken,  the offeror shall within ten days after
     the payment hereinafter to be mentioned has been made, transfer the shares.
     The claimants  shall within ten days after an application to that effect by
     the  Managing  Board be under the  obligation  to deposit  the price of the
     shares, unless otherwise agreed upon, with the civil law notary before whom
     the deed of transfer  will be  executed.  If the parties fail to agree upon
     the  appointment  of the said civil law notary,  the  Managing  Board shall
     appoint  the  notary.

     If one or more claimants shall fail to deposit the said price, the Managing
     Board shall  within two weeks  after  expiry of the  aforementioned  period
     notify to the claimants who have fulfilled their obligation, to deposit the
     price the  number of  shares,  in  respect  whereof  the price has not been
     deposited; such shares shall be deemed to have been offered to the persons,
     to  whom  the  notification  was  addressed.

     The  claimants  who are  desirous  of taking over one or more of the shares
     which have thus  become  available  at the price  fixed in respect  thereof
     shall so inform the Managing  Board within  fourteen days after dispatch of
     the aforementioned  notification.  The Managing Board shall within fourteen
     days after expiry of the period  prescribed  in the  immediately  preceding
     sentence  inform the offeror and the persons who have claimed  shares which
     have  become  available,  how  many  shares  are  allocated  and  to  whom.

     The  provision  laid  down in the  penultimate  sentence  of the  preceding
     paragraph  shall  apply  correspondingly.

     The claimants to whom  additional  shares have been allocated  shall within
     fourteen days after dispatch of the aforesaid notice of allocation  deposit
     the price payable by them in respect thereof in the manner as herein before
     described  in  this  paragraph.

8.   The offeror  shall be at liberty to transfer all the shares  offered to the
     proposed  acquirer,  if all the shares  offered are not taken over  against
     payment in cash,  provided  such  transfer  takes place within three months
     after  such  has  become  an  established  fact.

9.   In the event of the offeror failing to transfer the shares as prescribed in
     para. 7 of this  Article,  the Company shall  irrevocably  be authorized to
     effect  such  transfer.

l0.  If and as  soon  as a  shareholder  be  declared  bankrupt,  be  granted  a
     moratorium  in  respect  of his debts or in the event of shares  passing to
     others, - which shall not include the joining of an estate as a result of a
     marriage  - either in whole or in respect of an  undivided  part  otherwise
     than by transfer,  as also in the event of transfer of shares on the ground
     of  appropriation  of a community  to a person  other than the  shareholder
     himself out of a  community,  into which he had  brought  the  shares,  the
     shareholder  or his  legal  representative  or - as the  case  may be - the
     acquirer(s)  shall be under the  obligation  to offer  these  shares to the
     other  shareholders.

     So long as the shares have not been  transferred,  the  shareholder  or his
     legal  representative  or the acquirer(s)  shall continue to be vested with
     all  the  rights  attaching  to  the  shares.





  132

     The provisions herein before shall apply correspondingly,  with the proviso
     that it shall not be  competent  for the offeror to  withdraw  and with the
     further  proviso  that in cases  where it would by  virtue  of the  present
     Article be  competent  for the  offeror to transfer  the shares  offered to
     (the) person(s) named by him, the offeror mentioned in this paragraph shall
     only  have  the  right  to  retain  such  shares.

     If no offer as referred to in the first sentence of this paragraph is made,
     then and the Company shall,  after a summons,  irrevocably be authorized to
     make  such  offer  in  the  name  and  behalf  of  the  offeror.

11.  The provisions of this Article shall also apply, if a person wishes, in any
     capacity  or by virtue of any title  whatsoever,  to  alienate  one or more
     shares  belonging  to  someone  else.

12.  The  provisions of this Article shall apply in like manner to  subscription
     rights and other  rights  attaching  to  shares,  except for rights to cash
     payments.
13.  The provisions of the preceding paragraphs of this Article shall not apply,
     if all the remaining  shareholders  have notified either the person,  whose
     shares  have  been  offered  or are  deemed to have  been  offered,  or the
     Managing  Board,  in writing that with respect to the case  concerned  they
     waive and renounce  their rights under this Article,  provided the transfer
     takes place within three months after all the  shareholders  have made such
     declaration.

14.  If among the persons  entitled to an estate is the person in whose name the
     shares were registered in the share register, the obligation to offer shall
     for a period of six months be deferred  and shall  terminate  if the shares
     have  been  allocated  to  that  person  within  the  said  period.

     The provisions  laid down in this Article shall neither apply, if by virtue
     of the law the  shareholder  is obliged to  transfer  his share to a former
     holder.

15.  The  preceding  paragraphs  of this Article  shall not apply in the case of
     transfer  or passing of one or more shares to the Company or in the case of
     alienation  by  the  Company  of  shares  acquired  by  it  in its capital.

                           MANAGEMENT  AND  SUPERVISION

                                   Article  11

1.   The Company shall be managed by a "Directie"  (Managing Board),  consisting
     of  one  or  more  "Directeuren'f  (Managing  Directors).

     The general meeting of shareholders  may resolve to establish a Supervisory
     Board,  consisting of one or more  Supervisory  Directors.  The Supervisory
     Board will be established as of the date of  registration of the resolution
     referred to in the preceding  sentence,  as well as the  registration  of a
     resolution  adopted by the General  Meeting of  Shareholders to that effect
     with the commercial  register at the place of registration of the corporate
     seat  of  the  Company.

     If the Company does have a Supervisory  Board pursuant to the preceding two
     sentences,  this  article as well as the  articles 16 and 17 shall apply to
     the Supervisory Board and is members, notwithstanding the provisions of the
     law and these Articles in respect of the  Supervisory  Bard and its member.
     The number of  Managing  Directors  and,  if a  Supervisory  Board has been
     established,  the  number of  Supervisory  Directors  shall be fixed by the
     General  meeting  of  Shareholders.
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     A juristic  person  shall also be  eligible  for  appointment  as  Managing
Director.

2.   The Managing Directors and the Supervisory  Directors shall be appointed by
     the General  Meeting of  Shareholders  and may at any time be suspended and
     removed  by  it  from  office.

3.   If the  General  Meeting  of  Shareholders  or the  Supervisory  Board  has
     suspended a Managing Director from office,  and also if the General Meeting
     of  Shareholders  has  suspended a Supervisory  Director  from office,  the
     General   Meeting  of   Shareholders   shall   within  three  months  after
     commencement of such suspension from office resolve either upon termination
     or upon  extension of the  suspension,  failing which the  suspension  from
     office shall cease. A suspension  from office may be extended only once and
     for a period not exceeding  three  months,  commencing on the day, on which
     the General  Meeting of Shareholders  resolves upon such extension.  If the
     General  Meeting has not resolved upon removal or upon  termination  of the
     suspension within the period prescribed for such extension,  the suspension
     from  office  shall  terminate.

4.   A Managing  Director or a  Supervisory  Director so  suspended  from office
     shall be enabled  to account  for his  actions  at the  General  Meeting of
     Shareholders and may for that purpose procure the assistance of an adviser.

5.   If the office(s) of one or more Managing  Directors be vacated or if one or
     more Managing  Directors be otherwise  unavailable,  the remaining managing
     Directors or the remaining  Managing  Director shall  temporarily be vested
     with  the  entire  management.

     If the  offices  of all the  Managing  Directors  or the office of the sole
     Managing  Director be vacated or if all the Managing  Directors or the sole
     managing   Director  be  otherwise   unavailable,   the  management   shall
     provisionally  vest in the  Supervisory  Board;  it shall in that  event be
     competent for the Supervisory Board to designate from its body or otherwise
     -  one  or  more  persons,  who  shall  be  in  charge  of such management.

     If the  offices  of all the  Managing  Directors  or the office of the sole
     Managing  Director be vacated,  the  Supervisory  Board  shall,  as soon as
     possible,  call a General Meeting of Shareholders for the purpose of having
     definite  provision  made.

                                 MANAGING  BOARD

                                   Article  12.

1.   The Managing  Board shall be vested with the  management  of the  Company's
     affairs.  The Managing  Directors shall in the conduct of their  management
     duly observe and comply with  directives that may have been drawn up by the
     Supervisory  Board,  in  respect of  the  general  lines of the  financial,
     social, economic and staff policy to be adopted and pursued in the business
     of the Company.

     If there is more than one Managing Director in office,  the General Meeting
     of  Shareholders  may grant to one or more Managing  Directors the title of
     Algemeen  Directeur  (General  Managing  Director)

2.   The  Managing   Board  may,  with  due  observance  of  these  Articles  of
     Association,  draw  up  rules,  regulating  matters  concerning  the  Board
     internally.  Furthermore, the Managing Directors may, by means of a code of
     rules  or otherwise, determine the duties to be discharged by each of them.


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3.   The Managing Board shall meet whenever a Managing Director shall so demand.
     It shall pass  resolutions by absolute  majority of votes which majority is
     to include  the vote of the  General  Managing  Director.  If the votes are
     equal the General Meeting of shareholders shall decide if so requested by a
     Managing  Director.

4.   The General  Meeting of  shareholders  shall be  competent  to subject in a
     resolution of the Board to that effect clearly described resolutions of the
     Managing  Board  to  its  approval  or  authorization.

     Without prejudice to the provision laid down in the preceding sentence, the
     Managing Board shall require the  authorization  or approval of the General
     Meeting of shareholders  for resolutions of the Managing Board, the subject
     matter  of  which  is:

a.   acquisition,  encumbrance, alienation, hiring or letting notice to leave or
     acquiescence  in  notice  to  leave  of  registered  goods;

     b.  encumbrance  of  other  goods  than  registered  goods;

     c.  the borrowing of money and/or obtainment of advances on current account
         on behalf of the  Company,  as also the placing on deposit of moneys of
         the Company  otherwise than from or with the  institutions  approved by
         the  General  Meeting  of  Shareholders;

     d.  the  lending  of  money;

     e.  granting,  alteration  or withdrawal  of powers of  procuration  or the
         according to or withdrawal from a  "procuratiehouderff  (officer of the
         Company  holding  powers of  procuration)  of a title as referred to in
         Article  14  hereof;

     f.  the granting to an employee of a fixed annual  salary  exceeding the an
         amount fixed by the General Meeting of Shareholders and notified to the
         Managing Board, and the dismissal of an employee earning a fixed annual
         salary  as  herein  before  described;

     g.  arranging  of group  pension  schemes or the granting of pension rights
         otherwise  than  in  pursuance  of  a  group  pension  scheme;

     h.  binding  the  Company  for  debts  of  others,  as surety or otherwise;

     i.  entry into agreements - to the extent that the same do not form part of
         standard  contracts - in pursuance whereof disputes,  if any, are to be
         referred to the determination of arbitrators or are to be determined by
         binding  opinion,  or the subject matter whereof is the compromising of
         matters;

     j.  the taking or defending of legal  proceedings in the ordinary courts of
         law, the taking or defending of  arbitration  proceedings or the taking
         of measures for the purpose of obtaining a binding opinion,  except for
         taking  legal  action  which no delay or are of a purely  precautionary
         nature and,  further,  except for taking measures for the collection of
         receivables;

     k.  the exercise of voting  rights in respect of unlisted  shares and other
         securities,   to  which  voting  rights  attach,  which  shall  include
         determination  of  the  way  of  voting;

     l.  establishment  or  winding  up  of  offices  and  branches;


  135

     m.  extension of the business by a new branch or discontinuance which shall
         include  transfer  of ownership - of the Company's business or any part
         thereof;

     n.  participation in or undertaking or relinquishment of the administration
         of  other  enterprises  or  termination  of  such  participations;

     o.  the undertaking of commitments or the doing of acts, to the extent that
         any such  commitment  or act does not fall  under any of the  preceding
         letters,  exceeding  in amount or value  such sum as shall each time be
         fixed by the General Meeting of Shareholders,  or undertaken or binding
         for  a  period  in  excess  of  twelve  months.

                                   Article  13.

     The General Meeting of Shareholders  shall fix the salary,  the "tantieme",
     if  any,  and  the  further  terms of employment of the Managing Directors.

                   OFFICERS  OF  THE  COMPANY  HOLDING  POWERS  OF  PROCURATION

                                   Article  14.

     The Managing  Board may, with due  observance  of Article l2,  paragraph 4,
     hereof,  confer powers of procuration  upon one or more persons  whether or
     not  in  the   employ  of  the   Company,   and   accord  to  one  or  more
     "procuratiehouders"  such  title  as  it  shall  choose.

                                 REPRESENTATION

                                   Article  15.

1.    The Company is represented by the Managing Board,  insofar as the law does
      not  otherwise  provide.  If two or  more  Managing  Directors  have  been
      appointed,  the  authority to represent the Company shall also vest in two
      Managing  Directors  acting  together.

      If only one  Managing  Director is  officiating,  such  Managing  Director
       represents  the Company  alone.  The Managing  Board may authorize one or
       more Managing  Directors to represent the Company within the  limitations
       set  by  such  authorization.

2.    If a Managing Director privately enters into an agreement with the Company
      or conducts legal  proceedings  against the Company,  the Company shall be
      represented by a Supervisory Director to be designated for that purpose by
      the  Supervisory  Board.  The General  Meeting of  shareholders  is always
      competent  to  designate  one  or  more  other  persons  for that purpose.

       In all other matters of conflicting interests between a Managing Director
       and the Company,  the Company shall be represented in conformity with the
       first  paragraph  of  this  Article.

                                SUPERVISORY  BOARD

                                   Article  16

1.   The  management by the Managing  Board and the general course of affairs of
     the Company and of the enterprise  connected with it shall be supervised by
     a  "Raad  van  Commissarissen"  (Supervisory  Board).



  136
     The  "Commissarissen"  (Supervisory  Directors)  shall  give  advice to the
     Managing Board. In the exercise of their duties, the Supervisory  Directors
     shall let  themselves  be guided by the interests of the Company and of the
     enterprise  connected with it. The Managing Board shall in good time supply
     to the Supervisory  Board the data and further  particulars  required for a
     proper  performance  of  its  duties.

2.   Upon a person being recommended for appointment as Supervisory Director the
     data and  particulars  concerning  the  candidate  required in pursuance of
     Article 252, para. (3) of Book 2 of the Civil Code shall be furnished.  The
     reasons  for  such  recommendation  shall  be  stated.

3.   If there is more than one Supervisory  Director,  the Supervisory Board may
     appoint one of them to the chairman; the latter's title shall be "President
     Commissaris".  The  Supervisory  Board shall appoint a secretary,  from its
     body  or  otherwise.

     Furthermore,  the  Supervisory  Board may appoint from its body one or more
     "gedelegeerde  Comrnissarissen"  (delegated Supervisory  Directors),  whose
     task shall be to keep more  frequent  contact with the Managing  Board.  He
     (they)   shall   report  to  the   Supervisory   Board.   The   offices  of
     "President~Commissaris  and  "gedelegeerde  Commissaris" may be held by one
     and  the  same  person.

4    The  General  Meeting  of  Shareholders  may  allocate  to the  Supervisory
     Directors or to one or more of them a fixed  remuneration or a remuneration
     depending in whole or in part upon the Company's results. Expenses shall be
     refunded  to  them.

5.   A  Supervisory  Director  shall  retire  from  office  at the  Close of the
     ordinary annual General Meeting of Shareholders  held in the financial year
     in  the  course  whereof  he  attains  the  age  of  seventy-two  years.

6.  The  Supervisory  Board  may  suspend  a  Managing  Director  from  office.

                                   Article  17.

1.   The  Supervisory  Board may provide  that one or more of its members  shall
     have access to all  business  premises in use of by the Company and that he
     (they) shall have  authority to inspect all the books,  correspondence  and
     other records and to take  cognizance of all acts and things that have been
     transacted  or  done,  or  that  he  may  exercise part of the said powers.

2.   The  Supervisory  Board shall meet  whenever  one of its  members  shall so
     request.  It  shall  pass  resolutions  by  absolute  majority  of  votes.

     If the votes are equal no  resolution  shall come into being,  unless there
     are more than two Supervisory  Directors and one of them has been appointed
     as "President-Commissaris", in such event the "President-Commissaris" shall
     have  a  deciding  vote.

3.   Subject to the  provisions of para.  (4) of this Article,  the  Supervisory
     Board may not take  resolutions,  if the  majority  of the  members  is not
     present.

4.   The  Supervisory  Board may also pass  resolutions  without a meeting being
     held,  provided in writing,  by telegram,  by teleprinter or by telefax and
     provided  all  Supervisory  Directors  declare  in  favor  of the  proposal
     concerned.  A resolution which has been taken in this manner shall be noted
     in the book,  wherein the proceedings at meetings of the Supervisory  Board


  137
     are recorded,  which book will be kept by the Secretary of the  Supervisory
     Board; the records,  evidencing any such  resolution,  shall be attached to
     the  minute  book.

5.   If so invited,  the  Managing  Directors  shall  attend the meetings of the
     Supervisory  Board and shall furnish all such  information  required by the
     Supervisory  Board.

6.   The Supervisory Board may at the Company's cost and expense ask the opinion
     of experts on such matters as the  Supervisory  Board shall deem  desirable
     for  a  proper  performance  of  its  duties.

7.   If there is only one Supervisory Director,  such Supervisory Director shall
     be vested with all such powers and obligations as are conferred and imposed
     by Statute and by these Articles of Association upon the Supervisory Board,
     the  "Pesident-Commissaris"  and  the  "gedelegeerde  Commissaris".

8.   The  Supervisory  Board may, with due observance of the provisions of these
     Articles of Association,  draw up rules,  regulating matters concerning the
     Supervisory  Board  internally.

                         GENERAL  MEETING  OF  SHAREHOLDERS

                                   Article  18.

1.   The ordinary  general  meeting of  shareholders  shall annually be held not
     later  than  within  six  months  after  the  end  of  the  financial year.

2.  At  these  meetings:

     a.  the annual written report to be  delivered by the Managing  Board  upon
         the state of  the Company's affairs and the management thereof shall be
         dealt  with;

     b.  the  annual  account and the appropriation of the profit shall be dealt
         with;

     c.  all such further business shall,  with due observance of Article 224 of
         the second Book of the Civil Code,  be dealt with as has been placed on
         the  agenda  of  the  meeting;

     d.  vacancies  shall  be  filled.

3.   Extraordinary  general meetings of shareholders  shall be held whenever the
     Managing  Board  or  the  Supervisory  Board  shall  call  the  same.

4.   Such  meetings  shall be called by the Managing  Board and the  Supervisory
     Board if  shareholders  and/or  holders of depositary  receipts for shares,
     representing  at least ten per cent. of the entire issued  capital shall so
     request the Managing Board and the Supervisory Board in writing, specifying
     at  the  same  time  the  nature  of  the  business  to  be  dealt  with.

     If no member of the Managing Board or the  Supervisory  Board shall in such
     event call a General  meeting of  Shareholders  thus that it is held within
     four weeks of the day of receipt of such request, each requisitionist shall
     have power to call such meeting himself, with due observance of and subject
     to  the  relative  provisions of the law and these Articles of Association.





  138
                                        Article  19.

1.   General  meetings  of  Shareholders  shall be held at the  place  where the
     Company's  Registered  Office  is  situated.

     In a general meeting held elsewhere,  valid  resolutions  shall may only be
     capable of being taken  provided the entire issued  capital is  represented
     and  all  holders  of  depositary  receipts  are  present  or  represented.

2.   Subject to the  provisions  of Article  18,  para 4,  hereof  notice of any
     meeting shall be given by a managing Director or a Supervisory  Director by
     means of  registered  letters  sent to the  addresses of  shareholders  and
     holders  of  depositary  receipts  for  shares,  as stated in the  register
     mentioned  in Article 7 hereof.  The term of such notice  shall be at least
     fourteen  days,  not counting the day, on which notice is given and the day
     appointed  for  the  meeting.

     The  convening  notice shall specify the nature of the business to be dealt
with.

3.   If the  regulations  set by Statute or by these  Articles of Association in
     respect of the holding of meetings and  announcement  of the business to be
     transacted have not been complied with, valid  resolutions  shall,  without
     prejudice to para. l, second sentence,  nevertheless be taken, provided the
     entire issued capital is represented at the meeting  concerned and provided
     any  such  resolution  is  carried  unanimously.

                                   Article  20.

1.   The General  Meeting shall be presided  over by a person  designated by the
     Supervisory   Board  from  among  its  body  or  otherwise.   Failing  such
     designation  the General  Meeting  itself  shall choose its  chairman.  The
     chairman  shall  designate  the  secretary  of  the  meeting.

2.   The secretary shall keep minutes of the business transacted at any meeting,
     unless a notarial  record  thereof is drawn up. Each Managing  Director and
     each Supervisory Director, as well as chairman of the meeting, shall at all
     times have  authority to order such notarial  record to be drawn up, at the
     Company's  cost  and  expense.

     The minutes shall be confirmed by the meeting  concerned or by a subsequent
     meeting  and shall in witness  thereof be signed by the  persons who act as
     chairman and  secretary at the meeting,  at which such  confirmation  takes
     place.

                                   Article  21.

1. At the  General  Meeting of  Shareholders  one vote may be cast in respect of
each  share.

2.  Blank  votes  and  invalid  votes shall be regarded as not having been cast.

3.   Shareholders  and holders of  depositary  receipts may have  themselves  be
     represented  at  any  meeting  by  a  proxy  duly  authorized  in  writing.

4.   All resolutions shall be adopted by an absolute  majority of votes,  unless
     these  Articles  of  Association  prescribe  a  larger  majority.

5.   The Chairman  shall  determine  the way of voting,  provided  that upon the
     request  of a person  entitled  to vote,  voting  persons  shall so demand,
     voting concerning the appointment of persons, the suspension and removal of
     persons  from  office  shall  be  by  folded,  unsigned  ballot-papers.
  139

6.   If, the votes are equal,  a second  meeting  shall be held not earlier than
     three  weeks and not later than seven  weeks  after the first  meeting,  at
     which a fresh vote shall be taken.  If at this second meeting the votes are
     also equal,  then the General Meeting of Shareholders  shall appoint one or
     more (provided  always  consisting of an uneven  number)  expert(s) for the
     purpose of taking a decision  on the  proposal  concerned.  If the  General
     meeting of Shareholders shall fail to reach agreement on the appointment of
     the expert(s), this expert/these experts shall be appointed by the Chairman
     of the Chamber of Commerce and Industry, in whose district and jurisdiction
     the Company's  Registered office is located,  upon the application of which
     ever  of  the  persons  entitled  to  vote  first  makes  the  same.

                                   Article  22.

1.   Unless there are holders of depositary  receipts the shareholders  also may
     adopt all  resolutions  which  they are  empowered  to take when in meeting
     without  a  meeting  being  held.

     If no meeting is held, a resolution may only be taken if the holders of all
     the  shares  not held by the  Company  have been  declared  in favor of the
     resolution  concerned  in  writing,  by  telegram,  by telex or by telefax.

2.   A statement  signed by the holders of all the issued shares not held by the
     Company  shall be  considered  to  constitute a  resolution  of the General
     Meeting  of  Shareholders.

     The provision  laid down in this  paragraph  shall not apply,  if there are
     holders  of  depositary  receipts.

3.   A Managing  Director and a  Supervisory  Director  shall enter  resolutions
     which  have been  adopted  in the  manner  as  mentioned  in the  preceding
     paragraphs of this Article in the book,  wherein the proceedings at General
     Meetings of Shareholders are recorded,  which entry shall be signed by them
     and  which  shall  be  read  out  at  the  next  General  Meeting.

     In addition,  the records  evidencing the taking of such a resolution shall
     be  attached  to  the  minute-book  of  the  General  Meetings.

                        FINANCIAL  YEAR  -  ANNUAL  ACCOUNTS

                                   Article  23.

1.  The  financial  year  shall  be  the  calendar  year.

2.   Every year the  Managing  Board shall  within five months  after the end of
     each  financial  year  subject to  extension  of this period by the General
     Meeting of Shareholders  with term of not longer than six months on account
     of extraordinary  circumstances draw up the annual account,  which shall be
     submitted  to  the  General  Meeting  for  confirmation.

     The annual  accounts  shall be  accompanied  by the  annual  report and the
     further data, referred to article 392, para 1, second Book, Civil Code, all
     this  as  far  as  applicable  to  the  Company.

     The annual  account  shall be signed by all the Managing  Directors and all
     the Supervisory  Directors;  if the signature of one or more of them fails,
     the  reason  therefor  shall  be  stated  on  the  document  concerned.




  140
3.   Confirmation  of the annual  accounts by the General Meeting shall - unless
     the said  Meeting  makes a  reservation  -  constitute  a discharge  to the
     Managing Board in respect of its management during the past financial year,
     and a  discharge  to the  Supervisory  Board in respect of its  supervision
     thereof,  subject to the  provisions  of Articles 248 and 259 of the second
     Book  of  the  Civil  Code.

4.   From the day, on which notice is given of the General  Meeting,  called for
     the purpose of considering the annual account,  the documents  mentioned in
     para. 2 of this Article  shall until the close of that meeting be available
     at the Company's  office for inspection and perusal by the shareholders and
     the  holders  of  depositary  receipts.

     Each  of  them  may  obtain  full  copies  thereof,  free  of  charge.

     If the accounts are confirmed after alteration,  the immediately  preceding
     sentence  shall  apply  correspondingly  to  he  accounts  as  adopted  and
     confirmed.

                                 PROFIT  AND  LOSS

                                   Article  24.

     The profit shall be at the disposal of the General Meeting of Shareholders.

                                   Article  25.

1.   Distribution to  shareholders  may only be made to the extent the Company's
     own capital exceeds the aggregate of the paid up and called for part of the
     capital,  increased by the reserves  that are to be maintained by virtue of
     the  law.

2.   Distribution  of profit  shall only be made after the  confirmation  of the
     annual  account  from  which  the  distribution  appears  to  be  allowed.

3.   If the  General  Meeting  of  Shareholders  shall so  provide,  an  interim
     dividend shall be paid out, but only in case the requirement of paragraph 1
     is  met.

4.   The General Meeting of Shareholders may provide for dividends  partially or
     wholly  to  be  paid  in  an  other  manner  than  in  cash.

5.   A deficit may only be set off against reserves that are to be maintained by
     virtue  of  the  law  in  so  far  as such set off is permitted by the law.
6.   Dividends  shall be made  payable  not later than one month of their  being
     declared  unless  another  due  date is  fixed by the  General  Meeting  of
     Shareholders.

7.   Dividend   claims  shall  become  barred  by  lapse  of  five  years  after
     commencement  of the day after the date on which  they have  become due for
     payment.

                                   WINDING-UP

                                   Article  26.

1.   If the Company is dissolved  in  pursuance  of a resolution  of the General
     Meeting,  its affairs shall be  liquidated by the Managing  Board under the
     supervision of the Supervisory Board, if and to the extent that the General
     Meeting  shall  not  otherwise  resolve.


  141
2.   The General  Meeting shall fix the  remuneration  of the liquidators and of
     the  persons  if  any  charged  with  the  supervision  of the liquidation.

3.   The liquidation shall be effected in accordance with the relative statutory
     provisions.  During the  liquidation  the  provisions of these  Articles of
     Association  shall  as  far  as  possible  continue  in  force.

4.   The amount of the Company's business-assets remaining after satisfaction of
     all  debts  shall be  distributed  among the  shareholders  pro rata to the
     nominal  amount  of  the  shares  held  by  them.

5.   The Company's  books,  records and other data carriers shall for the period
     prescribed  by the law remain in the custody of the person  designated  for
     that  purpose  by  the  General  Meeting.

                             Transitional  Provision

     The first  financial  year of the company shall end on the thirty first day
     of  December  nineteen  hundred  and  ninety-nine.

                                 Final  statement

     Finally,  the  appearing  persons  have  declared:

     a.  At the  incorporation,  the  issued  share  capital  amounts  to  forty
         thousand  guilders (NEG 40.000,--).  The following are participating in
         the  issued  capital:

         The  incorporator  M.E.S.T.  Management  of Environmental Solutions and
         Technology  for  20.000 shares and the incorporator TNO Management B.V.
         for  20.000  shares.

     The issuance  takes place at par value.  The issued share  capital has been
     paid up in cash.  Payment in foreign  currency is permitted.  The documents
     which must be  attached  by virtue of Article  2:203a  Civil Code have been
     attached to this instrument. The company accepts the payments on the shares
     issued  at  the  incorporation.

     b.  The  first  members  of  the  management  board  are:

         Mrs.  Marieke  Xxxxxxx Xxxxxxxx,  residing at  Xxxxxxxxxxxxxx  00, 1076
        PX  Amsterdam,  born  at  Koedijk  on  6  April  1968

                                       and

         Xx. Xxxxxxxx  Xxxx, residing at  Xxxxxxxxxxxxx  000, 0000 XX Xxxxxxxxx,
         born  at  The  Hague  on  27  October  1949.

     c.  The  ministerial  declaration of no objections was granted on the third
         day of May  nineteen  hundred  and  ninety-nine,  under  number  B.  V.
         1073369, as stated in the certificate,  which has been attached to this
         instrument.










  142

The  appearing  persons  are  known  to  me,  civil  law  notary.

--------------------------------------------------------------------------------
THIS DEED, drawn up to be kept in the civil law notary's custody was executed in
Rotterdam,  on  the  date  first  above  written.

Before  reading out, a concise  summery of the contents of this  instrument  was
given  to  the  appearing  persons.

They then  declared  that they had  noted the  contents  and did not want a full
reading thereof. Thereupon, after limited reading, this instrument was signed by
the  appearing  persons  and  by  me,  civil  law  notary.


Enclosure  2

                 AGREEMENT  WITH  REGARD  TO  THE  SUBORDINATED  LOAN

1.   M.E.S.T.  B.V.,  located  in  Amsterdam,  hereafter  referred  to  as  MEST

                                            and

2. Manure and Sludge Technology B.V.,  located in Apeldoorn,  hereafter referred
to  as  MST

CONSIDERING  THAT:

-    MEST has established  collaboration with TNO Management BV, A subsidiary of
     the Dutch Organization of Applied Scientific  Research  (hereafter referred
     to  as  TNO)  for  the  treatment  of  sludge  and  manure.

-    MEST and TNO Management BV have established MST and have agreed upon in the
     Shareholders  Agreement  that  MEST  provides  a  subordinated loan to MST.

-    Parties  wish  to  have  their  agreement  for  a  loan  in  writing.

THE  PARTIES  HAVE  AGREED  UPON  THE  FOLLOWING:

1.   MEST  places NLG 2,000,000 at the disposal of MST as a loan by transferring
     the  funds  to  the  account  of  MST  at  the  RABO  Bank  in four phases;

      Phase 1: NLG 300,000 (three hundred thousand  guilders) due on February 1,
      1999;  Phase  2: NLG  500,000  (Five  hundred  thousand  guilders)  due on
      February 1, 1999; Phase 3: NLG 1,000,000 (one million guilders) due on May
      1, 1999; Phase 4: NLG 200,000 (two hundred  thousand  guilders) due on the
      date the project  ends,  estimated on December  31,  1999.  With regard to
      written  statements  made by TNO regarding the development of the research
      for this project,  Parties can decide deviation from the earlier mentioned
      dates  by  mutual  agreement.

2.   MST will pay off the loan starting on December 31, 1999, in yearly terms of
     50% of the positive operating profit of MST over the fiscal year. Operating
     profit means: the operating profit from normal  management after payment of
     taxes  and  before  unusual  profit  and  charges.

3.   MST owes MEST a yearly  interest of 5% (five percent) on the unpaid part of
     the total  amount.  The interest will be paid yearly at the end of the year
     starting  on  December  31,  l999.This  comes  into  force on the date this
     agreement  is  signed.


  143
4.   Within a month after the end of the fiscal year, MST will pay due payments,
     interest  and, if  necessary,  due sales tax by bank transfer to an account
     number  given  by  MEST  mentioning  "loan  MST.

5.   MST has the right to add due  interest to the due total amount when this is
     beneficiary  to  the  management  of  MST.

6.   In case MST is in liquidation or stops its activities, MEST will acquit the
     rest  of  the  payments  to  MST.

7.   All  payments  will be made to an account  given by MEST,  no  reduction or
     compensation  will  be  permitted.

8.   Payments  by MST to MEST  will,  in the  first  place,  be with  regard  to
     interest  payments  and secondly, with regard to payment of due repayments.

SUBORDINATION

9.   MEST  declares,  for the benefit of the RABO bank in Apeldoorn  and for the
     benefit of TNO that in case of  termination  of MST, an  agreement  for the
     suspension of payment or bankruptcy of MST, repayment and eventual interest
     of the loan will be paid after all other, at that moment, outstanding debts
     of  MST,  except  the  loans  equal  to  both  parties.

10.  MST  declares  to  take  into account the subordination as described above.

GENERAL  TERMS

11.  This  agreement  comes into  force on the date that the main  amount of the
     loan is paid to the  bank  account  of MST and  ends  when MST has paid all
     interests  and  repayments  to  MEST.

12.  Dutch  law  is  applicable  to  this  agreement,

13.  All disagreements  that arise with regard to this agreement will be brought
     to court with the  competent  lawyer in The Hague,  unless  Parties  decide
     differently.

As  agreed  upon  and  twice  signed:

MST                                       MST
By:         M.A.  Oudejans                By:      Eng.  X.  Xxxx
Title:      Director                      Title:   Director
Date/Place: January 22, 1999, Xxxxxxxxx   Xxxx/Xxxxx:Xxxxxxx 00, 0000, Xxxxxxxxx

MEST
By:         M.A.  Oudejans
Title:      Director
Date/Place:  January  22,  1999,  Amsterdam

Enclosure  3

LICENSING  AGREEMENT

    THE  UNDERSIGNED:

1    The Dutch  Organization  for Applied  Scientific  Research,  TNO,  based in
     2628VK  Deift,  Xxxxxxxxxxxxxxxx  00,  hereafter  referred  to  as  "TNO";

                                            and


  144
2    Manure and Sludge Technology B.V., based in Apeldoorn,  hereafter  referred
     to  as  "MST"  or  "LICENSEE";

TAKING  INTO  CONSIDERATION  THAT:

-    TNO,   especially  the  department   Processes  and   Applications  of  TNO
     Environment, Energy and Process innovation, (hereafter called TNO-MEP), has
     investigated  and has acquired  knowledge for the  application  of zeolites
     with  drying  processes;

-    TNO-MEP  conducted  research,  on  the  basis  of this  technology  for the
     treatment  of  sludge and manure, (hereafter referred to as "Application");

-    TNO has applied for international  patents for the zeolite  technology used
     in drying processes with regard to the treatment of sludge and manure.  The
     patent  number is  PCTINL96/002  15 with the title:  "Method and device for
     heating  and  cooling  food  products"   (from  the  original   application
     NL/1000482,   dated  June  1,  1995)  (hereafter   referred  to  as  Patent
     Application  I);

-    TNO has applied for international  patents for the zeolite  technology used
     in drying processes with regard to the treatment of sludge and manure.  The
     patent  number is  1009619,  dated July 10,  1998,  with the  title:  "Cost
     effective method for treatment and/or disposal of water containing  (waste)
     streams (like  sludges,  sewage,  xxxx,  etc.  based on the  application of
     zeolites",  as defined in the patent application  (hereafter referred to as
     Patent  Application  2);

-    TNO  wishes to  further  develop  and  commercialize  the  Application  and
     therefore has agreed to collaborate with MEST, based in Amsterdam,  through
     its 100% subsidiary TNO Management.  TNO and MEST have  established MST and
     TNO has  agreed to bring the  Patent  applications  into MST as well as the
     Know-how.

-    TNO  and MST wish to  conclude  their  agreement  in writing,  taking  into
     account  the  following  terms;

PARTIES  HAVE  AGREED  AS  FOLLOWS:

 1.  License

1.1  TNO  give the  LICENSEE  exclusive,  non-transferable  license  for  Patent
     application  2 for the further  development  and  commercialization  of the
     Application,  with  the  right of  sub-licensing  conforming  to 1.4.  This
     license  agreement will be registered  with the Patent Office if necessary.
     All  costs  will  be  for  the  licensee.

1.2  The LICENSEE has the rights to use, on a non-exclusive basis, all technical
     knowledge and  experience  with regard to the  Application as stipulated in
     reports  and  publications,  hereafter  referred  to  as  know-how.

1.3  If no patent is given for patent  application  2, this  agreement  stays in
     force  for  the  Know-how  and  the Know-how regarding Patent applications.

1.4  For the manufacturing and sales of manure' conversion installations by MEST
     BV, The LICENSEE  will give a  non-transferable  exclusive  sub-license  on
     Patent  2  and  the  Know-how,  against  payment  of  royalties by MEST BV.

1.5  When Patent 2 cannot be exploited  independently  from Patent 1, or when it
     appears that Patent request 2 will not be honored, TNO will give license to
     the  LICENSEE on Patent I to protect MEST BV's  commercial  options for the
     purpose  of  this  agreement.
  145
1.6  TNO will, at the start of this Agreement,  expand Patent I, on the costs of
     the LICENSEE in countries to be mentioned by the LICENSEE, without changing
     the  rights  as  mentioned  in  1.5  and  3.1.

2.   Financial  agreements  bookkeeping  and  verification

2.1  The due license  compensation to be paid by the LICENSEE,  without right on
     compensation  or  reduction,   totals  NLG  2,000,000  (two  million  Dutch
     guilders)  excluding  VAT.

2.2  The amount as stipulated in 2.1 will be paid, in yearly terms of 50% of the
     positive operating profit of MST over the fiscal year, starting on December
     31,  1999.  Operating  profit  means:  the  operating  profit  from  normal
     management  after  payment  of taxes and before unusual profit and charges.

2.3  The LICENSEE owes TNO, from the date of this  agreement,  a yearly interest
     of 5% (five  percent)  over  the  unpaid  balance  of the  license  fees as
     mentioned  in 2.1.  The  interest  will  be  paid at the end of each  year,
     starting  on  December  31,  1999.

2.4  Within one month after the end of the fiscal year,  the LICENSEE  will make
     due payments,  interest and eventually due turnover taxes, by bank transfer
     to account number ABN-AMRO  511530102 to the attention of TNO, with notice:
     License  98-13:  sludge  treatment.

2.5  The  LICENSEE  is  obliged  to secure  records  of all  facts  and  figures
     necessary  for the  calculation  of the due  payments  of license  fees and
     interest to TNO.  Within three weeks after the end of the fiscal year,  the
     LICENSEE  will  supply TNO with a  declaration  of an  external  registered
     accountant  regarding the due license fees and interest over the past year.

2.6  TNO is allowed  the right to  further  examination  through  an  accountant
     indicated  by TNO.  In this  case the  LICENSEE  is  obliged  to give  full
     collaboration and present its book-keeping or administration.  The costs of
     this investigation will be paid by TNO, unless it appears that the LICENSEE
     paid an  incorrect  amount of license fees and  interest,  in this case the
     LICENSEE  will  repay  all  costs  involved  to  TNO.

3.   Patent  protection  and  -infringement

3.1  During the period of this contract,  TNO will maintain and continue  Patent
     1, with  expansions,  conforming  to 1.6,  and will  maintain  and continue
     Patent 2 at the end of each year, at costs of the LICENSEE. TNO will inform
     the  LICENSEE  by  forwarding  the  complete  correspondence.

 3.2 When one of the Parties  notices  infringement on Patent 2, this Party will
     inform the other Party as soon as possible to consult on necessary actions.
     The Parties will establish accordingly,  in which way they will act against
     the  person(s)  who  infringed.

 3.3 The Parties have the right to protect their rights and  interests,  to take
     necessary  measures,  independently  and  for  own  costs,  at  any  time.

 3.4 All costs  (including  costs for  application,  maintenance,  and  external
     advice) with regard to Patent application 2 and later Patents, will be paid
     by the LICENSEE.  These costs will be paid within thirty days after the end
     of each month on the basis of specified  declarations  delivered by TNO, on
     bank  account  number  ABN-AMRO  511530102  in the name of TNO with notice:
     Patent  costs  98-13:  sludge  treatment.



  146
3.5  TNO will consult with the LICENSEE  regarding the countries in which Patent
     2 is applied  for.  Costs  regarding  countries in which MST wishes to have
     patent  applications,  will be paid by MST conforming to 3.4. When MST does
     not wish to further  maintain  the Patents in different  countries,  TNO is
     allowed to  maintain  Patents for its own costs at any time.  These  patent
     applications  are  not  included  in  this  agreement.

4.   Patent  grant

4.1  From the moment  patent 2 is honored in a country and after full payment of
     license  fees,  as  mentioned  in 2.1 and fees  mentioned  in 4.2, TNO will
     transfer  the  ownership  of Patent 2 and  Know-how to the  LICENSEE.  This
     transfer of ownership will be accepted by the LICENSEE.  All costs involved
     will  be  for  the  account  of  the  LICENSEE.

4.2  For compensation of the transfer in ownership of the Patents  and Know-how,
     the LICENSEE will pay TNO a one time payment of NLG 1,000,000  (one million
     Dutch guilders),  which has to be paid for subscription in the registers of
     the Patent Office by bank transfer to account number: ABN-AMRO 511530102 in
     the  name  of  TNO  with  notice:
     Transfer  of  ownership  98-13:  sludge  treatment.

5.   Non-Disclosure

5.1  The  LICENSEE  is obliged to keep  information  strictly  secret  regarding
     Patent I, Patent 2 and the Know-how, marked as "confidential", unless it is
     necessary to give  information  to third parties with regard to the further
     development and  commercialization  of the  Application.  The LICENSEE will
     ensure strict  confidentiality is observed by these third parties regarding
     the  information  given  by  the  LICENSEE.

5.2  The  non-disclosure  does  not  count  for:

     a.  information  that  is  commonly  known;
     b.  information  of  which  the  LICENSEE  can  prove  was  already  in the
         possession of the LICENSEE at the moment TNO mentioned this information
         was  confidential,  and  this  information  was  not  provided  by TNO;
     c.  information  of  which  the  LICENSEE  can  prove was provided by third
         parties  who  had  the  right  to  give  this  information.

6.   Title  and  Responsibility

6.1  TNO is not  responsible for damage that occurs as a result of the fact that
     Patent 2 and other Patents based on Patent 2 with regard to the Application
     are not granted,  neither will the LICENSEE  have the right to reduction on
     the  license  agreement.

6.2  TNO is not responsible for damage  forthcoming from the use by the LICENSEE
     of the license rights or from the LICENSEE's use of the transferred  Patent
     2 and  Know-how  as  stipulated  in 4.1,  unless  this damage is due to the
     mistakes  of TNO,  or  committed  on  purpose  by TNO.  The  LICENSEE  will
     indemnify  TNO  from  all  claims  of  third  parties.

6.3  TNO is not responsible for faults, whichever, in Patent 2 and the Know-how,
     unless this damage is due to gross mistakes of TNO, or committed on purpose
     by  TNO.

6.4  The  responsibility  of TNO is,  at all  times,  limited  to the  amount of
     payments by the  LICENSEE to TNO with regard to Patent 2 and the  Know-how,
     over  the  year  in  which  the  damage  occurred.


  147
7    The  Coming  into  Force  and  Termination

7.1  This  agreement  comes  into force on the date the  shareholders  agreement
     between TNO Management BV and M.E.S.T.  BV came into force.  Termination of
     the  agreement is possible  conforming to what is stipulated in 7.2 with no
     reduction  of  TNO's  right  on  license  fees  as  stipulated  in  2.1.

7.2 TNO is allowed to terminate this agreement immediately by registered mail in
case:

     a.  The LICENSEE  does not meet its  commitments,  fully or in time or when
         this is not corrected  within thirty days after this was mentioned in a
         letter  from  TNO,  sent  by  registered  mail.
     b.  When the  collaboration  between TNO  Management BV and M.E.S.T.  BV is
         terminated  for  whatever  reason.
     c.  In case of suspension  of payment or  bankruptcy  of the  LICENSEE,  or
         requests  thereof and from distrained and executorial  seizures against
         the  LICENSEE.

7.3  When this agreement terminates, all rights of the LICENSEE, as mentioned in
     this agreement,  terminate.  All  documentation  regarding Patent 2 and the
     Know-how  will  then  be made immediately available by the LICENSEE to TNO.

7.4  In case of  termination,  as mentioned  in 7.2,  the LICENSEE  will have no
     right to restitution or payment  discharge of payments  already made or due
     payments.  A termination as mentioned in 7.2 a and c maintain the rights on
     claims  of  TNO.

8.  Rights  and  disagreements

8.3  Dutch  law  is  applicable  to  this  agreement.

8.4  All  disagreements  which  arise  with  regard to this  Agreement,  will be
     brought to court with the  competent  lawyer in The Hague,  unless  Parties
     decide  differently.

As  agreed  and  twice  signed

TNO                                       TNO
Name:        Ir.  X.X.  Xxxxxx            Name:       Dr.  Ir.  P.  Folstar
Title:       Chairman  of  the  Board     Title:      Member  of  the  Board
Date/Place:  February 1, 1999, Delft      Date/Place: February 1, 1999, DeIft

LICENSEE                                  LICENSEE
Name:        M.A.  Oudejans               Name:       Ing.  X.  Xxxx
Title:       Director                     Title:      Director
Date/Place:  January 22, 1999, Amsterdam  Date/Place:  January  22,  1999

Enclosure  4

SUB-LICENSE  AGREEMENT

THE  UNDERSIGNED:

1.  Manure and Sludge Technology B.V., located in Apeldoorn,  hereafter referred
to  as:
     "MST';

                                             and



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2.  M.E.S.T.  B.V., located in 1076 PX Xxxxxxxxx,  Xxxxxxxxxxxxxx 00, hereafter
     referred  to  as  "MEST"  or  "Sub-Licensee

Taking  into  consideration:

- The Dutch  Organization  for Applied  Technological  Research  TNO  (hereafter
referred  to as "TNO")  and MST have a  licensing  agreement  as  stipulated  in
enclosure 1, by which TNO gives license to MST regarding the Patent  Application
and  Know-how.

- MEST provides advice  regarding  agricultural and  environmental  problems and
MEST will exploit the  above-mentioned  technology after further development for
the  construction  of  manure  conversion  plants  and  installations.

- MST wishes to give a sub-license  to MEST  regarding the Patents and Know-how,
for  the  manufacturing  and  sales  of  manure  conversion  installations.

- MST and MEST wish to put this  agreement  with  regard to the  sub-license  in
writing,  under  the  conditions  mentioned  hereafter.

Have  agreed  as  follows:

1.   License

1.1  MST gives the  SUB-LICENSEE  the  exclusive,  non-transferable  sub-license
     regarding  the  patents,  without  the  right  to  sub-licensing,  for  the
     manufacturing and worldwide sales of manure conversation installations. The
     SUB-LICENSEE  will  accept  this  sub-license.  The  Sub-License  will,  if
     necessary, be registered with the Patent Office. All costs involved will be
     for  the  account  of  the  SUB-LICENSEE.

1.2  In respect to the extent of the use of its rights, as stipulated in 1.1 and
     the manufacturing of manure conversion installations, the SUB-LICENSEE will
     be allowed to use the  knowledge  and  experience  from MST  regarding  the
     patent  as stipulated in enclosure 2 (hereafter referred to as "Know-how").

1.3  When the Patent  Application(s) is (are) not honored,  this agreement stays
     in force  concerning  the Know-how and the  know-how  regarding  the Patent
     Application(s).


1.4  MST is  permitted  at all  times,  to use  the  Patent  Application(s)  and
     Know-how  itself  and  for  third  parties.

1.5  MST  will  make  all   improvements  in  the  Know-how   available  to  the
     SUB-LICENSEE.  The SUB-LICENSEE will apply these improvements in the manure
     conversion  installations,  unless this is not reliable.  When SUB-LICENSEE
     itself  discovers  and  applies  improvements  in the  Know-how,  he/she is
     obliged to inform MST about these  improvements.  The rights with regard to
     such  improvements  will  be  fully,  and  for  free be transferred to MST.

1.6  When the  SUB-LICENSEE  in the opinion of MST,  does not sell enough manure
     conversion  installation  to its  potential  clients,  MST is  permitted to
     terminate this agreement,  or the exclusivity of rights,  after  consulting
     the  SUB-LICENSEE.

2.  Financial  regulations,  book  keeping  and  verification




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2.1  During 15 years from the date on which the SUB-LICENSEE installs and brings
     into use the first manure  conversion  installation,  the SUB-LICENSEE owes
     MST payment  contributions on the gross  manufacturing  costs of the manure
     conversion  installation,  as  follows;

-    15% of the gross  manufacturing  costs of manure  conversion  installations
     numbers  1  to  10;
-    12.5% of the gross manufacturing  costs of manure conversion  installations
     numbers  1  to  25;
-    10% of the  gross  manufacturing  costs of manure  conversion  installation
     numbers 26 and further.  Gross manufacturing costs means: the complete cost
     price  that  the  SUB-LICENSEE  has to pay  with a  subcontractor  for  the
     manufacturing  of  the  manure  conversion  installations.

2.2  The  SUB-LICENSEE  will pay due  contributions  every  quarter of the year.
     Within 30 days after the end of the quarter of the year,  the  SUB-LICENSEE
     will  pay the due amount by bank transfer to an account to be given by MST.

2.3  The due payment  contributions  are net amounts.  All taxes,  increases and
     other costs are for the account of the SUB-LICENSEE and will be paid by the
     SUB-LICENSEE  when  these  costs  are  submitted  to  MST.

2.4  The  SUB-LICENSEE  is  obliged  to keep  secure  book-keeping  of all facts
     regarding the calculation of  contributions to be paid to MST. Within three
     months after the last fiscal year, the SUB-LICENSEE will give a declaration
     of an  external  registered  accountant  specified  to  calculate  the  due
     contributions  of  the  foregoing  year.

2.5  MST is  entitled  the right to  further  financial  examination  through an
     accountant  indicated by MST. In this case the  SUB-LICENSEE  is obliged to
     fully  co-operate  and present its  records and  administration.  The costs
     involved in this  examination,  will be paid by MST, unless it appears that
     the SUB-LICENSEE has given, or paid incorrect amounts on contributions,  in
     which  case  the  SUB-LICENSEE  will  refund  all  the  costs  involved.

3.   Patent  protection,  Breach  of  Patent  and  Patent  Infringement

3.1  During the duration of this agreement, MST will inform the SUB-LICENSEE, at
     the  end  of  each  year,  regarding  the  status  of honoring the Patents.

3.2  When  one of the  Parties  notices  breach  of the  Patents  or the  Patent
     Applications,  this party will  contact the other party as soon as possible
     to  discuss  eventual  sanctions.

3.3  Parties are at all times,  entitled to protect  their rights and  interests
     without  foregoing  consultation  and take necessary  measures on their own
     account.

4.   Non-Disclosure

4.1  The SUB-LICENSEE is obliged to keep  information  strictly secret regarding
     Patent 1, Patent 2 and the Know-how, marked as "confidential", unless it is
     necessary to provide such  information  to third parties with regard to the
     further  development  and   commercialization   of  the  Application.   The
     SUB-LICENSEE will ensure strict confidentiality agreements with these third
     parties  regarding  the  information  provided  by  the  Licensee.






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4.2  The  non-disclosure  does  not  count  for:

     a.  information  that  is  commonly  known;
     b.  information of which the  SUB-LICENSEE  can prove that this information
         was in possession of the  SUB-LICENSEE at the moment MST mentioned this
         information was confidential,  and this information was not provided by
         MST;
     c.  information of which the  SUB-LICENSEE can prove, was provided by third
         parties  that  had  the  right  to  give  this  information.

5.   Title  and  responsibility

5.1  MST is not  responsible  for damage that occurs as a result of Patent 2 and
     other Patents based on Patent 2 with regard to the  Application,  not being
     fully  honored.

5.2  MST  is not  responsible  for  damage  forthcoming  from  the  use,  by the
     SUB-LICENSEE  of the license rights or from the  SUB-LICENSEE's  use of the
     license rights,  unless this damage is due to mistakes of MST, or committed
     on purpose by MST. The  SUB-LICENSEE  will indemnify MST from all claims of
     third  parties.

5.3  MST is not  responsible  for faults,  whichever,  in the manure  conversion
     installations,  unless  this  damage is due to gross  mistakes  of MST,  or
     committed  on  purpose  by  MST.

5.4  The  responsibility  of MST is,  at all  times,  limited  to the  amount of
     contributions3  over  the  year  in  which  the  damage  occurred.

6.  The  coming  into  force  and  Termination

6.1  This agreement comes into force on the date the license  agreement  between
     TNO and M.E.S.T. came into force for a period of 15 years or as long as the
     longest Patent validity period. Meanwhile,  termination of the agreement is
     possible  conforming  to  what  is  stipulated  in  1.6  and  6.2.

6.2  MST  is entitled to terminate this agreement immediately by registered mail
     in  case:

a.   The SUB-LICENSEE  does not meet its  commitments,  fully or in time or when
     this is not  corrected  within  thirty days after this was  mentioned  in a
     letter  from  MST,  sent  by  registered  mail.
b.   When the  collaboration  between  TNO and MST is  terminated  for  whatever
     reason,  without  the  patent  being  transferred  in  ownership  to  MST.
c.   In case of  suspension of payment or  bankruptcy  of the  SUB-LICENSEE,  or
     requests thereof,  and from distrained and executorial seizures against the
     SUB-LICENSEE.

6.3  When  this  agreement  terminates,  all  rights  of  the  SUB-LICENSEE,  as
     mentioned in this agreement,  terminate.  All  documentation  regarding the
     Patent in the possession of the  SUB-LICENSEE  relating to Applications and
     Know-how will  immediately be made available to MST.  During a period after
     termination,  to be determined by the Parties,  the SUB-LICENSEE is allowed
     to sell manure conversion  installations  which are still in stock with the
     SUB-LICENSEE  against  payment of  contributions  to MST  conforming to the
     conditions  as  specified  in  this  agreement.

6.4  In case of termination as mentioned in 6.2, the  SUB-LICENSEE  will have no
     right to  restitution or payment  discharge of amounts  already made or due
     payments and will only be  discharged  from  financial  obligations  in the
     future.  A termination  as stipulated in 6.2 a and c maintain the rights on
     claims  of  MST.
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7.   Rights  and  Disagreements

7.1  Dutch  law  is  applicable  to  this  agreement.

7.2  All  disagreements  which  arise  with  regard to this  Agreement,  will be
     brought to court with the  competent  lawyer in The Hague,  unless  Parties
     decide  differently.

As  agreed  upon  and  twice-signed

MST                                      MST
Name:  M.A.  Oudejans                    Name:  Ing.  X.  Xxxx
Title:  Director                         Title:  Director
Date/Place: January 22, 1999, Amsterdam  Date/Place: January 22, 1999, Amsterdam

SUB-LICENSEE

Name:  M.A.  Oudejans,  on  behalf  of  MEST  BV
Title:  Director
Date/Place:  January  22,  1999,  Amsterdam










































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