AQUA CLARA BOTTLING & DISTRIBUTION INC, SB-2, 1998-01-15

AQUA CLARA BOTTLING & DISTRIBUTION INC
SB-2, 1998-01-15

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As filed with the Securities and Exchange Commission on January 15, 1998
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.
(Name of registrant as specified in its charter)

Colorado 84-1352529
(State or Jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

10720 72nd Street North, Suite 305 John H. McAvoy, President
Largo, Florida 33777 10720 72nd Street North, Suite 305
(813) 548-7100 Largo, Florida 33777
(Address, including zip code, and telephone number,
including area code (813) 548-7100
of Registrant's principal executive offices)(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
COPY TO:
Jehu Hand, Esq.
Hand & Hand
24901 Dana Point Harbor Drive, Suite 200
Dana Point, California 92629
(714) 489-2400
Facsimile (714) 489-0034

Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after the effective date of this registration
statement.

If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933 other than securities offered only
in connection with dividend or
interest reinvestment plan, please check the following box: [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box:
[ ]

<PAGE>

CALCULATION OF REGISTRATION FEE

Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered Be Registered Per Share(1) Offering Price Registration Fee

Common Stock issuable upon
conversion of Series A
<S> <C> <C> <C> <C>
Convertible Preferred Stock(2)....... 1,333,334 $2.875 $ 3,833,335 $ 1,161.62
Common Stock offered by
selling shareholders(3).............. 195,000 $2.875 $ 560,625 $ 169.89
Common Stock, issuable upon
exercise of warrants(4).............. 50,000 $3.50 $ 175,000 $ 53.03
Common Stock, issuable upon
exercise of options(5)............... 50,000 $4.20 $ 210,000 $ 63.64
Common Stock, issuable upon
exercise of options(6)............... 50,000 $4.70 $ 235,000 $ 71.21
Common Stock, issuable upon
exercise of options(7)............... 50,000 $5.60 $ 280,000 $ 93.33
Common Stock, issuable upon
exercise of options(8)............... 50,000 $7.00 $ 350,000 $ 106.06
Total(9)............................... 1,778,334 $ 5,643,690 $ 1,718.78

</TABLE>

(1) Estimated solely for purposes of calculating the registration fee.
(2) Includes 1,333,334 shares issuable upon conversion of 2,500 shares
($2,500,000 aggregate principal amount) of Series A Convertible Preferred
Stock at the lower of 65% of the closing bid price of the Common Stock
averaged over the five trading days prior to the date of conversion, or
$1.875. The maximum offering price per share is based upon the closing
price of the Common Stock on January 13, 1998, or $2.875 since it is
higher than the estimated conversion price per share of the Series A
Convertible Preferred Stock (in accordance with Rule 457(g)).
(3) Includes 100,000 shares already issued and outstanding.
(4) Includes 50,000 shares issuable upon exercise of options at $3.50 per share.
(5) Includes 50,000 shares issuable upon exercise of options at $4.20 per share.
(6) Includes 50,000 shares issuable upon exercise of options at $4.70 per share.
(7) Includes 50,000 shares issuable upon exercise of options at $5.60 per share.
(8) Includes 50,000 shares issuable upon exercise of options at $7.00 per share.
(9) Includes in each case reoffers of the Common Stock offered hereby and shares
issuable pursuant to antidilution provisions pursuant to Rule 416.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE>

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION
PROSPECTUS
AQUA CLARA BOTTLING AND DISTRIBUTION, INC.
1,778,334 Shares of Common Stock
(no par value)

The estimated 1,778,334 shares (the "Shares") of Common Stock, no par
value (the "Common Stock") of Aqua Clara Bottling and Distribution, Inc., a
Colorado corporation (the "Company") are being offered by the selling
stockholders (the "Selling Shareholders") and include an estimated 1,333,334
shares issuable upon conversion of $2,500,000 in principal amount of Series A
Convertible Preferred Stock (the "Series A Preferred"), 250,000 shares issuable
upon exercise of warrants and options, and 195,000 shares currently outstanding.
The Company will not receive any proceeds from the sale of Common Stock by the
Selling Shareholders. See "Selling Shareholders." The expenses of the offering,
estimated at $42,000, will be paid by the Company.

The Common Stock currently trades on the Electronic Bulletin Board under
the symbol "AQCB" On January 13, 1998, the last sale price of the Common Stock
as reported on the Electronic Bulletin Board was $2.875 per share.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PURCHASE OF THESE SECURITIES INVOLVES RISKS.
See "Risk Factors" on page 4.

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

The date of this Prospectus is ___________, 1998
1

<PAGE>

No person has been authorized in connection with this offering to give any
information or to make any representation other than as contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any
securities covered by this Prospectus in any state or other jurisdiction to any
person to whom it is unlawful to make such offer or solicitation in such state
or jurisdiction. Neither the delivery of this Prospectus nor any sales made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date hereof.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement under the Securities Act
with respect to the securities offered hereby with the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. This Prospectus, which is a part of the
Registration Statement, does not contain all of the information contained in the
Registration Statement and the exhibits and schedules thereto, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration Statement,
including all exhibits and schedules thereto, which may be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at its Regional Offices
located at 7 World Trade Center, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 at
prescribed rates during regular business hours. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, each
such statement being qualified in its entirety by such reference. The Company
will provide, without charge upon oral or written request of any person, a copy
of any information incorporated by reference herein. Such request should be
directed to the Company at 10720 72nd Street North, Largo, Flordia, 33777,
telephone (813) 548-7100.

As of the date of this Prospectus, the Company became a reporting company
under the Exchange Act and in accordance therewith in the future will file
reports and other information with the Commission. All of such reports and other
information may be inspected and copied at the Commission's public reference
facilities described above. The Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the Commission. The address of such site
is http://www.sec.gov. In addition, the Company intends to make available to its
shareholders annual reports, including audited financial statements, unaudited
semi-annual reports and such other reports as the Company may determine.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the
more detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus.

The Company

Aqua Clara Bottling & Distributors, Inc., a Colorado corporation (the
"Company") produces, bottles and sells non-sparkling purified drinking,
distilled and natural spring water products.

According to Beverage Marketing, the total U.S. market for bottled water
has grown from 1.6 billion gallons sold in 1987 to over 3.1 billion gallons in
1996, and accounted for approximately $3.6 billion in wholesale sales during
1996. Non-sparkling water comprises over 87% of the U.S. bottled water market
and generated $2.7 billion of wholesale sales in 1996, and is expected to
continue to grow in the future. PET (an acronym for polyethylene terephthalate,
a premium clear plastic) packaged products comprise approximately 39% of the
domestically produced non-sparkling water market and have grown from
approximately 83 million gallons in 1987 to approximately 580 million gallons in
1996, representing a compounded annual growth rate of approximately 24%.
PET-packaged products accounted for approximately $921 million of wholesale
sales in 1996. According to Beverage Marketing, PET bottled water is among the
fastest growing beverage categories in the United States. Contributing to the
growth in consumption of non-sparkling water are consumer trends including
health and fitness awareness, municipal tap water quality concern and maturing
soft drink demand, as well as consumer demand for convenience and innovative
packaging. Since April 1997, the Company has generated revenues from its 5
gallon home and office delivery business, but the Company intends to focus its
growth in PET containers ranging from .5 liter to 1.5 liters, and to specialize
in oxygen enriched water; with 40 parts per million (ppm) of oxygen, compared to
7 ppm for tap water. Oxygen richness imparts a light and crisp taste and
management believes that oxygen enriched water is healthier, although no studies
have been made to underlie this conclusion.

The corporate offices of the Company are located at 10720 72nd Street
North, Largo, Florida 33777 and its telephone number is (813) 548-7105.

<TABLE>
<CAPTION>
<S> <C>
Securities Offered:.............................. An estimated 1,778,334 shares of Common Stock, $.001 par
value per share, including an estimated 1,333,334 shares
issuable upon conversion of 2,500 shares of Series A Preferred
Stock at a conversion price per share of Preferred Stock equal
to $1,000 divided by the lower of $1.875 or 65% of the
average closing bid price of the Common Stock on the five
trading days prior to conversion; 250,000 shares issuable upon
exercise of warrants and options; and 195,000 shares currently
outstanding.

Risk Factors..................................... The securities offered hereby involve a high degree of risk and
immediate substantial dilution and should not be purchased by
investors who cannot afford the loss of their entire investment.
See "Risk Factors."

Common Stock Outstanding(1) Before Offering:..... 5,579,122(1) shares

Common Stock Outstanding After Offering:......... 7,162,456(1) shares

NASD Electronic Bulletin Board Symbol............ AQCB

</TABLE>

Risk Factors

The securities offered hereby are highly speculative and involve a high
degree of risk, including, but not necessarily limited to the risk factors
described below. Prospective purchasers should carefully consider the following
risk factors, among others, as well as the remainder of this prospectus, prior
to making an investment in the Company.

<PAGE>

RISK FACTORS

An investment in the securities offered hereby is speculative in nature
and involves a high degree of risk. In addition to the other information in this
Prospectus, the following factors should be considered carefully in evaluating
the Company and its business.

Limited History of Business Operations; Management of Growth

The Company has limited operating history, having commenced operations
in April 1997. The Company's operating history to date has been limited to the
5-gallon delivery market, and the Company has no experience in the PET market.
The Company will be required to build a management infrastructure as it devotes
significant managerial resources to build its PET business. As a result of the
increase in operating expenses caused by this expansion, operating results may
be adversely affected if sales do not materialize, whether due to increased
competition or otherwise. The can be no assurance that the Company will achieve
significant sales or achieve profitability. As a result, the Company believes
that period to period comparisons of its results of operation are not
necessarily meaningful and should not be relied upon as an indication of future
performance.

Additional Financing Requirements of the Company

At December 31, 1997, the Company had working capital of approximately
$1,450,000. The Company's operations have been financed to date through a debt
offering and through sales of its common stock, most recently through the sale
of 2,500 shares of Series A Preferred Stock. The Company requires significant
capital for the expansion of its operations. The Company believes that the net
proceeds from this Preferred Stock offering should be sufficient to fund its
operations until at least until the end of calendar 1998. However, no assurance
can be given that additional funds will not be required prior to the expiration
of such period or that any funds which may be required will be available, if at
all, on acceptable terms. If additional funds are required, the inability of the
Company to raise such funds will have an adverse effect upon its operations. To
the extent that additional funds are obtained by the sale of equity securities,
the stockholders may sustain significant dilution. If adequate capital is not
available the Company will have to reduce or eliminate its planned expansion
activities, which could otherwise ultimately provide significant revenue to the
Company. Even if such additional financing is available on satisfactory terms,
it, nonetheless, could entail significant additional dilution of the equity
ownership of the Company to existing shareholders and the book value of their
outstanding shares.

Competition

The bottled water industry is highly competitive. Nearly all of the
Company's competitors have more experience in the U.S. bottled water market,
have greater financial and management resources and have more established
proprietary trademarks and distribution networks than the Company. The Company
currently competes with respect to bottled water with established national
companies such as The Perrier Group of America, Inc. (whose brands include
Arrowhead Mountain Spring Water, Poland Spring, Ozarka Spring Water, Great Bear,
Deer Park, Ice Mountain and Zephyrhills Natural Spring Water) and Great Brands
of Europe (whose brands include Evian Natural Spring Water and Dannon Natural
Spring Water), as well as numerous regional bottled water companies located in
the United States and Canada. The Company competes not only with other bottled
water producers, but also with producers of other beverages, including, but not
limited to, soft drinks, coffee, juices, beer, liquor and wine. The bottled
water industry also competes for the same consumer who may, when choosing to
drink water, drink tap water or use a home filtration system to filter tap water
for drinking. There can be no assurance that the Company can compete
successfully. See "Business -- Competition."

Ability to Manage Growth

In order to penetrate its bottled water business, the Company must meet
its strategic objectives to produce high quality oxygenated water products,
build its customer base, build its product line and add new distribution
channels. The Company's ability to meet these objectives depends upon (a) the
successful development and equipping of its Clearwater plant (b) the successful
marketing and distribution of its products, (c) the securing of sources of water
(d) the degree to which the Company loses sales to competing water suppliers,
(e) the availability of capital, (f) consumer acceptance of oxygenated water and
(g) general economic and other factors beyond the Company's control. The Company
has never produced and marketed PET packaged products. No assurance can be given
as to the future growth in the Company's business or as to its profitability.
Further growth of the Company will require employment and training of new
personnel, expansion of facilities and expansion of

<PAGE>

management information systems. If the Company is unable to manage its growth
effectively, the Company's profitability and its ability to achieve its
strategic objectives may likely be materially adversely affected.

Fluctuations in Quarterly Operating Results

The Company's revenues are subject to several factors which may result
in fluctuations in the Company's operating results. The bottled water business
is highly seasonal, with increased sales during warmer months. Inclement weather
may negatively impact the Company's business, particularly summers which are
unusually cool or rainy. Fluctuations in retail prices and raw material prices
may produce corresponding fluctuations in the Company's profits. In addition,
the Company expects to make significant investments from time to time in capital
improvements to, among other things, increase capacity. Costs associated with
such improvements may cause an immediate reduction in profit margins unless and
until sales volume increases. The Company's product and packaging mix may change
from time to time and, depending on certain factors, may negatively impact
profit margins. The Company is subject to competitive pricing pressures which
may affect its financial results. Due to all the foregoing factors, it is
possible that in some future quarter or quarters, the Company's operating
results would likely be below the expectations of securities analysts and
investors. In such event, the price of the Common Stock would likely be
materially adversely affected.

Dependence on Key Personnel

The continued success of the Company is largely dependent on the
personal efforts and abilities of
management, including Mr. John S. McAvoy, President and Chief Executive Officer
of the Company, John C. (Jack)
Plunkett, Chief Operating Officer, and Mr. Rand L. Gray, Chief Financial Officer
of the Company. The Company
has entered into employment agreements with these persons but has no key man
life insurance in place. The loss
of any of these executive's services could have a material adverse effect on the
Company. See "Management."

Dependence upon Supplier

The Company currently obtains the water from Silver Springs, in Ocala
Florida. Occurrences beyond the control of the Company including, but not
limited to, drought, and other occurrences, such as water contamination,
geological changes which could interfere with operation or failure of the water
supply to comply with all applicable governmental requirements for mineral and
chemical concentration, could have a material adverse effect on the business of
the Company. The Company believes that adequate supplemental commercial sources
of water exist, but there is no assurance that such commercial sources will be
available in sufficient amounts or if available, obtainable on commercially
reasonable terms. See "Business."

Dependence on Key Suppliers

All of the Company's water products will be expected to be offered in
premium PET bottles. PET bottles are manufactured by a limited number of
suppliers. While the Company believes that it will be able to obtain bottles,
there can be no assurance that the Company will be able to obtain PET bottles
from its suppliers on commercially reasonable terms, particularly at periods of
peak demand. Failure to obtain the necessary packaging materials could have a
material adverse effect on the business of the Company. The Company has no
agreements in place securing a supply of PET bottles. In the event the Company's
requirements for PET bottles are not met, there may be a material adverse effect
on the Company until alternative supplies of PET bottles are found.

Raw Material Prices

Due to the wide range of beverages available to consumers, including
bottled water products, the Company has limited ability to raise prices for its
products. The Company could in the future be affected by higher prices for raw
materials including PET resin and corrugated boxes. The Company might be unable
to pass such higher costs to its customers. As a result, the Company's results
of operations may be adversely affected by future increases in raw material
prices.

Product Liability

The bottling and distribution of bottled water products entails a risk
of product liability, including liability due to the presence of contaminants in
its products. The Company maintains insurance coverage against the risk of
product liability and product recall. However, the amount of the insurance
carried by the Company is limited,

<PAGE>

the insurance is subject to certain exclusions and may or may not be adequate.
In addition to direct losses resulting from product liability and product
recall, the Company may suffer adverse publicity and damage to its reputation in
the event of contamination which could have a material adverse effect on sales
and profitability.

Dependence on Trademarks

The Company has obtained a trademark on the Aqua Clara trademark, and
has applied for federal registrations for other proposed trademarks. The Company
believes that its registered and common law trademarks have significant value
and goodwill and that some of these trademarks are instrumental in its ability
to create demand for and to market its products. There can be no assurance that
the Company's trademarks do not or will not violate the proprietary rights of
others, that they would be upheld if challenged or that the Company would, in
such an event, not be prevented from using the trademarks, any of which could
have a material adverse effect on the Company.

Government Regulation

The Company's operations are subject to numerous federal, state and
local laws and regulations relating to its bottling operations, including the
identity, quality, packaging and labeling of its bottled water. These laws and
regulations and their interpretation and enforcement are subject to change.
There can be no assurance that additional or more stringent requirements will
not be imposed on the Company's operations in the future. Failure to comply with
such laws and regulations could result in fines against the Company, a temporary
shutdown of production, recalls of the product, loss of certification to market
the product or, even in the absence of governmental action, loss of revenue as a
result of adverse market reaction to negative publicity. Any such event could
have a material adverse effect on the Company. See "Business -- Regulation."

Lack of Inventory

The Company intends to maintain a limited amount of finished product
inventory. An event causing the Company's facilities to shut down, even for a
short period, would result in an inability to fill customer orders and
accordingly would have a material adverse effect on the Company's revenues and
customer relations.

Consumer Preferences

The Company believes that the most important factor in the growth of
natural water products has been a change in consumer preferences. Consumer
preferences may be influenced, however, by the availability and appeal of
alternative beverages or packaging as well as general economic conditions, among
other things. No assurance can be given that consumer demand for oxygen enriched
water will exist, grow or will not diminish in the future.

No Cash Dividends

The Company has not paid any cash dividends on its capital stock. The
Company anticipates that its future earnings, if any, will be retained for use
in the business, or for other corporate purposes, and it is not anticipated that
any cash dividends on the Common Stock will be paid in the foreseeable future.
See "Dividend Policy" and "Description of Securities."

Control by Current Shareholders; Anti-Takeover Devices

Upon the consummation of this Offering, and assuming the conversion of
all of the shares into the underlying Common Stock at the rate of $1.875 per
share, management will own 34% of the outstanding shares of Common Stock.
Accordingly, such persons, acting in concert, may be able to elect all of the
Company's directors, increase the Company's authorized capital, dissolve, merge
or sell the assets of the Company and generally direct the affairs of the
Company. See "Principal Shareholders."

In addition, certain provisions in the Company's Articles of
Incorporation and certain provisions of
applicable Colorado law may, under certain circumstances, have the effect of
discouraging, delaying or preventing
a change in control of the Company. See "Description of Securities -- Preferred
Stock."

<PAGE>

No Prior Public Broad Market

Prior to this Offering, the Company's Common Stock has traded on the
NASDAQ OTC Bulletin Board under the symbol "AQCB." Although the Company intends
to apply at some future time to have the Common Stock included in the Nasdaq
SmallCap(R) Market, it does not currently meet the requirements for such listing
and there can be no assurance that the application will be successful nor that a
broad market in the Common Stock will develop, or, if such a market develops,
that it will be sustained. There can therefore be no assurance as to when, if at
all, investors will be able to liquidate their investment in the Company.

Nasdaq Stock Market and Market Illiquidity

The Company's Common Stock does not meet the current Nasdaq listing
requirements for the SmallCap(R) Market. If the Company is unable to satisfy
Nasdaq's requirements for listing, trading, if any, the Common Stock will
continue to be conducted on the NASD's OTC Bulletin Board, established for
securities that do not meet the Nasdaq SmallCap(R) Market listing requirements.
Consequently, the liquidity of the Company's securities could be impaired, not
only in the number of securities which could be bought and sold, but also
through delays in the timing of transactions, reduction in security analysts'
and the news media's coverage of the Company, and lower prices for the Company's
securities than might otherwise be attained.

Risks of Low-priced Stocks; Penny Stock Regulations

Until such time, if any, that the Company's securities are listed on
The Nasdaq SmallCap(R) Market or a registered U.S. securities exchange they will
continue to be subject to Rule 15g-9 under the 1934 Act, which imposes
additional sales practice requirements on broker-dealers which sell such
securities to persons other than established customers and institutional
accredited investors. For transactions covered by this rule, a broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transaction prior to sale.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's Common Stock and may affect the ability of purchasers in this Offering
to sell any of the Common Stock acquired pursuant to this Memorandum in the
secondary market. The Commission's regulations define a "penny stock" to be any
equity security that has a market price (as therein defined) less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. The penny stock restrictions will not apply to the Company's Common
Stock if the Common Stock is listed on The Nasdaq SmallCap(R) Market and has
certain price and volume information provided on a current and continuing basis,
or meets certain minimum net tangible assets and other criteria. There can be no
assurance that the Company's securities will qualify for exemption from these
restrictions. If the Company's Common Stock continues to be subject to the rules
on penny stocks, the market liquidity for the Common Stock could be severely
adversely affected.

Shares Eligible for Future Sale

All but 2,823,850 of the presently issued and outstanding shares of
Common Stock are "restricted securities" as that term is defined under Rule 144
promulgated under the Securities Act. Rule 144 governs resales of such
restricted securities for the account of any person (other than an issuer), and
restricted and unrestricted securities for the account of an "affiliate" of the
issuer. Restricted securities generally include any securities acquired directly
or indirectly from an issuer of its affiliates which were not issued or sold in
connection with a public offering registered under the Securities Act. An
affiliate of the issuer is any person who directly or indirectly controls, is
controlled by, or is under common control with, the issuer. Affiliates of the
Company may include its directors, executive officers and persons directly or
indirectly owning 10% or more of the outstanding Common Stock. Under Rule 144
unregistered resales of restricted Common Stock cannot be made until it has been
held for one year from the later of its acquisition from the Company or an
affiliate of the Company. Thereafter, shares of Common Stock may be resold
without registration subject to Rule 144's volume limitation, aggregation,
broker transaction, notice filing requirements, and requirements concerning
publicly available information about the Company (the "Applicable
Requirements"). Resales by the Company's affiliates of restricted and
unrestricted Common Stock are subject to the Applicable Requirements. The volume
limitations provide that a person (or persons who must aggregate their sales)
cannot, within any three-month period, sell more than the greater of (i) one
percent of the then outstanding shares, or (ii) the average weekly reported
trading volume during the four calendar weeks preceding each such sale. A person
who is not deemed an "affiliate" of the Company and who has beneficially owned
shares for at least one year would be entitled to sell such shares under Rule
144 without regard to the Applicable Requirements. If a broad public market
develops for the Company's Common Stock, the Company is unable to predict the
effect that sales made under Rule 144 or other sales may have on the then
prevailing market price of the Common Stock.

<PAGE>

Risks Associated with Forward-looking Statements

This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act") and the Company
intends that such forward-looking statements be subject to the safe harbors for
such statements under such sections. The Company's forward-looking statements
include the plans and objectives of management for future operations, including
plans and objectives relating to the Company's planned national marketing
campaign and future economic performance of the Company. The forward-looking
statements and associated risks set forth in this Prospectus include or relate
to: (i) the ability of the Company to obtain a meaningful degree of consumer
acceptance for its products and future products, (ii) the ability of the Company
to market its products and future products on a national basis at competitive
prices, (iii) the ability of the Company to develop brand-name recognition for
its products and future products, (iv) the ability of the Company to develop and
maintain an effective sales network, (v) success of the Company in forecasting
demand for its products and future products, (vi) the ability of the Company to
maintain pricing and thereby maintain adequate profit margins, (vii) the ability
of the Company to achieve adequate intellectual property protection for the
Company's products and future products and (viii) the ability of the Company to
obtain and retain sufficient capital for its future operations.

The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that the Company will market and provide
products on a timely basis, that the Company will retain its principal customer,
that there will be no material adverse competitive or technological change in
conditions in the Company's business, that demand for the Company's products
will significantly increase, that the Company's President will remain employed
as such by the Company, that the Company's forecasts accurately anticipate
market demand, and that there will be no material adverse change in the
Company's operations or business or in governmental regulations affecting the
Company or its suppliers. The foregoing assumptions are based on judgments with
respect to, among other things, future economic, competitive and market
conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the Company's
control. Accordingly, although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any such assumption
could prove to be inaccurate and therefore there can be no assurance that the
results contemplated in forward-looking statements will be realized. In
addition, as disclosed elsewhere in the "Risk Factors" section of this
Prospectus, there are a number of other risks inherent in the Company's business
and operations which could cause the Company's operating results to vary
markedly and adversely from prior results or the results contemplated by the
forward-looking statements. Growth in absolute and relative amounts of cost of
goods sold and selling, general and administrative expenses or the occurrence of
extraordinary events could cause actual results to vary materially from the
results contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions must
be made to reflect actual conditions and business developments, the impact of
which may cause the Company to alter its marketing, capital investment and other
expenditures, which may also materially adversely affect the Company's results
of operations. In light of significant uncertainties inherent in the
forward-looking information included in this Prospectus, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the Company's objectives or plans will be achieved.
See "Management's Discussion and Analysis" and "Business."

DIVIDEND POLICY

The Company has not paid any dividends on its Common Stock. The Company
currently intends to retain any earnings for use in its business, and therefore
does not anticipate paying cash dividends in the foreseeable future.

The Company is obligated to pay to holders of Series A Preferred Stock
an 8% annual dividend, equal to $80.00 per share, payable on each July 1
commencing on July 1, 1998. In the option of the Company it may pay such
dividend in shares of Common Stock valued at the Conversion Rate in effect on
July 1, 1998. No dividends may be paid on the Common Stock unless dividends have
been paid to the holders of Series A Preferred Stock.

<PAGE>

MARKET PRICE OF COMMON STOCK

The Company's Common Stock has been listed on the NASD OTC Electronic
Bulletin Board sponsored by the National Association of Securities Dealers, Inc.
under the symbol "AQCB" since August 21, 1997. On January 13, 1998 the closing
bid price as reported by the Electronic Bulletin Board was $2.875.

The following table sets forth the high and low bid prices for the
Common Stock as reported on the Electronic Bulletin Board for each quarter since
August 21, 1997, for the periods indicated. Such information reflects inter
dealer prices without retail mark-up, mark down or commissions and may not
represent actual transactions.

Quarter Ended High Low

September 30, 1997 4.50 1.8437
December 31, 1997 4.0625 2.00

MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations

The Company's sales commenced in April 1997 with the
introduction of its 5 gallon bottled water service. In the nine months ended
December 31, 1997 the Company had $120,367 in sales from this business. Revenues
are comprised of cooler rentals and water sales, and are expected to
continue at
about $20,000 per month during calendar 1998. The Company intends with the
proceeds of its recent offering of Series A Preferred Stock to enter the PET
bottled water market and is actively seeking a purchaser for its 5 gallon water
business.

It is anticipated that sales of PET products will not commence
until April 1998. The Company has no agreements in place with distributors for
its PET bottled water products and there can be no assurance as to future
operating revenues from this business. The Company's operating loss from its 5
gallon water business and general and administrative expenses are expected to be
approximately $80,000 per month in calendar 1998.

General and administrative expenses related to the expansion
of the Company's business are expected to be less than $10,000 per month. The
Company does not intend to manufacture PET water products without firm orders in
hand for its products. However, the Company intends to expand approximately
$300,000 over the next twelve months in advertising, marketing and distribution
costs, which amounts are expected to be expended prior to the receipt of
significant revenues. There can be no assurance as to when, if ever, the Company
will realize significant operating revenues nor attain profitability, if ever.

Liquidity and Capital Resources

As of December 31, 1997, the Company had working capital of
approximately $1,450,000, most of which was comprised of cash. In December 1997
the Company completed a private offering of Series A Convertible Preferred
Stock. The proceeds of the offering were and are being used to refurbish its
Clearwater facility ($300,000), acquire water treatment and processing
equipment, and oxygen enhancement and bottling equipment ($750,000) and
marketing ($250,000) and the remainder for general and administrative expenses
and working capital. Management believes that the cash on hand, together with
cash generated from operations, will be sufficient to meet the Company's cash
requirements until at least December 31, 1998. However, in the event the
Company's business expands beyond the Company's internal projections, or in the
event the Company encounters unforeseen difficulties occasioned by increased
competition, inability to obtain distribution contracts, or other factors, the
Company may be required to obtain additional capital on terms which cannot be
foreseen at this time. The Company has no plans or arrangements with respect to
additional capital sources.

The Company has no lines of credit available to it at this
time. Inflation has not had a significant impact on the Company's results of
operations.

BUSINESS AND PLAN OF OPERATION

<PAGE>

General

Aqua Clara Bottling & Distributors, Inc., a Colorado corporation (the
"Company") organized on July 29, 1996 is the successor to Pocotopaug Investment,
Inc., a Florida corporation and the Company's operating subsidiary, was
("Pocotopaug"). Pocotopaug was organized in August 1995 by John S. McAvoy. The
Company produces and sells non-sparkling purified drinking and distilled and
natural spring water products.

Since April 1997, the Company has generated revenues from its 5 gallon
home and office delivery business, but the Company intends to focus its future
operations in the sale of oxygen enriched water packaged in PET containers
ranging from .5 liter to 1.5 liters, and to specialize in oxygen enriched water;
with 40 parts per million (ppm) of oxygen, compared to 7 ppm for tap water.
Oxygen richness imparts a light and crisp taste and management believes that
oxygen enriched water is healthier, although no studies have been made to
underlie this conclusion.

According to Beverage Marketing, the total U.S. market for bottled
water has grown from 1.6 billion gallons sold in 1987 to over 3.1 billion
gallons in 1996, and accounted for approximately $3.6 billion in wholesale sales
during 1996. Non-sparkling water comprises over 87% of the U.S. bottled water
market and generated $2.7 billion of wholesale sales in 1996, and is expected to
continue to grow in the future. PET (an acronym for polyethylene terephthalate,
a premium clear plastic) packaged products comprise approximately 39% of the
domestically produced non-sparkling water market and have grown from
approximately 83 million gallons in 1987 to approximately 580 million gallons in
1996, representing a compounded annual growth rate of approximately 24%.
PET-packaged products accounted for approximately $921 million of wholesale
sales in 1996. According to Beverage Marketing, PET bottled water is among the
fastest growing beverage categories in the United States. Contributing to the
growth in consumption of non-sparkling water are consumer trends including
health and fitness awareness, municipal tap water quality concern and maturing
soft drink demand, as well as consumer demand for convenience and innovative
packaging.

Industry Overview

The U.S. bottled water market is comprised of three segments:
domestically produced non-sparkling water, domestically produced sparkling water
and imported water, which constituted approximately 65%, 21% and 14%,
respectively, of 1996 U.S. bottled water wholesale sales, according to Beverage
Marketing. The domestically produced non-sparkling water category includes
natural spring water obtained from naturally occurring springs, well water,
distilled water and purified water. Unlike other beverages, bottled water serves
both as a tap water substitute and a refreshment beverage.

Consumer Trends. Contributing to the growth in consumption of
non-sparkling water are consumer trends including health and fitness awareness,
municipal tap water quality concern and maturing soft drink demand, as well as
consumer demand for convenience and innovative packaging. Bottled water,
particularly when packaged in premium PET bottles with sport caps, appeals to
consumers who are sports enthusiasts or whose lifestyles are oriented to health
and fitness. According to Beverage Marketing, consumers' concern over the
quality of municipal water supplies has contributed to an increase in bottled
water consumption. Bottled water has also become an alternative to other
beverages, including soft drinks. According to Information Resources, Inc.
("IRI"), total U.S. gallons sold of soft drinks through food store channels has
increased approximately 10%

<PAGE>

from 1994 through 1996. Over the same time period, gallons sold of
ready-to-drink juices have increased approximately 1%. In contrast,
non-sparkling bottled water gallons sold have increased approximately 21% from
1994 to 1996, according to Beverage Marketing. Bottled spring water is natural
and caffeine and additive free. These attributes and the increased availability
of convenient packaging for natural spring water have contributed to the
increase in bottled water consumption.

Distribution Channels. Non-sparkling bottled water is generally sold
to end users through four channels. According to Beverage Marketing, the total
share of the bottled water market for each channel is as follows: (i)
off-premise retail, which consists of supermarket, convenience store and drug
store chains and other similar retail outlets (44.9%); (ii) home and office
delivery which primarily consists of 5 gallon containers (39.0%); (iii)
on-premise retail, which includes restaurants, delicatessens and other similar
sites (8.3%); and (iv) vending (7.8%).

Non-sparkling bottled water is generally delivered to customer
locations through direct-store-delivery ("DSD") or warehouse distribution
systems. DSD involves delivery of the product directly to the store's location
where consumers may purchase the product. Warehouse distribution systems involve
the delivery of truckloads of palletized products to the warehouses of regional
customers which, in turn, deliver the product directly to the customer's retail
sales locations.

Private Label. Private label products have become increasingly popular
among retailers and other customers. For example, supermarket sales of private
label products grew 8.5% in 1996 versus 1.4% growth among branded products,
according to IRI. Retailers benefit from having a range of private label and
branded products as well as from the customer affinity developed from the
reinforcement of the retailer's own brand. Other non-retailing customers find it
more efficient to source products from a private label manufacturer than to
produce the products themselves. Both types of customers often choose private
label bottled water producers on the basis of price, consistent product quality,
packaging capability, distribution capability and customer service.

Consolidation. The trend toward consolidation in the bottled water
industry is evidenced by the reduction in the number of bottled water filling
locations and the corresponding increase in volume produced at most locations
over the past ten years. According to Beverage Marketing, in 1996 there were
approximately 350 filling locations in the United States versus approximately
425 in 1986, a decrease of 17.6%. The number of filling locations with sales
over $75 million doubled to eight from 1995 to 1996. Larger companies are
seeking to expand their share within a market, obtain broader distribution and
achieve economies of scale with larger volume production.

Products

Five Gallon Home and Office Delivery. Although the focus of the
Company's business will be the production and distribution of oxygen enriched
water, the Company has an active 5 gallon home and office delivery business. The
Company delivers spring, purified drinking and distilled waters to Pinellas
County businesses and homeowners. The Company owns state-of-the art water
coolers, which it rents to its 5 gallon customers. The Company began its 5
gallon distribution business in April, 1997. The Company is considering whether
to sell or retain this business.

Oxygen Enriched Bottled Water. The Company's primary focus will be the
production/distribution of oxygen enriched bottled water in small package, PET,
containers ranging in size from .5 liter to 1.5 liters. The points of purchase
will include grocery stores, convenience stores, gas station markets, health
spas and vitamin/health food stores.

The Company's oxygen enriched bottled water will be made by combining
super purified water and oxygen. Through water purification processing the
source water will be reduced to 1-2 parts per million of total dissolved solids
and then oxygen will be introduced through a unique, proprietary process. As a
point of reference, the Food and Drug Administration's (FDA) definition of
distilled water is 5 parts per million or less of total dissolved solids. As
such, the base water will be of distilled quality, although the distillation
process will not be used.

<PAGE>

The Company's market research, undertaken by a non-affiliated research
firm, has indicated that no specific medical claims have to be made to consumers
with regard to its product. According to this market research the public will
readily accept the necessity and benefits of both highly purified water and
oxygen.

There are no significant competitors producing oxygen enriched bottled
water. The Company knows of two other entities that are attempting to produce
and distribute oxygen enriched bottled water. None of the well-established
traditional bottled water distributors has an oxygen enriched bottled water
product.

The Company's oxygen enriched water will contain approximately 40
parts per million of oxygen. Normal water contains approximately 7 parts per
million of oxygen. As such, the Company's oxygen enriched bottled water will
contain approximately 500 - 600% more oxygen. Oxygen is literally the breath of
life; oxygen is a natural energizer and body purifier. Oxygen is odorless and
tasteless, as well as non-carbonated. As such, the Company's water tastes like a
fine premium bottled water - light and crisp. Oxygen does not produce the
unhealthy "jolt" associated with caffeine products. Rather, it is believed to
create a feeling of physical well-being and mental clarity. There can be no
assurance, however, that the Company's products will achieve consumer
acceptance. Consumer preferences are inherently subjective and subject to
change.

Oxygen is currently in the public view as an "additive" to a range of
consumer products. There are currently oxygen bars in Toronto, New York City and
the Los Angeles area. Oxygen in beverages has received recent widespread media
coverage through television, radio and print media.

Initially, the Company will not carbonate or flavor its water. After
the introductions of Company's oxygen enriched bottled water product, the
introduction of a new product with natural flavoring or carbonation will be
considered. Likewise, the Company will consider the infusion of beneficial
herbs. The Company will also consider the production of super oxygen enriched
sports drinks, providing even higher levels of oxygen, to be marketed at a
higher price. The Company will utilize a distinctive bottle and label for its
water products.

Strategy

The Company's objective is to build a product enriched water in
Florida, concentrating on the Tampa area, and then expand nationally. Aspects of
the Company's strategy include the following.

The Company intends to enter into joint ventures with 2-4 distribution
partners. No joint ventures have been entered into as of the date of this
prospectus. The Company will work very hard to develop and stabilize these
relationships in order to ensure their success. Thereafter, the Company will use
these successful third party distributors, as well as its own
production/distribution facility, as operational models. The Company then
intends to expand into multiple markets.

The Company's oxygen enriched small packaged bottled water product
will primarily be sold through retail outlets, including convenience stores, gas
station markets, grocery stores, health food stores, and health spas. However,
secondary distribution will be effected through vending and private labeling.
Neither vending nor private labeling have the attendant costs of direct
retailing, while they do have the benefit of increasing the production volume
and thereby increasing the production margins.

Although the Company will distribute its own product in certain areas,
primarily the Company will sell to qualified third party distributors. These
third party distributors will have the right to distribute to retail outlets in
defined geographic areas. A large number of potential distributors have already
contacted the Company regarding potential distribution of its oxygen enriched
bottled water. The Company is discussing distribution possibilities at this time
but has no contracts for distribution.

Production

The three components of production are the building, the water
processing and bottling equipment, and the labor force.

<PAGE>

Building. The Company currently owns a 10,800 sq. foot building
located on 2.1 acres in Clearwater. The Company has already obtained the
necessary permitting and exemptions to remodel and use its building as a
bottling and distribution facility. The demolition and asbestos abatement have
been completed. Architectural renderings are completed and paid for.Major
Building Company, a regional building contractor, has been hired to remodel
the Company's bottling facility.

Equipment. The Company has investigated and inspected various
equipment to comprise various sized plants. The equipment can be divided into
two general categories - water processing and bottling. The water processing
equipment will not vary significantly from plant to plant, while the bottling
equipment will vary depending on the size of the plant to be constructed. A
medium size plant is capable of producing 1,920 cases per 8 hour shift, while
running at 80% capacity. The Company is under contract for delivery of all of
the equipment.

Water processing and bottling equipment for a medium size plant costs
approximately $750,000. These costs include shipping, installation and initial
technical training. The equipment has been ordered, and is scheduled to be
received and installed at the end of February, 1998.

Labor Force

The larger and faster the bottling line, the less manpower is required
due to increased automation. In general, the bottling facility will require four
employees per shift.

Water Sources

Under FDA guidelines, bottled water must contain fewer than 500 parts
per million ("ppm") in total dissolved solids. Varying amounts of solids provide
different tastes to water. The Company uses FDA and International Bottled Water
Association approved water sources.

Upon delivery to the Company's facilities, water is filtered through 0.2
micron filters and then ozonated during storage in stainless steel storage
tanks. Ozone is an unbalanced form of oxygen which, unlike regular oxygen, kills
bacteria and micro-organisms 3,000 times faster than chlorine. Unlike chlorine,
ozone naturally breaks down to simple oxygen in a few hours and leaves no traces
or residues. At the Clearwater facility, the source water runs through a number
of filtration, ion exchange, and reverse osmosis processes by which it is
reduced to a very pure 1-2 parts per million of total dissolved solids. Water is
oxygenated by first removing dissolved gasses from the water following which
medical grade oxygen is infused through a proprietary process. The water is then
piped to the clean room bottling area where the various products are filled and
capped. The residual ozone in the bottled products sanitizes the containers as
well as the water, making certain the water is pure. The clean room is filled
and pressurized with air from two high-volume HEPA (High-Efficiency Particulate
Air) air handlers that filter 99.97% of particulates out of the air.

The manufacturing process is designed to be highly automated. Bottles are
mechanically de-palletized, cleaned, rinsed, filled and capped. The bottles are
automatically labeled, tamper banded, assembled and packed in cases. After
palletizing and stretch wrapping, the product is either loaded directly onto a
truck for immediate shipment or is stored in a warehouse for future shipment.
Most products are shipped within 48 to 72 hours after production via outside
carriers.

The Company will maintain exacting internal quality control standards.
Each batch of water will be tested according to FDA and International Bottled
Water Association standards.

The Company will seek to have its products certified by the National
Sanitation Foundation (the "NSF"), an independent agency serving industry,
government and consumers in areas relating to public health and the environment.
The NSF conducts annual unannounced inspections and extensive product and raw
material testing.

Competition

<PAGE>

The bottled water industry is highly competitive. According to Beverage
Marketing, there are approximately 350 bottled water filling locations in the
United States with sales increasingly concentrated among the larger firms.
According to Beverage Marketing, the ten largest bottled water companies
accounted for approximately 58.4% of wholesale dollar sales in 1996. Nearly all
of the Company's competitors are more experienced, have greater financial and
management resources and have more established proprietary trademarks and
distribution networks than the Company. On a national basis, the Company
competes with bottled water companies such as The Perrier Group of America, Inc.
(which includes Arrowhead Mountain Spring Water, Poland Spring, Ozarka Spring
Water, Zephyrhills Natural Spring Water, Deer Park, Great Bear and Ice Mountain)
and Great Brands of Europe (which includes Evian Natural Spring Water and Dannon
Natural Spring Water). The Company also competes with numerous regional bottled
water companies located in the United States and Canada. AquaPenn has chosen to
compete by focusing on innovative packaging, customer service and pricing.

Trademarks

The Company has registrations in the U.S. Patent and Trademark Office for
the trademarks that it uses, including Aqua Clara. The Company believes that its
common law and registered trademarks have significant value and goodwill and
that some of these trademarks are instrumental in its ability to create demand
for and market its products. There can be no assurance that the Company's common
law or registered trademarks do not or will not violate the proprietary rights
of others, that they would be upheld if challenged or that the Company would, in
such an event, not be prevented from using the trademarks, any of which could
have an adverse effect on the Company.

Regulation

The Company's operations are subject to numerous federal, state and local
laws and regulations relating to its bottling operations, including the
identity, quality, packaging and labeling of its bottled water. The Company's
bottled water must satisfy FDA standards, which may be periodically revised, for
chemical and biological purity. The Company's bottling operations must meet FDA
"good manufacturing practices," and the labels affixed to the Company's products
are subject to FDA restrictions on health and nutritional claims. In addition,
bottled water must originate from an "approved source" in accordance with
federal and state standards.

State health and environmental agencies, such as the Florida Department
of Agriculture and consumer services, also regulate water quality and the
manufacturing practices of producers.

The Company's products will satisfy all applicable state and federal
requirements and therefore will be permitted to sell its bottled water in all 50
states. These laws and regulations are subject to change, however, and there can
be no assurance that additional or more stringent requirements will not be
imposed on the Company's operations in the future. Although the Company believes
that its water supply, products and bottling facilities are and will be in
substantial compliance with all applicable governmental regulations, failure to
comply with such laws and regulations could have a material adverse effect on
the Company.

Legal Proceedings

The Company is not a party to any material legal proceedings, except as
set forth below. On November 5, 1997 Life International Products, Inc., a
competitor of the Company, filed a complaint in the Circuit Court of Collier
County Florida against the Company and Corporate Relations Group alleging false
and unfair competition under the Lanham Act, false and misleading advertising
under Florida law, common law unfair competition and injunctive relief. In
summary, the complaint alleges that the Company has made claims about its
current and future business plans. The Company believes that the lawsuit is
wholly without merit, and is procedurally defective in that the plaintiffs lack
standing to file suit, among other defects. The Company has not answered the
complaint. Rather, the Company's attorneys have filed a motion to dismiss and
are awaiting the court's ruling.

Employees

<PAGE>

The Company currently employs approximately 11 full-time employees, none
of whom are covered by collective bargaining agreements. During peak production
periods, the Company supplements its full-time work force with part-time
employees. The Company believes that its relations with its employees are good.

MANAGEMENT

The following table sets forth certain information with respect to the
executive officers and directors of the Company. Each director holds such
position until the next annual meeting of the Company's shareholders and until
his respective successor has been elected and qualifies. Any of the Company's
officers may be removed with or without cause at any time by the Company's Board
of Directors.

Directors and Executive Officers

The members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. The following are the
directors and executive officers of the Company.

John S. McAvoy, 48, has served as President and CEO of the Company since
its inception in August 1995 and
has been an integral part of the development of this project. Mr. McAvoy had
been a practicing attorney for 20
years. Mr. McAvoy formerly ran a 2,000 acre farm in California which employed
25 to 150 employees, depending
on the season. Mr. McAvoy is a former owner of Property Management, Inc. in San
Francisco, which was
responsible for the operation and maintenance of a ten-story San Francisco
office building.

John C. (Jack) Plunkett, 49, has been a Director and the Vice
President/Chief Operating Officer and Secretary
of the Company since November 1, 1996. Mr. Plunkett is a graduate of the U. S.
Naval Academy where he received
a degree in naval engineering in 1970. Since 1984 Mr. Plunkett has served as a
consulting engineer with Science
Applications International Corporation, a two-billion dollar per year employee-
owned consulting firm in the defense,
space, energy, medical and transportation fields. Mr. Plunkett was responsible
for business development and project
management of multi-million dollar contracts. Additionally, Mr. Plunkett is the
principal in Sea Trails Shoppes, Inc.,
a commercial real estate development consisting of retail, office and restaurant
space and since 1995 has served as
President and Managing Partner of this entity.

Rand L. Gray, 50, has been Chief Financial Officer since July 1997. Mr.
Gray is a graduate of Western Michigan University and attended Notre Dame
University Graduate School. Mr. Gray served as Chief Financial Officer/Senior
Vice President with Felicione International, a wholesale fish distributor, from
1990 to 1996, and was Executive Vice President/Chief Financial Officer with
Behstev Inc., International, a modified asphalt manufacturer and distributor,
from 1985 to 1989. From 1979 to 1985 he was a Divisional Vice
President/Controller for Diamond International (Fortune 500), a printed products
manufacturer and distributor; and Litton Industries (Fortune 400), a printed
products manufacturer and distributor and as Vice President of Finance/CFO for
D.H.C., Inc., a manufacturer and distributor of modular homes. Mr. Gray has been
an accountant and business manager for over twenty-five years.

Robert Guthrie, 74, has served as Director of the Company since May,
1997. Mr. Guthrie is an attorney
licensed to practice in Florida with affairs in Seminole, Florida. Mr. Guthrie
also serves as a Director of the Rivellas Community Bank.

The Company also retains consultants with experience in the bottled water
industry experience on the issues of processing and bottling.

The Company has entered into one-year employment agreements with each of
Messrs. McAvoy, Plunkett and Gray,as amended, providing for salaries
of $77,000 each. Mr. McAvoy and Mr. Plunkett have orally agreed and Mr. Gray has
agreed in his written employment contracts to defer $25,000 of such compensation
until such time as the Company's cash flow permits. The agreements provide in
the case of Messrs. Plunkett and Gray for the issuance of, respectively, 100,000
and 50,000 shares of common stock each year for five years for each year of
service, up to 500,000 and 250,000 shares, respectively. The Company also agreed
to grant stock options to Mr.
Plunkett and Mr. Gray equivalent to those granted to Mr. McAvoy.

<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth information relating to the beneficial
ownership of Company Common Stock as of the date of this Prospectus by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock (ii) each of the Company's directors and
executive officers, and (iii) all of the Company's directors and executive
officers as a group. The Percentage After Offering assumes the conversion of all
shares of Series A Preferred into 1,333,334 shares of common stock.
<TABLE>
<CAPTION>

Percentage Percentage
Name and Address(1) Common Stock Before Offering After Offering

<S> <C> <C> <C>
John S. McAvoy 1,837,900 32.9% 25.7%
10720 72nd Street North
Largo, Florida 33777
John C. Plunkett(2) 580,000 9.5% 7.6%
10720 72nd Street North
Largo, Florida 33777
Rand L. Gray(3) 250,000 4.3% 3.4%
10720 72nd Street North
Largo, Florida 33777

Robert Guthrie 25,000 .4% .3%
Corporate Relations Group, Inc.(4) 350,000 6.0% 4.9%
1801 Lee Road, Suite 301
Winter Park, Florida 32709

All Directors and Executive 2,692,900 42.5% 34.0%
Officers as a Group (4 persons)
</TABLE>

(1) Unless otherwise noted below, the Company believes that all persons
named in the table have sole voting and investment power with respect
to all shares of Common Stock beneficially owned by them. For purposes
hereof, a person is deemed to be the beneficial owner of securities
that can be acquired by such person within 60 days from the date hereof
upon the exercise of warrants or options or the conversion of
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that any such warrants, options or convertible
securities that are held by such person (but not those held by any
other person) and which are exercisable within 60 days from the date
hereof, have been exercised.
(2) Includes 500,000 shares issuable to Mr. Plunkett upon satisfactory
completion of this employment agreement
over 5 years vesting at the rate of 20% of the shares each year. See
"Management."
(3) Includes 250,000 shares issuable to Mr. Gray upon satisfactory
completion of this employment agreement
over 5 years vesting at the rate of 20% of the shares each year. See
"Management."
(4) Includes options to purchase 250,000 shares. See Note 4 to the table
under the caption "Selling
Shareholders."

CERTAIN TRANSACTIONS

Mr. McAvoy founded Pocotopaug Investment, Inc. ("Pocotopaug") as a
Florida Corporation in August 1995.
(Pocotopaug means "Clearwater" in a local indian dialect). Pocotopaug was
capitalized in 1996 by $323,500 in
bridge loans.

Aqua Clara Bottling and Distribution, Inc., was incorporated on July
29, 1996 in the State of Colorado and issued 835,000 shares of common stock and
27,500 shares of preferred stock to various investors for total consideration of
$3,167.50. The preferred stock has since been retired. The offering was made
under Rule 504 as an offering exempt from registration under the Securities Act
of 1933.

<PAGE>

On November 1, 1996, the directors and officers of Aqua Clara resigned
and were replaced by Messrs. McAvoy and Plunkett. On November 23, 1996, Aqua
Clara issued 1,645,250 shares of common stock to Mr. McAvoy in exchange for all
of the outstanding shares of Pocotopaug and issued 44,872 shares to Danny L.
Wey. Unless otherwise noted, all references to the Company in this Prospectus
include the consolidated entity of Aqua Clara and Pocotopaug.

On March, 1997, the Pocotopaug bridge investors exchanged their
$323,500 in convertible debt into 796,500 shares of Company common stock under
Rule 504. On March 1997, the Company issued 259,500 shares to persons for
services rendered valued at $25,950. From December 27, 1996 to March 1997, the
Company issued 1,283,000 shares of common stock in an offering under Rule 504
for $.50 per share.

In December, 1997, the Company issued 20,000 restricted shares of
common stock to Olympus Capital for consulting services rendered prior to
September 30, 1997. In December, 1997, the Company issued 75,000 restricted
shares of common stock to Olympus Capital for consulting services rendered
pursuant to a one-year consulting contract dated October 30, 1997.

In December, 1997, the Company issued 200,000 shares of restricted
common stock to each of Gulf Atlantic Publishing and Arrow Marketing for
advertising services and creative design of marketing materials respectively.

Gulf Atlantic Publishing and Arrow Marketing purchased these 400,000
shares of $.25 per share pursuant to a September, 1997 option agreement.

On November 17, 1997 the Company entered into a Lead
Generation/Corporate Relations Agreement with Corporate Relations Group "CRG"
pursuant to which the Company has paid CRG $400,000 and by which the Company has
agreed to pay CRG an additional $400,000 upon the Company raising its next
tranche of $2,500,000. Additionally, the Company agreed to issue options to
purchase 250,000 shares of common stock under the following terms:
<TABLE>
<CAPTION>

Number of Shares Exercise Price Expiration Date

<S> <C> <C>
50,000 $ 3.50 11/17/98
50,000 4.20 11/17/99
50,000 4.70 11/17/00
50,000 5.60 11/17/01
50,000 7.00 11/17/02

</TABLE>

The Company agreed to issue 100,000 restricted shares to CRG, such
shares to be returned should the Company file and cause to be effective a
registration statement for the shares underlying the options within 120 days of
the date of the agreement. CRG was also granted piggyback rights for these
shares which have been escrowed with the Company's legal counsel.

Mr. John McAvoy has loaned the Company amounts for working capital. The
loans are represented by promissory notes due on demand and bearing interest of
6%. None of the loans have been repaid. The total owed is $15,000 with $1,500
loaned on March 15, 1996, $9,000 loaned on April 17,1996, $4,000 loaned on July
19, 1996, and $500 loaned without a formal promissory note.

<PAGE>

SELLING SHAREHOLDERS

The shares of Common Stock of the Company offered by the Selling
Shareholders (the "Shares") will be offered at market prices, as reflected on
the Electronic Bulletin Board, or on the Nasdaq Small Cap Market if the Common
Stock is then traded on Nasdaq. The shares include 195,000 shares currently
outstanding as well as shares being offered by the holders upon conversion of
the Series A Preferred and 250,000 shares issuable upon exercise of options. The
aggregate number of shares offered for resale upon conversion of the Series A
Preferred will be based on the conversion rate in effect at the time of
conversion. It is anticipated that registered broker-dealers will be allowed the
commissions which are usual and customary in open market transactions.

The number of shares of Common Stock issuable upon conversion of each
of the 2,500 shares of Series A Preferred, and the consequent number of shares
of Common Stock available for resale under this Prospectus, is based upon a
conversion ratio which is $1,000 divided by the lower of (a) 65% of the closing
bid price of the Common Stock on NASDAQ averaged over the five trading days
immediately prior to the date of conversion, or (b) $1.875. Based upon an
assumed conversion price of $1.875 per share, 533.33 shares of Common Stock
would be issuable per share of Series A Preferred. Except as noted, the Selling
Shareholders do not own any Common Stock except as registered hereby and will
own no shares after the completion of the offering. The relationship, if any,
between the Company and any Selling Stockholder is set forth below.
<TABLE>
<CAPTION>

Number of Number of
Shares of Common Shares Percent
Series A Beneficially Before
Shareholder Preferred Owned Offering
<S> <C> <C> <C>
Olympus Capital, Inc.(1) 200 201,667 3.5%
Barry Seidman 500 266,667 4.6%
Arnold Zousmer 500 266,667 4.6%
James W. Spratt II(1) 25 13,333 *
Hassan Abdul SA(2) 250 133,333 2.4%
C.A. Opportunidad SA(2) 250 133,333 2.4%
Joseph Sloves 25 13,333 *
Philip Holstein, Jr.(3) 20 10,667 *
Castle Creek Valley Ranch
Defined Benefit Pension Plan(3) 20 10,667 *
Peak Financial, Inc. 30 16,000 *
Lee & Rick's Oyster Bar #2, Inc. 50 26,667 *
Bruce R. Knox 75 40,000 *
Frederic A. Lenz 75 40,000 *
Tom Richardson 15 8,000 *
Charles Kerr 15 8,000 *
Passy Holding 150 80,000 *
James Skalko 200 106,667 1.4%
Ed Leinster 100 53,333 1.0%
Corporate Relations Group, Inc.(4) 0 350,000 6.1%
TOTAL 2,500 1,778,334 24.4%
</TABLE>

(1) The controlling shareholder of Olympus Capital, Inc. is James W. Spratt
III, the son of James W. Spratt II.
Includes 95,000 shares of Common Stock already held by Olympus Capital,
Inc.
(2) Jose Antonio Gomez is the principal shareholder of Hassan Abdul SA and
C.A. Opportunidad, S.A.
(3) Mr. Holstein is the trustee of the Castle Creek Valley Ranch Defined
Benefit Pension Plan.
(4) Messrs. Joe H. Landis and Paul Serluco are the officers of Corporate
Relations Group, Inc. Includes 100,000
shares held in escrow (see "Certain Transactions") and options to
purchase 250,000 shares.

<PAGE>

DESCRIPTION OF SECURITIES

Common Stock

The Company's Articles of Incorporation authorizes the issuance of
50,000,000 shares of Common Stock, no par value per share, of which 5,579,122
shares were outstanding as of the date of this Prospectus, including 100,000
shares held in escrow. See "Certain Transactions." Holders of shares of Common
Stock are entitled to one vote for each share on all matters to be voted on by
the stockholders. Holders of Common Stock have no cumulative voting rights.
Holders of shares of Common Stock are entitled to share ratably in dividends, if
any, as may be declared, from time to time by the Board of Directors in its
discretion, from funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, the holders of shares of
Common Stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities and the liquidation preference to holders of Series A
Preferred Stock. Holders of Common Stock have no preemptive rights to purchase
the Company's common stock. There are no conversion rights or redemption or
sinking fund provisions with respect to the common stock. All of the outstanding
shares of Common Stock are, and the shares of Common Stock will be, when issued
and delivered, fully paid and non-assessable issuable upon conversion of the
Preferred Stock.

Preferred Stock

The Company's Articles of Incorporation authorize the issuance of
5,000,000 shares of preferred stock, no par value, of which 2,500 shares of
Series A Preferred Stock will be outstanding. The Series A Preferred Stock is
convertible, at the option of the holder, into shares of common stock at an
initial Conversion Rate, subject to adjustments, at a number of shares of Common
Stock equal to $1,000 divided by the lower of (i) Sixty-Five Percent (65%) of
the average Market Price of the Common Stock for the five trading days
immediately prior to the Conversion Date (defined below) or (ii) $1.875,
increased proportionally for any reverse stock split and decreased
proportionally for any forward stock split or stock dividend. Market Price for
any date shall be the closing bid price of the Common Stock on such date, as
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), or the closing bid price in the over-the-counter market if
other than Nasdaq. The holders of Series A Preferred have no voting rights, and
have a liquidation preference of $1,300 per share over the Common Stock.
Dividends on the Series A Preferred are payable at the rate of 8% per annum ($80
per share of Series A Preferred Stock) payable on each July 1, in either cash,
or in the option of the Company, Common Stock valued at the Conversion Rate. The
Company's Board of Directors has authority, without action by the shareholders,
to issue all or any portion of the authorized but unissued preferred stock in
one or more series and to determine the voting rights, preferences as to
dividends and liquidation, conversion rights, and other rights of such series.

The Company considers it desirable to have preferred stock available
to provide increased flexibility in structuring possible future acquisitions and
financings and in meeting corporate needs which may arise. If opportunities
arise that would make desirable the issuance of preferred stock through either
public offering or private placements, the provisions for preferred stock in the
Company's Articles of Incorporation would avoid the possible delay and expense
of a shareholder's meeting, except as may be required by law or regulatory
authorities. Issuance of the preferred stock could result, however, in a series
of securities outstanding that will have certain preferences with respect to
dividends and liquidation over the Common Stock which would result in dilution
of the income per share and net book value of the Common Stock. Issuance of
additional Common Stock pursuant to any conversion right which may be attached
to the terms of any series of preferred stock may also result in dilution of the
net income per share and the net book value of the Common Stock. The specific
terms of any series of preferred stock will depend primarily on market
conditions, terms of a proposed acquisition or financing, and other factors
existing at the time of issuance. Therefore, it is not possible at this time to
determine in what respect a particular series of preferred stock will be
superior to the Company's Common Stock or any other series of preferred stock
which the Company may issue. The Board of Directors may issue additional
preferred stock in future financings.

The issuance of Preferred Stock could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company.

The Company intends to furnish holders of its common stock annual
reports containing audited financial statements and to make public quarterly
reports containing unaudited financial information.

<PAGE>

Transfer Agent

The transfer agent for the Common Stock is Jersey Transfer and Trust
Company, 201 Bloomfield Avenue, Verona, New Jersey 07044 and its telephone
number is (973) 239-2712.

LEGAL MATTERS

The legality of the Shares offered hereby will be passed upon for the
Company by Hand & Hand, a law corporation, Dana Point, California.

EXPERTS

The audited financial statements included in this Prospectus as of and
for the years ended March 31, 1997 and the period Inception (August 17, 1995) to
March 31, 1996 have been audited by Pender Newkirk & Company, independent
certified public accountants, to the extent and for the periods set forth in
their report thereon and are included in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.

<PAGE>
Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

Contents

Independent Auditors' Report on Consolidated Financial Statements F-2

Consolidated Financial Statements:

Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Changes in Stockholders' Equity F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7 to F-13

<PAGE>

Independent Auditors' Report

Board of Directors
Aqua Clara Bottling & Distribution, Inc.
and Subsidiary (A Development Stage Enterprise)
Largo, Florida

We have audited the accompanying consolidated balance sheet of Aqua Clara
Bottling & Distribution, Inc. and Subsidiary (a development stage enterprise) as
of March 31, 1997 and the related consolidated statements of operations, changes
in stockholders' equity, and cash flows for the year then ended and for the
periods August 17, 1995 (date of inception) through March 31, 1996 and 1997.
These consolidated financial statements are the responsibility of the management
of Aqua Clara Bottling & Distribution, Inc. and Subsidiary. Our responsibility
is to express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Aqua Clara Bottling
& Distribution, Inc. and Subsidiary as of March 31, 1997 and the results of its
operations and its cash flows for the year then ended and for the periods August
17, 1995 (date of inception) through March 31, 1996 and 1997 in conformity with
generally accepted accounting principles.

Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
January 9, 1998

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Consolidated Balance Sheets

March 31, December 31,
1997 1997
Assets (Unaudited)
Current assets:
<S> <C> <C>
Cash $ 391,281 $ 1,253,633
Accounts receivable, trade 47,024
Investment securities 1,000
Inventory 3,684
Prepaid assets 1,091 413,888
Total current assets $ 393,372 $ 1,718,229

Property, plant, and equipment, net of accumulated
depreciation 460,227 749,845
Other assets:
Organizational costs, net of accumulated amortization 37,356 25,596
Deposits and other assets 35,760 334,493
Total other assets 73,116 360,089
$ 926,715 $ 2,828,163

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable, trade $ 11,667 $ 47,232
Accrued expenses 903 21,076
Customer deposits 17,016
Note payable and current maturities of long-term debt 26,342 177,372
Total current liabilities 38,912 262,696

Long-term debt, less current maturities 277,433 360,244

Stockholders' equity:
Preferred stock; no par value; 5,000,000 shares
authorized; 2,500 shares issued and outstanding 2,112,488
Common stock; no par value; 50,000,000 shares
authorized; 4,884,122 and 5,579,122 shares issued
and outstanding at March 31, 1997 and December 31,
1997, respectively 918,616 1,948,616
Deficit accumulated during development stage (258,246) (1,549,631)
Subscription receivable (50,000) (306,250)

Total stockholders' equity 610,370 2,205,223

$ 926,715 $ 2,828,163

</TABLE>

Read independent auditors' report. The accompanying
notes are an integral part of the consolidated
financial statements.

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Consolidated Statements of Operations

Period
August 17, 1995 From Inception
(Date of Inception) Nine Months Ended (August
17, 1995)
Year Ended Through December 31, to
March 31, 1997 March 31, 1996 1997 1996 December 31, 1997

(unaudited) (unaudited) (unaudited)

<S> <C> <C> <C> <C>
Sales $ $ $ 120,367 $ 120,367

Costs and expenses:
Cost of sales 122,092 122,092

General, administrative, and sales expenses $ 127,185 $ 71,645 $ 1,257,794 $ 110,008 $ 1,456,624

Interest expense 50,542 8,874 31,866 23,752 91,282
177,727 80,519 1,411,752 133,760 1,669,998

Net loss $ 177,727 $ 80,519 1,291,385 133,760 1,549,631

Net loss per share $ .06 $ .03 $ .25 $ .05 $ .44

Weighted average common shares outstanding 2,787,931 2,525,122 5,201,304 2,556,515 3,485,717

</TABLE>

Read independent auditors' report. The accompanying
notes are an integral part of the consolidated
financial statements.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Consolidated Statements of Stockholders' Equity

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

Deficit
Accumulated
Additional During
Common Stock Preferred Stock Paid-In Development Subscription
Shares Amount Shares Amount Capital Stage Receivable

Issuance of common stock,
<S> <C> <C> <C> <C> <C> <C>
August 1995 500,000 $ 5,000 $ $ 15,250 $ $

Issuance of common stock
for services,
August 1995 500,000 5,000 15,250

Net loss for period (80,519)

Balance,
March 31, 1996 1,000,000 10,000 30,500 (80,519)

Adjustment for
recapitalization,
December 1996 1,525,122 33,668 (30,500)

Issuance of common
stock for services,
December 1996 279,500 25,950

Common stock issued for
conversion of notes
payable, March 1997 796,500 323,500

Common stock issued through
Regulation D offering,
March 1997 1,283,000 525,498 (50,000)

Net loss for period (177,727)

Balance,
March 31, 1997 4,884,122 918,616 0 (258,246) (50,000)

Collection of subscription
receivable, April 1997
(unaudited) 50,000

Issuance of common stock for
previous and future services
and $100,000 (unaudited) 620,000 1,030,000 2,500 $ 2,112,488 (306,250)

Stock issued through Regulation
D offering, December 1997
(unaudited) 75,000

Net loss for period
(unaudited) (1,291,385)

Balance,
December 31, 1997
(unaudited) 5,579,122 $ 1,948,616 2,500 $ 2,112,488 $ 0 $ (1,549,631) $ (306,250)

</TABLE>

Read independent auditors' report. The
accompanying notes are an integral part of
the consolidated financial statements.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Consolidated Statements of Cash Flows
Period
August 17, 1995 From Inception
(Date of Inception) Nine Months Ended (August 17, 1995)
Year Ended Through December 31, to
March 31, 1997 March 31, 1996 1997 1996 December 31, 1997

Operating Activities (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Net loss $ (177,727) $ (80,519) $ (1,291,385)$ (133,760) $ (1,549,631)
--------- -------- ----------- --------- -----------
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on investment 1,000 1,000
Depreciation and amortization 58,340 58,340
Issuance of common stock for services 25,950 20,250 623,750 25,950 669,950
Incurrence of debt for compensation 60,517 60,517
Effect of pooling 3,518 3,518 3,518
(Increase) decrease in:
Accounts receivable (47,024) (47,024)
Prepaid assets (1,091) (412,797) (413,888)
Inventory (3,684) (3,684)
Increase (decrease) in:
Accounts payable 4,917 42,315 41,525 47,232
Accrued expenses (5,467) 6,370 20,173 21,158 21,076

Total adjustments 27,827 26,620 342,590 92,151 397,037

Net cash used in operating activities (149,900) (53,899) (948,795) (41,609) (1,152,594)

Investing activities
Deferred offering costs (20,000)
Purchase of investments (51,004) (51,004)
Proceeds from sale of investment 50,004 5,004 50,004
Purchase of property, plant and equipment (43,978) (109,499) (185,654) (30,041) (339,131)
Increase in other assets (65,977) (7,139) (298,733) (41,657) (371,849)

Net cash used for investing activities (59,951) (167,642) (484,387) (86,694) (711,980)

Financing activities
Proceeds from customer deposits 17,016 17,016
Proceeds from notes payable to stockholder and
incurrence of convertible debt 136,000 202,500 328,757 136,000 667,257
Payments of long-term debt and obligations
under capital lease (10,396) (829) (312,727) (7,726) (323,952)
Net proceeds from issuance of stock 475,148 20,250 2,262,488 2,757,886

Net cash provided by financing activities 600,752 221,921 2,295,534 128,274 3,118,207

Net increase (decrease) in cash 390,901 380 862,352 (29) 1,253,633

Cash, beginning of period 380 0 391,281 380 0

Cash, end of period $ 391,281 $ 380 $ 1,253,633 $ 351 $ 1,253,633

Supplemental disclosures of cash flow information
and noncash investing and financing activities

Cash paid for interest $ 56,010 $ 3,407 $ 26,866 $ 2,247 $ 86,283

</TABLE>

During the year ended March 31, 1997, $323,500 of convertible debt was
converted to 796,500 shares of common stock.

During the period ended March 31, 1996, the Company entered into a purchase
money mortgage of $300,000 in connection with the acquisition of property,
plant, and equipment.

The Company owed $6,750, $26,816, and $20,687 on property, plant, and
equipment as of March 31, 1997, March 31, 1996, and December 31, 1996,
respectively.

During the year ended March 31, 1997, 100,000 shares of common stock were
issued for a $50,000 subscription receivable. During the period ended
December 31, 1997, $306,250 of common stock was issued in exchange for
services to be performed.

During the period ended December 31, 1997, the Company incurred a capital
lease obligation of $49,731 and debt of $107,563 when the Company acquired
new equipment.

Read independent auditors' report. The
accompanying notes are an integral part of
the consolidated financial statements.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

1. Organization and Background

On August 17, 1995, Pocotopaug Investment, Inc. (hereinafter referred to as
"Pocotopaug") was incorporated under the laws of Florida
for the purpose of raising capital to fund the development of products for
subsequent entry into the bottled water industry. Pocotopaug
has been in the development stage since its formation.

On July 29, 1996, Aqua Clara Bottling & Distribution, Inc. (hereinafter referred
to as "Aqua Clara") was incorporated under the laws of Colorado for the purpose
of raising capital to fund the development of products for subsequent entry into
the bottled water industry. Aqua Clara has been in the development stage since
its formation and was virtually inactive until the time of its combination with
Pocotopaug, as described below.

In December 1996, the stockholders of Pocotopaug gained control of Aqua Clara
and Aqua Clara acquired Pocotopaug in a business combination accounted for as a
reorganization of Pocotopaug. Pocotopaug became a wholly owned subsidiary of
Aqua Clara through the exchange of 1,690,122 shares of Aqua Clara's common stock
for all 1,000,000 shares of the outstanding stock of Pocotopaug. Upon the
execution of this transaction, Aqua Clara had 2,525,122 shares outstanding. The
accompanying consolidated financial statements have been based on the assumption
that the companies were combined for all periods presented.

2. Significant Accounting Policies

The significant accounting policies followed are:

The consolidated financial statements include the accounts of Aqua
Clara Bottling & Distribution, Inc. and its wholly owned subsidiary, Pocotopaug
Investments, Inc. All significant intercompany accounts and transactions have
been eliminated.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The Company maintains cash balances in excess of the $100,000 insured
by the Federal Deposit Insurance Corporation.

Inventory is stated at the lower of cost (first-in, first-out) or
market.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

2. Significant Accounting Policies (continued)

Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the consolidated
financial statements carrying amounts of existing assets and liabilities and
their respective income tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized as income in the period that included the enactment date.

Organizational costs are amortized over a period of 60 months.

Shares of common stock issued for other than cash have been assigned
amounts equivalent to the estimated fair value of the service received until the
time the Company's stock began trading. At that time, the Company valued the
transactions based on quoted prices. The Company records shares as outstanding
at the time the Company becomes contractually obligated to issue shares.

Property, plant, and equipment are recorded at cost. Depreciation is
calculated by the declining-balance and straight-line methods over the estimated
useful lives of the assets. Maintenance and repairs are charged to operations
when incurred. Betterments and renewals are capitalized. When property, plant,
and equipment are sold or otherwise disposed of, the asset account and related
accumulated depreciation account are relieved and any gain or loss is included
in operations. No depreciation has been taken as of March 31, 1997 since the
property, plant, and equipment have not yet been placed in service.

Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management. The respective
carrying value of certain on-balance-sheet financial instruments approximated
their fair values. These financial instruments include cash, investment
securities, accounts payable, and accrued expenses. Fair values were assumed to
approximate carrying values for these financial instruments since they are
short-term in nature and their carrying amounts approximate fair values or they
are receivable or payable on demand. The fair value of the Company's long-term
debt is estimated based upon the quoted market prices for the same or similar
issues or on the current rates offered to the Company for debt of the same
remaining maturities.

Loss per share is based on the weighted average number of common shares
outstanding during each period after giving effect to the recapitalization
described in Note 1. The Company has implemented SFAS No. 128. There is no
effect on the prior loss per share amounts based on this statement. In computing
diluted earnings per share, the following were excluded because their effects
were antidilutive: options on 250,000 shares; preferred shares convertible into
1,333,334 common shares; and 600,000 contingently issuable shares.

In the opinion of management, all adjustments, consisting only of
normal recurring adjustments necessary for a fair statement of (a) the results
of operations for the nine-month periods ended December 31, 1997 and 1996, (b)
the financial position at December 31, 1997, and (c) cash flows for the
nine-month periods ended December 31, 1997 and 1996, have been made.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

3. Property, Plant, and Equipment

Property, plant, and equipment consist of:
<TABLE>
<CAPTION>

March 31, December 31,
1997 1997
(Unaudited)

<S> <C> <C>
Land $ 90,000 $ 90,000
Building (not yet placed in service) 310,000 310,000
Building improvements in process 60,227 73,870
Machinery and equipment 245,399
Vehicles 77,156
460,227 796,425
Less accumulated depreciation 46,580
$ 460,227 $ 749,845
</TABLE>

Included in deposits is a deposit of approximately $312,000 on
machinery which has a total cost of approximately $1,247,000.

Substantially all of the Company's property, plant, and equipment is
pledged as collateral on notes payable as of December 31, 1997.

4. Notes Payable and Long-Term Debt

Notes payable and long-term debt consist of:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1997
(Unaudited)
Mortgage payable; interest adjustable annually to prime (8.5% at March
31, 1997); payable $2,954 per month including interest; unpaid
principal of approximately $238,000 due January 15, 2001;
<S> <C> <C>
collateralized by property and plant $ 288,775 $ 280,334
Stockholder notes payable; 6.0%; due on
demand; unsecured 15,000 15,000
Officers unformalized notes payable; interest
at 6.0%; due on demand; unsecured 60,517
Installment notes payable; interest ranging
from 10.5% to 11.5%; payments aggregating
$6,340 per month including interest;
collateralized by vehicles and equipment 137,708
Obligations under capital lease; payments of
$2,283 per month 44,057
303,775 537,616
Less amounts currently due 26,342 177,372
$ 277,433 $ 360,244

</TABLE>

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

4. Notes Payable and Long-Term Debt (continued)

The following is a schedule (unaudited) by year of the principal
payments required on these notes payable and long-term debt (excluding
the obligations under capital lease):
<TABLE>
<CAPTION>

5. Obligations Under Capital Lease

The Company has capitalized rental obligations under a lease of equipment. The
obligations, which mature in 1999, represent the total present value of future
rental payments discounted at the interest rates implicit in the leases. Future
minimum lease payments under this capital lease are:

Year Ending
December 31,
(Unaudited)
1998 $ 27,396
1999 20,547
Total minimum lease payments 47,943
Less amount representing interest 3,886
Present value of net minimum lease payments 44,057
Less current portion 24,834
$ 19,223

6. Lease Commitments

The Company rents its operating facility and vehicles under operating leases
that expire at various dates from 1998 through 2004. The following is a schedule
by year of future minimum rental payments required under operating leases that
have an initial or remaining noncancelable lease term in excess of one year as
of December 31, 1997 (unaudited):

1998 $ 49,600
1999 15,900
2000 15,100
2001 9,500
Thereafter 22,900
$ 113,000

Rent expense amounted to approximately $5,000 and $27,000 for the year ended
March 31, 1997 and the period ended December 31, 1997 (unaudited), respectively.
There was no rent for the periods ended March 31, 1996 or December 31, 1996
(unaudited).

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

7. Income Taxes

No provision for income taxes is recorded due to the amount of tax losses
incurred since inception. The Company had unused net operating loss
carryforwards to carry forward against future years' taxable income of
approximately $1,370,000, expiring in 2011 and 2012. Temporary differences
giving rise to the deferred tax assets consist primarily of the deferral and
amortization of start-up costs for tax reporting purposes. Management has
established a valuation allowance equal to the amount of the deferred tax assets
due to the uncertainty of the Company's realization of this benefit.

The components of deferred tax assets consist of the following:
<TABLE>
<CAPTION>

March 31, December 31,
1997 1997
(Unaudited)
Deferred tax assets:
<S> <C> <C>
Start up costs $ 72,000 $ 60,000
Net operating loss carryforwards 24,000 515,000

Gross deferred tax assets 96,000 575,000

Valuation allowance (96,000) (575,000)

Total deferred tax assets $ 0 $ 0
</TABLE>

During 1996 and in 1997, substantial changes of ownership of the Company
occurred. Under federal tax law, this change in ownership of the Company will
significantly restrict future utilization of the net operating loss
carryforwards. Other than the net operating losses which have been limited
because of the change in ownership as described above, any other net operating
losses will expire if not utilized within 15 years of the year they were
incurred.

8. Commitments and Contingencies

During the period ended December 31, 1997, the Company entered into employment
agreements with terms ranging from one to five years with its officers which
provide for minimum annual salaries. The one-year agreement has automatic
renewal provisions. The total salary commitment under these agreements amounts
to $216,000 per year. In addition to salary, these agreements call for the
issuance of a total of 750,000 shares of common stock, payable in equal annual
installments over five years beginning 90 days from the employment contract
date. All unissued shares are to be held in escrow. If the employment
relationship between the Company and an officer ceases, all unissued shares are
to be transferred back to the Company.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

9. Stock

The following is a summary of common stock issued for services and $100,000
during the period ended December 31, 1997 (unaudited):

<TABLE>
<CAPTION>
Number Subscriptions
Month of Shares Amount Receivable
<S> <C> <C>
April 1997 70,000 $ 35,000
August 1997 50,000 25,000
September 1997 (including
$100,000 received) 400,000 920,000 $ (306,250)
October 1997 100,000 50,000
620,000 $ 1,030,000 $ (306,250)
</TABLE>

Subscriptions receivable represent the value of stock issued for services to be
performed in future periods subsequent to December 31, 1997.

During the period ended December 31, 1997, the Company issued 2,500 shares of
Series A convertible preferred stock. These shares are nonvoting, and the
holders are entitled to receive an eight percent annual dividend and have a
liquidation preference of $1,300 per share. These preferred shares are
convertible at any time at the option of the holder into common shares equal to
$1,000 divided by the lower of (i) 65 percent of the average market price of the
common stock for the five trading days prior to the conversion date, or (ii)
$1.875. The Series A preferred shares contain a provision that the Company shall
increase the conversion rate by five percent for each of the following
occurrences:

1. Failure to file a registration statement under the Securities Act of
1933 covering the common stock within 30 days of closing date;
2. Failure of the registration to become effective within 120 days of
closing date; and
3. Failure to issue the common shares within the time limits set forth in
the amended articles of incorporation.

These shares, if converted using the aforementioned $1.875, would convert to a
maximum of 1,333,334 common shares.

10. Stock Options

As part of a "lead generation/corporate relations agreement," the Company issued
250,000 options to acquire common stock. These options are exercisable (50,000
annually) over the next five years. The terms of this agreement also call for
the Company to issue an additional 100,000 shares should the Company fail to
complete the registration of these options within 120 days of this agreement.

The Company applies APB Opinion 25 in accounting for its stock options. There
would have been no effect on the net loss and the net loss per share for the
period ended December 31, 1997 had compensation cost been determined on the
basis of fair value pursuant to FASB No. 123.

<PAGE>

Aqua Clara Bottling & Distribution, Inc.
and Subsidiary
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements

Periods August 17, 1995 (Date of Inception)
Through December 31, 1997

10. Stock Options (continued)

Following is a summary of stock option activity for the period ended December
31, 1997 (unaudited):

Weighted
Number of Average
Shares Exercise Price
Outstanding at March 31, 1997 0
Granted during the period ended
December 31, 1997 250,000 $ 5.00
--------
Outstanding at December 31, 1997 250,000 $ 5.00
========
Weighted average fair value of options
granted during 1997 $ 4.14

The following is a summary of options outstanding at December 31, 1997
(unaudited):

Weighted
Exercise Number Average Remaining
Price of Shares Contractual Life Exercise Date
<S> <C> <C> <C> <C> <C> <C>
$3.50 50,000 1 November 17, 1998
$4.20 50,000 2 November 17, 1999
$4.70 50,000 3 November 17, 2000
$5.60 50,000 4 November 17, 2001
$7.00 50,000 5 November 17, 2002

</TABLE>

<PAGE>

No dealer, salesman or other person is authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offer made hereby, and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a solicitation
to an offer to buy the securities offered hereby to any person in any state or
other jurisdiction in which such offer or solicitation would be unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that the information contained herein
is correct as of any time subsequent to the date hereof.

TABLE OF CONTENTS

Page

Additional Information...................... 2
Prospectus Summary.......................... 3
Risk Factors................................ 4
Dividend Policy............................. 8
Market Price of Common Stock................ 9
Management's Discussion and Analysis........ 9
Business and Plan of Operation.............. 10
Management.................................. 15
Principal Shareholders...................... 16
Certain Transactions........................ 16
Selling Shareholders........................ 18
Description of Securities................... 19
Legal Matters............................... 20
Experts..................................... 20
Financial Statements........................ 21

<PAGE>

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.
PART II

Item 24. Indemnification of Directors and Officers.

The Company has adopted provisions in its articles of incorporation and
bylaws that limit the liability of its directors and provide for indemnification
of its directors and officers to the full extent permitted under the Colorado
General Business Act. Under the Company's articles of incorporation, and as
permitted under the Colorado General Business Act, directors are not liable to
the Company or its stockholders for monetary damages arising from a breach of
their fiduciary duty of care as directors. Such provisions do not, however,
relieve liability for breach of a director's duty of loyalty to the Company or
its stockholders, liability for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, liability for transactions
in which the director derived as improper personal benefit or liability for the
payment of a dividend in violation of Colorado law. Further, the provisions do
not relieve a director's liability for violation of, or otherwise relieve the
Company or its directors from the necessity of complying with, federal or state
securities laws or affect the availability of equitable remedies such as
injunctive relief or recision.

At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding that may result in a claim for indemnification by any director or
officer.

Item 25. Other Expenses of Issuance and Distribution.

Filing fee under the Securities Act of 1933 $ 1,718.78
Printing and engraving(1) 1,000.00
Legal Fees(1) 12,000.00
Auditing Fees(1) 26,000.00
Miscellaneous(1) 1,281.22
TOTAL $ 42,000.00

(1) Estimates

Item 26. Recent Sales of Unregistered Securities.

<PAGE>

shares of common stock to Olympus Capital for consulting services rendered
pursuant to a one-year consulting contract dated October 30, 1997.

Gulf Atlantic Publishing and Arrow Marketing purchased these 400,000
shares of $.25 per share pursuant to a March, 1997 option agreement.

In December, 1997 the Company issued 2,500 shares of Series A
Convertible Preferred Stock to twenty-two purchasers in an offering made under
Section 4(2). Each purchaser executed a subscription agreement and consented to
the imprinting of a restrictive legend on the stock certificate.

All of the transactions referred to above are exempt from the
registration requirements of the Securities Act of 1933, as amended, by virtue
of Section 4(2) thereof covering transactions not involving any public offering
or involve no "offer" or "sale." No underwriter was involved. As a condition
precedent to each sale, the respective purchaser was required to execute an
investment letter and consent to the imprinting of a restrictive legend on each
stock certificate received from the Company.

Item 27. Exhibits

3. Certificate of Incorporation and Bylaws

3.1. Articles of Incorporation(1)
3.2 Articles of Amendment for Series A Preferred Stock(1)
3.3 Bylaws(1)

5. Opinion of Hand & Hand as to legality of securities being registered.(2)

10. Material Contracts

10.1 Employment Agreement with John McAvoy(1)
10.2 Employment Agreement with John C. Plunkett(1)
10.3 Employment Agreement with Rand L. Gray(1)
10.4 Lead Generation/Corporate Relations Agreement dated
November 17, 1997 with Corporate Relations Group, Inc.
21. Subsidiaries of the small business issuer-Pocotopaug Investment, a Florida
Corporation, is the only subsidiary. It does business under the
same trade name as the Registrant.

23. Consents of Experts and Counsel

23.1 Consent of Pender Newkirk & Company(1)
23.2 Consent of Hand & Hand included in Exhibit 5 hereto

<PAGE>

24. Powers of Attorney

24.1 Powers of Attorney are included on signature page(1)

(1) Filed herewith.
(2) To be filed by amendment.

All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this filing.

Item 28. Undertakings.

(a) The undersigned small business issuer hereby undertakes:

(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:

(I) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii)
Reflect in the prospectus any facts or events which, individually or together
represent a fundamental change in the information in the registration statement;

(iii)

Include any material or changed information the plan of distribution.

(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities as at that time to be the initial
bona fide offering thereof.

(3) File a post effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.

(d) To provide to the underwriter at the Closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as may be required by the underwriter to permit prompt delivery to each
purchaser.

(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel that matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

(f) The undersigned small business issuer hereby undertakes that
it will:

(1) For purposes of determining any liability under the
Securities Act that the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the

<PAGE>

Securities Act shall be deemed to be a part of this registration statement as of
the time the Commission declared it effective.

(2) For the purpose of determining any liability under the
Securities Act, that each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities offered in the
registration statement, and that offering of the securities at that time as the
initial bona fide offering of those securities.

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Largo, State of Florida on January 12, 1998.

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.

By: /s/ John S. McAvoy
John S. McAvoy
President

The undersigned officer and/or director of Aqua Clara Bottling and
Distribution, a Colorado corporation (the "Corporation"), hereby constitutes and
appoints John S. McAvoy and Rand L. Gray, and each of them, with full power of
substitution and resubstitution, as attorney to sign for the undersigned in any
and all capacities this Registration Statement and any and all amendments
thereto, and any and all applications or other documents to be filed pertaining
to this Registration Statement with the Securities and Exchange Commission or
with any states or other jurisdictions in which registration is necessary to
provide for notice or sale of all or part of the securities to be registered
pursuant to this Registration Statement and with full power and authority to do
and perform any and all acts and things whatsoever required and necessary to be
done in the premises, as fully to all intents and purposes as the undersigned
could do if personally present. The undersigned hereby ratifies and confirms all
that said attorney-in-fact and agent, or any of his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof and incorporate such
changes as any of the said attorneys-in-fact deems appropriate.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on January 12, 1998.

By: /s/ John S. McAvoy President, CEO and Director
John S. McAvoy (principal executive officer)

By: /s/Rand L. Gray Treasurer, CFO and Director
Rand L. Gray (principal accounting and financial officer)

By: /s/John C. Plunkett Secretary, COO and Director
John C. Plunkett

ARTICLES OF INCORPORATION

AQUA CLARA BOTTLING & DISTRIBUTION, INC.

KNOW ALL MEN BY THESE PRESENTS that the undersigned Incorporator, being
a natural person of the age of eighteen years of age or older and desiring to
form a body corporate under the laws of the State of Colorado, does hereby sign,
verify and deliver in duplicate to the Secretary of State of Colorado these
Articles of Incorporation:

ARTICLE I
Name

The name of the Corporation is AQUA CLARA BOTTLING & DISTRIBUTION, INC.

ARTICLE II
Purposes

This Corporation is organized for the purpose of transacting any and
all lawful activities or business for which corporations may be formed under
Articles 101 to 117 of Title 7 of the Colorado Revised Statutes, as designated
by the board of directors of the corporation.

ARTICLE III
Capital Structure

The maximum number of shares of stock which this Corporation is
authorized to issue or to have outstanding at any time shall be 55,000,000
shares, of which 50,000,000 shares shall be common stock, no par value per
share, and of which 5,000,000 shares shall be preferred stock, no par value per
share.

The holders of common stock shall have one vote for each share of such
stock held.

The holders of record of the preferred stock shall be entitled to cash
dividends when, as and if declared by the Board of Directors at the time, in the
manner and at the rate per share determined by the Board of Directors in the
resolution authorizing each series of preferred stock. Dividends payable on the
preferred stock must be paid or set apart for payment before any dividends may
be declared and paid on the common stock with respect to the same time period.

In the event of any voluntary or involuntary liquidation, dissolution
or winding up of this Corporation, the holders of record of the outstanding
preferred stock shall be entitled to the amount payable upon their shares as
determined by the Board of Directors in the resolution authorizing each series
of preferred stock. After payment to the holders of the preferred stock of the
amount payable to them as above set forth, the remaining assets of this
Corporation shall be payable to, and distributed ratably among, the holders of
record of the common stock.

<PAGE>

The common stock may also be subject to other rights and preferences
that the Board of Directors may give to any series or classes of the preferred
stock.

The Board of Directors is hereby expressly authorized to issue the
common or preferred stock of this Corporation in one or more series or classes
as it may determine by resolution from time to time. In the resolution
establishing a series or class, the Board of Directors shall give to the series
or class a distinctive designation so as to distinguish it from all other series
and classes of stock, shall determine the number of shares in such series and
shall fix the preferences, limitations and relative rights thereof. All of the
shares of any one series shall be alike in every particular.

All stock of this Corporation, whether common stock or preferred stock,
shall be issued only upon the receipt of the full consideration fixed for the
issuance of such stock. Such stock one issued, shall be fully paid and
nonassessable.

No holder of shares of any class of this Corporation shall have (1) any
preemptive right to subscribe for or acquire additional shares of this
Corporation of the same or any other class, whether such shares shall be hereby
or hereafter authorized, or (2) any right to acquire any shares which may be
held in the treasury of this Corporation. All such additional or treasury shares
may be issued or reissued for such consideration, at such time, and to such
persons as the Board of Directors may from time to time determine.

ARTICLE IV
No Cumulative Voting by Shareholders

Cumulative voting shall not be allowed in the election of Directors of
this Corporation and every shareholder entitled to vote at such election shall
have the right to vote the number of shares owned by him for as many persons as
there are Directors to be elected, and for whose election he has a right to
vote.

ARTICLE V
Registered and Initial Principal Office and Registered Agent

The registered office and initial principal office of the Corporation
is located at 4155 E. Jewell Avenue, Suite 909, Denver, Colorado 80222, and the
name of the registered agent of the Corporation at such address is Edward H.
Hawkins.

ARTICLE VI
Incorporator

The name and address of the Incorporator is Edward H. Hawkins, 4155 E.
Jewell Avenue,
Suite 909, Denver, CO 80222.

<PAGE>

ARTICLE VII
Board of Directors

The number of individuals to serve on the Board of Directors shall be
set forth in the Bylaws of the Corporation; provided, however, that the Initial
Board of Directors shall consist of one person below-named:

Name of Director Address

Edward H. Hawkins 4155 E. Jewell Avenue, Suite 909
Denver, Colorado 80222

ARTICLE VIII
Corporate Opportunity

The Directors, officers and other members of management of this
Corporation shall be subject to the doctrine of "corporate opportunities" only
insofar as it applied to business opportunities in which this Corporation has
expressed an interest as determined from time to time by this Corporation's
Board of Directors as evidenced by resolutions appearing in this Corporation's
minutes. Once such areas of interest are delineated, all such business
opportunities within such areas of interest which come to the attention of the
Directors, officers and other members of management of this Corporation shall be
disclosed promptly to this Corporation and made available to it. The Board of
Directors may reject any business opportunity presented to it and thereafter any
Directors, office or other member of management may avail himself of such
opportunity. Until such time as this Corporation, through its Board of
Directors, has designated an area of interest, the Directors, officers and other
members of management of this Corporation shall be free to engage in such areas
of interest on their own and this doctrine shall not limit the right of any
Director, officer or other member of management of this Corporation to continue
a business existing prior to the time that such area of interest is designated
by the Corporation. This provision shall not be construed to release any
employee of this Corporation (other than a Director, an officer or member of
management) from any duties which he may have to this Corporation.

ARTICLE IX
Indemnification of Directors, Officers and Others

This Corporation shall:

A. Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and

<PAGE>

reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in the best
interests of the Corporation and, with respect to any criminal action or
proceedings, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that such person did not meet the foregoing standard of
conduct.

B. Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of the Corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the Corporation; but no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been adjudged
liable to the Corporation.

C. Indemnify a Director, officer, employee or agent of the Corporation
who has been wholly successful, on the merits or otherwise, in defense of any
action, suit or proceeding referred to in Subparagraph A or B of this Article
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.

D. Authorize payment of expenses (including attorney's fees) incurred
in defending a civil or criminal actio, suit or proceeding in advance of the
final disposition of such action, suit or proceeding as authorized in
Subparagraph E of this Article i

1. The Director, officer, employee or agent furnishes to this Corporation a
written affirmation of such person's good faith belief that he has met the
applicable standard of conduct required to receive indemnification;

2. Such person furnishes to this Corporation an undertaking, executed
personally or on behalf of such person to repay such amount if it is
ultimately determined that he did not meet the applicable standard of
conduct; and

3. A determination is made that the facts then known to
those making the determination would not preclude
indemnification pursuant to this Article.

E. Authorize indemnification under Subparagraph A or B of this Article
(unless ordered by a court) in the specific case upon a determination that
indemnification of the Director, officer, employee or agent its proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Subparagraph A or B. Such determination shall be made:

1. By the Board of Directors by a majority vote of those present at a meeting
at which a quorum is present, and only those Directors not parties to such

<PAGE>

action, suit or proceeding shall be counted in satisfying the quorum
requirement; or

2. If such a quorum cannot be obtained, by a majority
vote of a committee of the Board of Directors
designated by the Board of Directors, which committee
shall consist of two or more Directors not parties to
such action, suite or proceeding; except that
Directors who are parties to such action, suit or
proceeding may participate in the designation of
Directors for the committee; or

3. If such a quorum cannot be obtained, and such a
committee cannot be established, or even if such
quorum is obtained or such a committee is designated,
if a majority of the Directors constituting such
quorum or such committee so directs, either:

(a) By independent legal counsel selected by a
vote of the Board of Directors or such
committee in the manner specified in
Subparagraph E.1 or E.2 of this Article or,
if a quorum of the full Board of Directors
cannot be obtained and such a committee
cannot be established, by independent legal
counsel selected by a majority vote of the
full Board of Directors; or

(b) By the shareholders.

Authorization of indemnification and advance of expenses shall be made
in the same manner as the determination that indemnification or advance of
expenses is permissible; except that, if such determination is made by
independent legal counsel, authorization of indemnification and advance of
expenses shall be made by the body the selected such counsel.

F. Purchase and maintain insurance, if economically feasible for the
Corporation to do so in the sole judgment of the Corporation's Board of
Directors, on behalf of any person who is or was a director, officer, employee
or agent of the Corporation or who is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him, incurred by him in any such capacity or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provision of this Article.

The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
these Articles of Incorporation, the Bylaws, or any agreement, vote of
shareholders or disinterested directors or otherwise, and any procedure provided
for by any of the foregoing, both as to action in his official capacity and as
to action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit or heirs, executors and administrators of such a
person.

<PAGE>

ARTICLE X
Amendment

This Corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation or any amendment to them, and all
right and privileges conferred upon the shareholders, directors and officers are
subject to this reservation. The Articles of Incorporation my be amended in
accordance with the provisions of the laws of the State of Colorado, as amended
from time to time, unless more specific provisions for amendments are adopted by
this Corporation pursuant to law.

IN WITNESS WHEREOF, the undersigned has set his hand and seal this 29th
day of July, 1996.

Edward H. Hawkins, Incorporator

CONSENT OF REGISTERED AGENT

The undersigned hereby consents to the appointment as registered agent
for the above named corporation under Article 105 of the Colorado Business
Corporation act, until such time as he resigns such position.

Edward H. Hawkins

<PAGE>

ARTICLES OF AMENDMENT FILED TO DETERMINE RIGHTS OF SHARES
(CERTIFICATE OF DETERMINATION)

John S. McAvoy and John C. Plunkett certify that they are the President and
Secretary, respectively, of Aqua Clara Bottling and Distribution, Inc., a
Colorado corporation (hereinafter referred to as the "Corporation" or the
"Company"); that, pursuant to the Articles of Incorporation, as amended, and
Section 7-106-102 of the Colorado Business Corporation Act, the Board of
Directors of the Corporation adopted the following resolutions on November 28,
1997; and that none of the Series A Convertible Preferred Stock referred to in
these document has been issued.

1. Creation of Series A Convertible Preferred Stock. There is hereby
created a series of preferred stock consisting of 2,500 shares and designated as
the Series A Convertible Preferred Stock, having the voting powers, preferences,
relative, participating, limitations, qualifications optional and other special
rights and the qualifications, limitations and restrictions thereof that are set
forth below.

2. Dividend Provisions. The holders of shares of Series A Convertible
Preferred Stock shall be entitled to receive, an 8% annual dividend, equal in
value to $80.00 per share, payable on each July 1 commencing on July 1, 1998 on
conversion pro rata based on a 360-day year. In the option of the Corporation,
such dividend may be paid in cash or in Common Stock valued at the Conversion
Rate in effect as of such July 1 or the Conversion Date. Each share of Series A
Convertible Preferred Stock shall rank on a parity with each other share of
Series A Convertible Preferred Stock with respect to dividends.

3. Redemption Provisions. The Series A Convertible Preferred
Stock is not redeemable except with the written consent of the
holders thereof.

4. Liquidation Provisions. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the Series A
Convertible Preferred Stock shall be entitled to receive an amount equal to
$1,300.00 per share. After the full preferential liquidation amount has been
paid to, or determined and set apart for the Series A Convertible Preferred
Stock and all other series of Preferred Stock hereafter authorized and issued,
if any, the remaining assets of the Corporation available for distribution to
shareholders shall be distributed ratably to the holders of the common stock. In
the event the assets of the Corporation available for distribution to its
shareholders are insufficient to pay the full preferential liquidation amount
per share required to be paid the Corporation's Series A Convertible Preferred
Stock, the entire amount of assets of the Corporation available for distribution
to shareholders shall be paid up to their respective full liquidation amounts
first to the Series A Convertible Preferred Stock, then to any other series of
Preferred Stock hereafter authorized and issued, all of which amounts shall be

<PAGE>

distributed ratably among holders of each such series of Preferred Stock, and
the common stock shall receive nothing. A reorganization or any other
consolidation or merger of the Corporation with or into any other corporation,
or any other sale of all or substantially all of the assets of the Corporation,
shall not be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 4, and the Series A Convertible
Preferred Stock shall be entitled only to (i) the right provided in any
agreement or plan governing the reorganization or other consolidation, merger or
sale of assets transaction, (ii) the rights contained in the Colorado Business
Corporation Act and (iii) the rights contained in other Sections hereof.

5. Conversion Provisions. The holders of shares of Series A
Convertible Preferred Stock shall have conversion rights as follows
(the "Conversion Rights"):

(a) Right to Convert. (1) Each share of Series A Convertible Preferred
Stock (the "Preferred Shares") shall be convertible, at the option of its
holder, at any time, into a number of shares of common stock of the Company
(the "Common Stock") at the initial conversion rate (the "Conversion Rate")
defined below. The initial Conversion Rate, subject to the adjustments
described below, shall be a number of shares of Common Stock equal to
$1,000 divided by the lower of (i) Sixty Five Percent (65%) of the average
Market Price of the Common Stock for the five trading days immediately
prior to the Conversion Date (defined below) or (ii) $1.875, increased
proportionally for any reverse stock split and decreased proportionally for
any forward stock split or stock dividend. For purposes of this Section
5(a)(1), Market Price for any date shall be the closing bid price of the
Common Stock on such date, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), or the closing
bid price in the over-the-counter market if other than Nasdaq.

(2) No fractional shares of Common Stock shall be issued upon conversion of
the Preferred Shares, and in lieu thereof the number of shares of Common
Stock issuable for each Preferred Share converted shall be rounded to the
nearest whole number. Such number of whole shares of Common Stock issuable
upon the conversion of one Preferred Share shall be multiplied by the
number of Preferred Shares submitted for conversion pursuant to the Notice
of Conversion (defined below) to determine the total number of shares of
Common Stock issuable in connection with any conversion.

(3) In order to convert the Preferred Shares into shares of Common Stock,
the holder of the Preferred Shares shall: (i) complete, execute and deliver
to the Corporation the conversion certificate attached hereto as Exhibit A
(the "Notice of Conversion"); and (ii) surrender the certificate or
certificates representing the Preferred Shares being converted (the
"Converted Certificate") to the Corporation. The Notice of Conversion shall
be effective and in full force and effect if delivered to the Corporation
by facsimile transmission at (813) 548-7109. Provided that a copy of

<PAGE>

the Notice of Conversion is delivered to the Corporation on such date by
facsimile transmission or otherwise, and provided that the original Notice
of Conversion and the Converted Certificate are delivered to the
Corporation within three (3) business days thereafter at 10270 72nd Street
North, Largo, Florida 33777, the date on which notice of conversion is
given (the "Conversion Date") shall be deemed to be the date set forth
therefor in the Notice of Conversion; and the person or persons entitled to
receive the shares of Common stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of the Conversion Date. If the original Notice of
Conversion and the Converted Certificate are not delivered to the
Corporation within three (3) business days following the Conversion Date,
the Notice of Conversion shall become null and void as if it were never
given and the Corporation shall, within two (2) business days thereafter,
return to the holder by overnight courier any Converted Certificate that
may have been submitted in connection with any such conversion. In the
event that any Converted Certificate submitted represents a number of
Preferred Shares that is greater than the number of such shares that is
being converted pursuant to the Notice of Conversion delivered in
connection therewith, the Corporation shall deliver, together with the
certificates for the shares of Common Stock issuable upon such conversion
as provided herein, a certificate representing the remaining number of
Preferred Shares not converted.

(4) Upon receipt of a Notice of Conversion, the Corporation shall
absolutely and unconditionally be obligated to cause a certificate of
certificates representing the number of shares of Common Stock to which a
converting holder of Preferred Shares shall be entitled as provided herein,
which shares shall constitute fully paid and nonassessable shares of Common
Stock that are freely transferable on the books and records of the
Corporation and its transfer agents, to be issued to, delivered by
overnight courier to, and received by such holder by the fifth (5th)
calendar day following the Conversion Date. Such delivery shall be made at
such address as such holder may designate therefor in its Notice of
Conversion or in its written instructions submitted together therewith.

(5) No less than 25 shares of Series A Convertible Preferred Stock may be
converted at any one time, unless the holder then holds less than 25 shares
and converts all shares at that time.

(b) Adjustments to Conversion Rate. (1) Reclassification,
Exchange and Substitution. If the Common Stock issuable on
conversion of the Series A Convertible Preferred Stock shall be
changed into the same or a different number of shares of any other
class or classes of stock, whether by capital reorganization,
reclassification, reverse stock split or forward stock split or
stock dividend or otherwise (other than a subdivision or
combination of shares provided for above), the holders of the
Series A Convertible Preferred Stock shall, upon its conversion,
be entitled to receive, in lieu of the Common Stock which the
holders would have become entitled to receive but for such change,

<PAGE>

a number of shares of such other class or classes of stock that would have
been subject to receipt by the holders if they had exercised their rights
of conversion of the Series A Convertible Preferred Stock immediately
before that change.

(2) Reorganizations, Mergers, Consolidations or Sale of Assets. If at any
time there shall be a capital reorganization of the Corporation's common
stock (other than a subdivision, combination, reclassification or exchange
of shares provided for elsewhere in this Section (5) or merger of the
Corporation into another corporation, or the sale of the Corporation's
properties and assets as, or substantially as, an entirety to any other
person, then, as a part of such reorganization, merger or sale, lawful
provision shall be made so that the holders of the Series A Convertible
Preferred Stock shall thereafter be entitled to receive upon conversion of
the Series A Convertible Preferred Stock, the number of shares of stock or
other securities or property of the Corporation, or of the successor
corporation resulting from such merger, to which holders of the Common
Stock deliverable upon conversion of the Series A Convertible Preferred
Stock would have been entitled on such capital reorganization, merger or
sale if the Series A Convertible Preferred Stock had been converted
immediately before that capital reorganization, merger or sale to the end
that the provisions of this paragraph (b)(2) (including adjustment of the
Conversion Rate then in effect and number of shares purchasable upon
conversion of the Series A Convertible Preferred Stock) shall be applicable
after that event as nearly equivalently as may be practicable.

(3) Additional Shares In the event (a) the Company does not file a
registration statement under the Securities Act of 1933 covering the Common
Stock issuable upon conversion of the Series A Convertible Preferred Stock
within 30 days of December 8, 1997 (the "Closing Date"), (b) the
registration statement is not declared effective within 120 days of the
Closing Date or (c) the Company does not issue the Common Shares within the
time limits set forth in the penultimate sentence of Section 5(a)(1), the
Conversion Rate shall be adjusted to increase the number of shares of
common stock assessable by 5%. The foregoing adjustments are cumulative and
not exclusive of each other, with the intent that the adjustments under
this section 3(b)(3) may be a total of 5%, 10% or 15%.

(c) No Impairment. The Corporation will not, by amendment of its Articles
of Incorporation or through any reorganization, recapitalization, transfer
of assets, merger, dissolution, or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times
in good faith assist in the carrying out of all the provision of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Convertible Preferred Stock against impairment.

<PAGE>

(d) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Rate for any shares of Series A
Convertible Preferred Stock, the Corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof
and prepare and furnish to each holder of Series A Convertible Preferred
Stock effected thereby a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at
any time of any holder of Series A Convertible Preferred Stock, furnish or
cause to be furnished to such holder a like certificate setting forth (i)
such adjustments and readjustments, (ii) the Conversion Rate at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the
conversion of such holder's shares of Series A Convertible Preferred Stock.

(e) Notices of Record Date. In the event of the establishment by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, the
Corporation shall mail to each holder of Series A Preferred Stock at least
twenty (20) days prior to the date specified therein, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend or distribution and the amount and character of such dividend or
distribution.

(f) Reservation of Stock Issuable Upon Conversion. The Corporation shall at
all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion
of the shares of the Series A Convertible Preferred Stock such number of
its shares of Common Stock as shall from time to time be sufficient, based
on the Conversion Rate then in effect, to effect the conversion of all then
outstanding shares of the Series A Preferred Stock. If at any time the
number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the
Preferred Stock, then, in addition to all rights, claims and damages to
which the holders of the Series A Convertible Preferred Stock shall be
entitled to receive at law or in equity as a result of such failure by the
Corporation to fulfill its obligations to the holders hereunder, the
Corporation will take any and all corporate or other action as may, in the
opinion of its counsel, be helpful, appropriate or necessary to increase
its authorized but unissued shares of Common Stock to such number of shares
as shall be sufficient for such purpose.

(g) Notices. Any notices required by the provisions hereof to be given to
the holders of shares of Series A Convertible Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid and
return receipt requested, and addressed to each holder of record at its
address appearing on the books of the Corporation or to such other address
of such holder or its

<PAGE>

representative as such holder may direct.

6. Voting Provisions. Except as otherwise expressly provided
or required by law, the Series A Convertible Preferred Stock shall
have no voting rights.

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
of Series A Convertible Preferred Stock to be duly executed by its Chairman and
attested to by its Secretary this _____ day of November, 1997 who, by signing
their names hereto, acknowledge that this Certificate of Designation is the act
of the Company and state to the best of their knowledge information and belief,
under the penalties of perjury, that the above matters and facts are true in all
material respects.

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.

John H. McAvoy, President

John C. Plunkett

<PAGE>

EXHIBIT A

CONVERSION CERTIFICATE

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.

Series A Convertible Preferred Stock

The undersigned holder ( the "Holder") is surrendering to Aqua Clara
Bottling and Distribution, Inc., a Colorado corporation (the "Company"), one or
more certificates representing shares of Series A Convertible Preferred Stock of
the Company (the "Preferred Stock") in connection with the conversion of all or
a portion of the Preferred Stock into shares of Common Stock, no par value per
share, of the Company (the "Common Stock") as set forth below.

1. The Holder understands that the Preferred Stock were issued by the
Company pursuant to the exemption from registration under the United States
Securities Act of 1933, as amended (the "Securities Act"), provided by
Regulation D promulgated thereunder.

2. The Holder represents and warrants that all offers and sales of the
Common Stock issued to the Holder upon such conversion of the Preferred Stock
shall be made (a) pursuant to an effective registration statement under the
Securities Act, (in which case the Holder represents that a prospectus has been
delivered) (b) in compliance with Rule 144, or (c) pursuant to some other
exemption from registration.

Number of Shares of Preferred Stock being converted:

Applicable Conversion Price:

Number of Shares of Common Stock Issuable:

Number of Dividend Shares:

Conversion Date:

Delivery Instructions for certificates of Common Stock and for new
certificates representing any remaining shares of Preferred Stock:

NAME OF HOLDER:

<PAGE>

(Signature of Holder)

<PAGE>

BYLAWS

AQUA CLARA BOTTLING & DISTRIBUTION, INC.

ARTICLE I
Offices

The principal office of the Corporation in Colorado shall initially be
located in Denver, Colorado. The Corporation may have such other offices, either
within or outside the State of Colorado, as the Board of Directors may
designate, or as the business of the Corporation may require from time to time.

The registered office of the Corporation required by the Colorado Business
Corporation Act to be maintained in the State of Colorado may be, but need not
be, identical with the principal office, and the address of the registered
office may be changed from time to time by the Board of Directors.

ARTICLE II
Shareholders

Section 1. Annual Meeting.

The annual meeting of the shareholders shall be held pursuant to notice
given by the Board of Directors for the purpose of electing directors and for
the transaction of such other business as may come before the meeting.

Section 2. Special Meetings.

Special meetings of the shareholders, for any purpose, unless otherwise
prescribed by statute, may be called by the President or by the Board of
Directors, and shall be called by the President at the request of the holders of
not less than ten (10%) percent of all outstanding shares of the Corporation
entitled to vote at the meeting. Such request shall state the purposes of the
proposed meeting.

Section 3. Adjournment.

a. When the annual meeting is convened, or when any special meeting is
convened, the presiding officer may adjourn it for such period of time as may be
reasonably necessary to reconvene the meeting at another place and another time.

b. The presiding officer shall have the power to adjourn any meeting of the
shareholders for any proper purpose, including, but not limited to, lack of a
quorum, to secure a more adequate meeting place, to elect officials to count and
tabulate votes, to review any shareholder proposals or to pass upon any
challenge which may properly come before the meeting.

c. When a meeting is adjourned to another time or place, it
shall not be necessary to give any notice of the adjourned meeting
if the time and place to which the meeting is adjourned are

<PAGE>

announced at the meeting at which the adjournment is taken, and any business may
be transacted at the adjourned meeting that might have been transacted on the
original date of the meeting. If, however, after the adjournment the Board fixes
a new record date for the adjourned meeting, a notice of the adjourned meeting
shall be given in compliance with Subsection (4)(a) of this Article II to each
shareholder of record on the new record date entitled to vote at such meeting.

Section 4. Notice of Meeting; Purpose of Meeting; Waiver

a. Each shareholder of record entitled to vote at any meeting shall given
in person, or by first class mail, postage prepaid, written notice of such
meeting which, in the case of a special meeting, shall set forth the purpose(s)
for which the meeting is called, not less than ten (10) or more then fifty (50)
days before the date of such meeting. If mailed, such notice is to be sent to
the shareholder's address as it appears on the stock transfer books of the
Corporation unless the shareholder shall have requested of the Secretary in
writing at least fifteen (15) days prior to the distribution of any required
notice that any notice intended for him to be sent to some other shareholder,
notice sent to a shareholder's address as it appears on the stock transfer books
of this Corporation as of the record date shall be deemed properly given. Any
notice of a meeting sent by the United States mail shall be deemed delivered
when deposited with proper postage thereon with the United States Postal Service
or in any mail receptacle under its control.

b. A shareholder waives notice of any meeting by attendance, either in
person or by proxy, at such meeting or by waiving notice in writing either
before, during or after such meeting. Attendance at a meeting for the express
purpose of objecting that the meeting was not lawfully called or convened,
however, will not constitute a waiver of notice by a shareholder stating at the
beginning of the meeting, his objection that the meeting is not lawfully called
or convened.

c. Whenever the holders of at least eighty (80%) percent of the capital
stock of the Corporation having the right to vote shall be present at any annual
or special meeting of shareholders, however called or notified, and shall sign a
written consent thereto on the minutes of such meeting, the meeting shall be
valid for all purposes.

d. A Waiver of Notice signed by all shareholders entitled to vote at a
meeting of shareholders may also by used for any other proper purpose including,
but not limited to, designating any place within or without the State of
Colorado as the place for holding such a meeting.

e. Neither the business to be transacted at, not the purpose
of, any regular or special meeting of shareholders need be
specified in any written Waiver of Notice.

Section 5. Closing of Transfer Books; Record Date;
Shareholders' List.

a. In order to determine the holders of record of the capital

<PAGE>

stock of the Corporation who are entitled to notice of meetings, to vote at a
meeting or adjournment thereof, or to receive payment of any dividend, or for
any other purpose, the Board of Directors may fix a date not more than fifty
(50) days prior to the date set for any of the above-mentioned activities for
such determination of shareholders.

b. If the stock transfer books shall be closed for at least
ten (10) days immediately preceding such meeting.

c. In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the date for such determination of shareholders, such
date in any case to be not more than fifty (50) days and, in case of a meeting
of shareholders, not less than ten (10) days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken.

d. If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or to receive payment of a dividend, the date on which notice
of meeting is mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders.

e. When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date under this section for the adjourned meeting.

f. The officer or agent having charge of the stock transfer books of the
Corporation shall make, as of a date at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, with the address of each shareholder and the
number and class and series, if any, of shares held by each shareholder. Such
list shall be kept on file at the registered office of the Corporation or at the
office of the transfer agent or registrar of the Corporation for a period of ten
(10) days prior to such meeting and shall be available for inspection by any
shareholder at any time during usual business hours. Such list shall be produced
and kept open at the time and place of any meeting of shareholders and shall be
subject to inspection by any shareholder at any time during the meeting.

g. The original stock transfer books shall be prima facie evidence as to
the shareholders entitled to examine such list or stock transfer books or to
vote at any meeting of shareholders.

h. If the requirements of Subsection 5(f) of this Article II have not been
substantially complied with then, on the demand of any shareholder in person or
by proxy, the meeting shall be adjourned until such requirements are complied
with.
I. If no demand pursuant to Section 5(h) is made, failure to comply with
the requirements of this Section shall not affect the validity of any action
taken at such meeting.

<PAGE>

j. Subsection 5(g) of this Article II shall be operative only at such
time(s) as the Corporation shall have six (6) or more shareholders.

Section 6. Quorum.

a. At any meeting of the shareholders of the Corporation, the presence, in
person or by proxy, of shareholders owning a majority of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote
thereat shall be necessary to constitute a quorum for the transaction of any
business. If a quorum is present the affirmative vote of a majority of the
shares represented at such meeting and entitled to vote on the subject matter
shall be the act of the shareholders. If there shall not be a quorum at any
meeting of the shareholders of the Corporation, then the holders of a majority
of the shares of the capital stock of the Corporation who shall be present at
such meeting, in person or by proxy, may adjourn such meeting from time to time
until holders of a majority of the shares of the capital stock shall attend. At
any such adjourned meeting at which a quorum shall be present, any business may
be transacted which might have been transacted at the meeting as originally
scheduled.

b. The shareholders at a duly organized meeting having a quorum may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.

Section 7. Presiding Officer; Order of Business.

a. Meetings of the shareholders shall be presided over by the Chairman of
the Board, or, if he is not present, by the President or, if he is not present,
by a Vice President or, if none of the Chairman of the Board, the President, or
a Vice President is present, the meeting shall be presided over by a Chairman to
be chosen by a plurality of the shareholders entitled to vote at the meeting who
are present, in person or by proxy. The presiding officer of any meeting of the
shareholders may delegate the duties and obligations of the presiding officer of
the meeting as he sees fit.

b. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary shall act as Secretary of every meeting of shareholders, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose any person present to act as Secretary of
the meeting.

c. The order of business shall be as follows:

1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous shareholders meeting
or a Waiver thereof.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Regular and miscellaneous business.
8. Special matters.
9. Adjournment.

<PAGE>

d. Notwithstanding the provisions of Article II, Section 7, Subsection c,
the order and topics of business to be transacted at any meeting shall be
determined by the presiding officer of the meeting in his sole discretion. In no
event shall any variation in the order of business or additions and deletions
from the order of business as specified in Article II, Section 7, Subsection c,
invalidate any actions properly taken at any meeting.

Section 8. Voting.

a. Unless otherwise provided for in the Certificate of Incorporation, each
shareholder shall be entitled, at each meeting and upon each proposal to be
voted upon, to one vote for each share of voting stock recorded in his name on
the books of the Corporation on the record date fixed as provided for in Article
II, Section 5.

b. The presiding officer at any meeting of the shareholders shall have the
power to determine the method and means of voting when any matter is to be voted
upon. The method and means of voting may include, but shall not be limited to,
vote by ballot, vote by hand or vote by voice. However, no method of voting may
be adopted which fails to take account of any shareholder's right to vote by
proxy as provided for in Section 10 of this Article II. In no event may any
method of voting be adopted which would prejudice the outcome of the vote.

Section 9. Action Without Meeting.

a. Any action required to be taken at any annual or special meeting of the
Corporation, or any action which may be taken at any annual or special meeting
of such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. If any class of shares is entitled to vote
thereon as a class, such written consent shall be required of the holders of a
majority of the shares of each class of shares entitled to vote thereon.

b. Within ten (10) days after obtaining such authorization by written
consent, notice must by given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidation or sale or
exchange of assets for which dissenters' rights are provided under the Colorado
Business Corporation Act, the notice shall contain a clear statement of the
right of the shareholders dissenting therefrom to be paid the fair value of
their shares upon compliance with further provisions of the Colorado Business
Corporation Act regarding the rights of dissenting shareholders.

c. In the event that the action to which the shareholders'
consent is such as would have required the filing of a certificate
under the Colorado Business Corporation Act if such action had been

<PAGE>

voted on by shareholders at a meeting thereof, the certificate filed under such
other section shall state that written consent has been given in accordance with
the provisions of this Article II, Section 9.

Section 10. Proxies.

a. Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting, or his duly authorized
attorney-in-fact may authorize another person or persons to act for him by
proxy.

b. Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise provided in
this Article II, Section 10.

c. The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjunction of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.

d. Except when other provisions shall have been made by written agreement
between parties, the record holder of shares held as pledges or otherwise as
security or which belong to another, shall issue to the pledgor or to such owner
of such shares, upon demand therefor and payment of necessary expenses thereof,
a proxy to vote or take other action thereon.

e. A proxy which states that it is irrevocable when it is held by any of
the following or a nominee of any of the following: (I) a pledgee; (II) a person
who has purchased or agreed to purchase the shares; (III) a creditor or
creditors of the Corporation who extend credit to the Corporation in
consideration of the proxy, if the proxy states that it was given in
consideration of such extension or continuation of credit, the amount thereof,
and the name of the person extending or continuing credit; (IV) a person who has
contracted to perform services as an officer of the Corporation, if a proxy is
required by the contract of employment, if the proxy states that it was given in
consideration of such contract of employment and states the name of the employee
and the period of employment contracted for; and (V) a person designated by or
under an agreement as provided in Article XI hereof.

f. Notwithstanding a provision in a proxy stating that it is irrevocable,
the proxy becomes revocable after the pledge is redeemed, or the debt of the
Corporation is paid, or the period of employment provided for in the contract of
employment has terminated, or the agreement under Article XII hereof, has
terminated and, in a case provided for in Subsection 10(e)(III) or Subsection
10(e)(IV) of this Article II becomes irrevocable three years after the date of
the proxy or at the end of the period, if any, specified therein, whichever
period is less, unless the period

<PAGE>

of irrevocability is renewed from time to time by the execution of a new
irrevocable proxy as provided in this Article II, Section 10. This Subsection
10(f) does not affect the duration of a proxy under Subsection 10(b) of this
Article II.

g. A proxy may be revoked, notwithstanding a provision making it
irrevocable, by a purchaser of shares without knowledge of the existence of the
provision unless the existence of the proxy and its irrevocability is noted
conspicuously on the face or back of the certificate representing such shares.

h. If a proxy for the same shares confers authority upon two (2) or more
persons and does not otherwise provide a majority of such persons present at the
meeting, or if only one is present,then that one may exercise all the powers
conferred by the proxy. If the proxy holders present at the meeting are equally
divided as to the right and manner of voting in any particular case, the voting
of such shares shall be prorated.

I. If a proxy expressly so provides, any proxy holder may
appoint in writing a substitute to act in his place.

Section 11. Voting of Shares by Shareholders.

a. Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the Bylaws of the
Corporate shareholder; or, in the absence of any applicable designation may be
made by presentation of a certified copy of the Bylaws or other instrument of
the corporate shareholder. In the absence of any such designation, or in case of
conflicting designation by the corporate shareholder, the Chairman of the Board,
President, and vice president, secretary and treasurer of the corporate
shareholder, in that order shall be presumed to possess authority to vote such
shares.

b. Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.

c. Shares standing in the name of a receiver may be voted by such receiver.
Shares held by or under the control of a receiver but not standing in the name
of such receiver, may be voted by such receiver without the transfer thereof
into his name if authority to do so is contained in an appropriate order of the
court by which such receiver was appointed.

d. A shareholder whose shares are pledged shall be entitled to vote such
shares have been transferred into the name of the pledge.

e. Shares of the capital stock of the Corporation belonging to the
Corporation or held by it in a fiduciary capacity shall not be voted, directly
or indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares.
Article III
Directors

<PAGE>

Section 1. Board of Directors; Exercise of Corporate Powers.

a. All corporate powers shall be managed under the direction of the Board
of Directors except as may be otherwise provided in the Articles of
Incorporation. If any such provision is made in the Articles of Incorporation,
the powers and duties conferred or imposed upon the Board of Directors shall be
exercised or performed to such extent and by such person or persons as shall be
provided in the Articles of Incorporation.

b. Directors need to be residents of the state of
incorporation unless the Articles of Incorporation so require.

c. The Board of Directors shall have the authority to fix the
compensation of Directors unless otherwise provided in the Articles
of Incorporation.

d. A Director shall perform his duties as a Director, including his duties
as a member of any committee of the Board upon which he may serve, in good
faith, in a manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.

e. In performing his duties, a Director shall be entitled to rely on
information, opinions, reports or statements, including financial data, in each
case prepared or presented by: (I) one or more officers or employees of the
Corporation whom the Director reasonably believes to be reliable and competent
in the matters presented; (II) counsel, public accountants or other persons as
to matters which the Director reasonably believes to be within such persons'
professional or expert competence; or (III) a committee of the Board upon which
he does not serve, duly designated in accordance with a provision of the
Articles of Incorporation or the Bylaws, as to matters within its designated
authority, which committee the Director reasonably believes to merit confidence.

f. A Director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described in Subsection 1(e) of this Article III to be unwarranted.

g. A person who performs his duties in compliance with this Article III,
Section 1 shall have no liability by reason of being or having been a Director
of the Corporation.

h. A Director of the Corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken consents thereto
unless he votes against such action or abstains from voting in respect thereto
because of an asserted conflict of interest.

Section 2. Number; Election; Classification of Directors;
Vacancies.

a. The Board of Directors of this Corporation shall consist of not less
than three (3) nor more than seven (7) members, unless the number of
shareholders is less than three, in which the Corporation shall have as many
directors as there are shareholders.

<PAGE>

The number of directors shall be fixed by the initial Board of Directors. The
number of directors may be increased from time to time by the Board of
Directors, but no decrease shall have the effect of shortening the term of any
incumbent director.

b. Each person named in the Articles of Incorporation as a member of the
initial Board of Directors, shall hold office until the first annual meeting of
shareholders, and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.

c. At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting, except in case of the classification of directors as
permitted by the Colorado Business Corporation Act. Each director shall hold
office for the term for which he is elected and until his successor shall have
been elected and qualified or until his earlier resignation, removal from office
or death.

d. The shareholders, by amendment to these Bylaws, may provide that the
directors by divided into not more then four classes, as nearly equal in number
as possible, whose terms of offices shall respectively expire at different
times, but no such term shall continue longer than four (4) years, and at least
one-fifth (1/5) in number of the directors shall be elected annually.

e. If directors are classified and the number of directors is thereafter
changed, any increase or decrease in directorships shall be so apportioned among
the classes as to make all classes as nearly equal in number as possible.

f. Any vacancy occurring in the Board of Directors including any vacancy
created by reason of an increase in the number of directors, may be filled by
the affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors. A director elected to fill a vacancy shall
hold office only until the next election of directors by the shareholders.

Section 3. Removal of Directors.

a. At a meeting of shareholders called expressly for that purpose,
directors may be removed in the manner provided in this Article III, Section 3.
Any director or the entire Board of Directors may by removed, with or without
cause, by a vote of the holders of a majority of the shares then entitled to
vote at an election of directors.

b. If the Corporation has cumulative voting, if less than the entire Board
is to be removed, no one of the directors may be removed if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which he is a member.

Section 4. Director Quorum and Voting.

a. A majority of the number of directors fixed in the manner

<PAGE>

provided in these Bylaws shall constitute a quorum for the transaction of
business unless a greater number if required elsewhere in these Bylaws.

b. A majority of the members of an Executive Committee or other committee
shall constitute a quorum for the transaction of business at any meeting of such
Executive Committee of other committee.

c. The act of the majority of the directors present at a
Board meeting at which a quorum is present shall be the act of the
Board of Directors.

d. The act of the majority of the members of an Executive Committee present
at an Executive Committee meeting at which a quorum is present shall be the act
of the Executive Committee.

e. The act of a majority of the members of any other
committee present at a committee meeting at which a quorum is
present shall be the act of the committee.

Section 5. Director Conflicts of Interest.

a. No contract or other transaction between this Corporation and one or
more of its directors or any other Corporation, firm, association or entity in
which one or more of its directors are directors or officers or are financially
interested, shall be either void or voidable because of a relationship or
interest or because such director or directors are present at the meeting of the
Board of Directors or a committee thereof which authorizes, approves or ratifies
such contract or transaction or because his or their votes are counted for such
purpose, if:

(I) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or

(ii) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or

(iii) The contract or transaction is fair and reasonable as
to the Corporation at the time it is authorized by the Board, a
committee, or the shareholders.

b. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.

Section 6. Executive and Other Committees; Designation;
Authority.

a. The Board of Directors, by resolution adopted by a
majority of the full Board of Directors, may designate from among
its members an Executive Committee and one or more other committees

<PAGE>

each of which, to the extent provided in such resolution or in the Articles of
Incorporation or these Bylaws, shall have and may exercise all the authority of
the Board of Directors, except that no such committee shall have the authority
to: (I) approve or recommend to shareholders actions or proposals required by
the Colorado Business Corporation Act to be approved by shareholders; (II)
designate candidates for the office of director for purposes of proxy
solicitation or otherwise; (III) fill vacancies on the Board of Directors or any
committee thereof; (IV) amend the Bylaws; or (V) authorize or approve the
issuance or sale of, or any contract to issue or sell, shares or designate the
terms of a series of class of shares, unless the Board of Directors, having
acted regarding general authorization for the issuance or sale of shares, or any
contract therefor, and, in the case of a series, the designation thereof, has
specified a general formula or method by resolution or by adoption of a stock
option or other plan, authorized a committee to fix the terms upon which such
shares may be issued or sold, including, without limitation, the price, the rate
or manner of payment of dividends, provisions for redemption, sinking fund,
conversion, and voting preferential rights, and provisions for other features of
a class of shares, or a series of class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Secretary of State under the Colorado Business Corporation Act.

b. The Board, by resolution adopted in accordance with Article III,
Subsection 6(a) may designate one or more directors as alternate members of any
such committee, who may act in the place and stead of any absent member or
members at any meeting of such committee.

c. Neither the designation of any such committee, the delegation thereto of
authority, nor action by such committee pursuant to such authority shall alone
constitute compliance by any member of the Board of Directors, not a member of
the committee in question, with his responsibility to act in good faith, in a
manner he reasonably believes to be in the best interests of the Corporation,
and with such care as an ordinarily prudent person in a like position would use
under similar circumstances.

Section 7. Place, Time, Notice, and Call of Directors'
Meetings.

a. Meetings of the Board of Directors, regular or special,
may be held either within or without this state.

b. A regular meeting of the Board of Directors of the Corporation shall be
held for the election of officers of the Corporation and for the transaction of
such other business as may come before such meeting as promptly as practicable
after the annual meeting of the shareholders of this Corporation without the
necessity of other notice than this Bylaw. Other regular meetings of the Board
of Directors of the Corporation may from time to time resolve without other
notice than such resolution. Special meetings of the Board of Directors may be
held at any time upon call of the Chairman of the Board or the President or a
majority of the Directors of the Corporation, at such time and at such place as
shall be specified in the call thereof. Notice of any special

<PAGE>

meeting of the Board of Directors must be given at least two (2) days prior
thereto, if by written notice delivered personally; or at least five (5) days
prior thereto, if mailed; or at least two (2) days prior thereto, if by
telegram; or at least two (2) days prior thereto, if by telephone. If such
notice is given by mail, such notice shall be deemed to have been delivered when
deposited with the United States Postal Service addressed to the business
address of such director with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed delivered when the telegram is delivered
to the telegraph company. If notice is given by telephone, such notice shall be
deemed delivered when the call is completed.

c. Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.

d. Neither the business to be transacted at, nor the purpose of any regular
or special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.

e. A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.

f. Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.

Section 8. Action by Directors Without a Meeting.

Any action required by the Colorado Business Corporation Act to be taken at
a meeting of the directors of the Corporation, or a committee thereof, may be
taken without a meeting if a consent in writing, setting forth the action so to
be taken, signed by all of the directors, or all of the members of the
committee, as the case may be, is filed in the minutes of the proceedings of the
Board or of the committee. Such consent shall have the same effect as a
unanimous vote.

Section 9. Compensation.

The directors and members of the Executive and any other committee of the
Board of Directors shall be entitled to such reasonable compensation for their
services and on such basis as shall be fixed from time to time by resolution of
the Board of

<PAGE>

Directors. The Board of Directors and members of any committee of the Board of
Directors shall be entitled to reimbursement for any reasonable expenses
incurred in attending any Board or committee meeting. Any director receiving
compensation under this section shall not be prevented from serving the
Corporation in any other capacity and shall not be prohibited from receiving
reasonable compensation for such other services.

Section 10. Resignation.

Any Director of the Corporation may resign at any time without acceptance
by the Corporation. Such resignation shall be in writing and may provide that
such resignation shall take effect immediately or on any future date stated in
such notice.

Section 11. Removal.

Any Director of the Corporation may be removed for cause by a majority vote
of the other members of the Board of Directors as then constituted or with or
without cause by the vote of the holders of a majority of the outstanding shares
of capital stock shareholders of the Corporation called for such purpose.

Section 12. Vacancies.

In the event that a vacancy shall occur on the Board of Directors of the
Corporation whether because of death, resignation, removal, an increase in the
number of directors of any other reason, such vacancy may be filled by the vote
of a majority of the remaining directors of the Corporation even though such
remaining directors represent less than a quorum. An increase in the number of
directors shall create vacancies for the purpose of this section. A director of
the Corporation elected to fill a vacancy shall hold office for the unexpired
term of his predecessor, or in the case of an increase in the number of
directors, until the election and qualification of directors at the next annual
meeting of the shareholders.

ARTICLE IV
Officers

Section 1. Election; Number; Terms of Office.

a. The officers of the Corporation shall consist of a Chairman of the
Board, a President, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors at such time and in such manner as may be prescribed
by these Bylaws. Such other officers and assistant officers and agents as may be
deemed necessary may be elected or appointed by the Board of Directors.

b. All officers and agents, as between themselves and the Corporation,
shall have such authority and perform such duties in the management of the
Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.

c. Any two (2) or more offices may be held by the same person
except the offices of President and Secretary.

<PAGE>

d. A failure to elect a Chairman of the Board, President, a
Secretary and a Treasurer shall not affect the existence of the
Corporation.

Section 2. Removal.

An officer of the Corporation shall hold office until the election and
qualification of his successor; however, any officer of the Corporation may be
removed from office by the Board of Directors whenever in its judgement the best
interests of the Corporation will be served thereby. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of any officer shall not of itself create any contract
right to employment or compensation.

Section 3. Vacancies.

Any vacancy in any office from any cause may be filled for the unexpired
portion of the term of such office by the Board of Directors.

Section 4. Powers and Duties.

a. The Chairman of the Board shall be the Chief Executive Officer of the
Corporation. The Chairman of the Board shall preside at all meetings of the
shareholders and of the Board of Directors. Except where by law the signature of
the President is required or unless the Board of Directors shall rule otherwise,
the Chairman of the Board shall possess the same power as the President to sign
all certificates, contracts and other instruments of the Corporation which may
be authorized by the Board of Directors. Unless a Chairman of the Board is
specifically elected, the President shall be deemed to be the Chairman of the
Board.

b. The President shall be the Chief Operating Officer of the Corporation.
He shall be responsible for the general day-to-day supervision of the business
and affairs of the Corporation. He shall sign or countersign all certificates,
contracts or other instruments of the Corporation as authorized by the Board of
the Directors. He may, but need not, be a member of the Board of Directors. In
the absence of the Chairman of the Board, the President shall be the Chief
Executive Officer of the Corporation and shall preside at all meetings of the
shareholders and the Board of Directors. He shall make reports to the Board of
Directors and shareholders. He shall perform such other duties as are incident
to his office or are properly required of him by the Board of Directors. The
Board of Directors will at all times retain the power to expressly delegate the
duties of the President to any other officer of the Corporation.

c. The Vice-President(s), if any, in the order designated by the Board of
Directors, shall exercise the functions of the President during the absence,
disability, death, or refusal to act of the President. During the time that any
Vice-President is properly exercising the functions of the President. Each
Vice-President shall have such other duties as are assigned to him from time to
time by the Board of Directors or by the President of the Corporation.

<PAGE>

d. The Secretary of the Corporation shall keep the minutes of the meetings
of the shareholders of the Corporation and, if so requested, the Secretary shall
keep the minutes of the meetings of the Board of Directors of the Corporation.
The Secretary shall be the custodian of the minute books of the Corporation and
such other books and records of the Corporation as the Board of Directors of the
Corporation may direct. The Secretary shall make or cause to be made all proper
entries in all corporate books that the Board of Directors of the Corporation
may direct. The Secretary shall have the general responsibility for maintaining
the stock transfer books of the Corporation, or of supervising the maintenance
of the stock transfer books of the Corporation by the transfer agent, if any, of
the Corporation. The Secretary shall be the custodian of the corporate seal of
the Corporation and shall affix the corporate seal of the Corporation on
contracts and other instruments as the Board of Directors of the Corporation may
direct. The Secretary shall perform such other duties as are assigned to him
from time to time by the Board of Directors or the President of the Corporation.

e. The Treasurer of the Corporation shall have custody of all funds and
securities owned by the Corporation. The Treasurer shall cause to be entered
regularly in the proper books of account of the Corporation full and accurate
accounts of the receipts and disbursements of the Corporation. The Treasurer of
the Corporation shall render a statement of cash, financial and other accounts
of the Corporation whenever he is directed to render such a statement by the
Board of Directors or by the President of the Corporation. The Treasurer shall
at all reasonable times make available the Corporation's books and financial
accounts to any Director of the Corporation during normal business hours. The
Treasurer shall perform all other acts incident to the office of the Treasurer
of the Corporation, and he shall have such other duties as are assigned to him
from time to time by the Board of Directors or the President of the Corporation.

f. Other subordinate or assistant officers appointed by the Board of
Directors or by the President, if such authority is delegated to him by the
Board of Directors, shall exercise such powers and perform such duties as may be
delegated to them by the Board of Directors or by the President, as the case may
be.

g. In case of the absence or disability of any officer of the Corporation
and of any person authorized to act in his place during such period of absence
or disability, the Board of Directors may from time to time delegate the powers
and duties of such officer to any other officer or any director or any other
person whom it may select.

Section 5. Salaries

The salaries of all Officers of the Corporation shall be fixed by the Board
of Directors. No officer shall be ineligible to receive such salary by reason of
the fact that he is also a Director of the Corporation and receiving
compensation therefor.

ARTICLE V
Loans to Employees and Officers:
Guaranty of Obligations of Employees and Officers

<PAGE>

This Corporation may lend money to, guarantee any obligation of, or
otherwise assist any officer or other employee of the Corporation or of a
subsidiary, including any officer or employee who is a Director of the
Corporation or of a subsidiary, including any officer or employee who is a
Director of the Corporation or of a subsidiary, whenever, in the judgement of
the Directors, such loan, guaranty or assistance may reasonably be expected to
benefit the Corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the Board
of Directors shall approve including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this Article shall be deemed to deny, limit
or restrict the powers of guaranty or warranty of this Corporation at common law
or under any statute.

ARTICLE VI
STOCK CERTIFICATES; VOTING TRUSTS; TRANSFERS

Section 1. Certificates Representing Shares.

a. Every holder of shares in this Corporation shall be entitled to one or
more certificates, representing all shares to which he is entitled and such
certificates shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary of the Corporation and may be sealed with
the seal of the Corporation or a facsimile thereof. The signatures of the
President or Vice President and the Secretary or Assistant Secretary may be
facsimiles if the certificate is manually signed on behalf of a transfer agent
or a registrar, other than the Corporation itself or an employee of the
Corporation. In case any officer who signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such officer at the
date of its issuance.

b. Each certificate representing shares shall state upon the face thereof:
(I) the name of the Corporation; (II) that the Corporation is organized under
the laws of this state; (III) the name of the person or persons to whom issued;
(IV) the number and class of shares, and the designation of the series, if any,
which such certificate represents; and (V) the par value of each share
represented by such certificate, or a statement that the shares are without par
value.

c. No certificate shall be issued for any shares until such
shares are fully paid.

Section 2. Transfer Book.

The Corporation shall keep at its registered office or principal place of
business or in the office of its transfer agent or registrar, a book (or books
where more than one kind, class, or series of stock is outstanding) to be known
as the Stock Book, containing the names , alphabetically arranged, addresses and
Social Security numbers of every shareholder, and the number of shares of each
kind, class or series of stock held of record. Where the Stock Book is kept in
the office of the transfer agent, the Corporation shall keep at its office in
the State of Colorado copies of the stock lists shall show the current status of
the ownership of shares of the Corporation provided, if the transfer

<PAGE>

agent of the Corporation be located elsewhere, a reasonable time shall be
allowed for transit or mail.

Section 3. Transfer of Shares.

a. The name(s) and address(s) of the person(s) to whom shares of stock of
this Corporation are issued, shall be entered on the Stock Transfer Books of the
Corporation, with the number of shares and date of issuance.

b. transfer of shares of the Corporation shall be made on the Stock
Transfer Books of the Corporation by the Secretary or the transfer agent, only
when the holder of record thereof or the legal representative of such holder of
record or the attorney-in-fact of such holder of record, authorized by power of
attorney duly executed and filed with the secretary or transfer agent of the
Corporation, shall surrender the Certificate representing such shares for
cancellation. Lost, destroyed or stolen Stock Certificates shall be replaced
pursuant to Section 5 of this Article VI.

c. The person or persons in whose names shares stand on the books of the
Corporation shall be deemed by the Corporation to be the owner of such shares
for all purposes, except as otherwise provided pursuant to Section 10 and 11 of
Article II, or Section 4 of this Article VI.

Section 4. Voting Trusts.

a. Any number of shareholders of the Corporation may create a voting trust
for the purpose of conferring upon a trustee or trustees the right to vote or
otherwise represent their shares, for a period not to exceed ten (10) years, by:
(I) entering into a written voting trust; (II) depositing a counterpart of the
agreement with the Corporation at its registered office; and (III) transferring
their shares to such trustee or trustees for the purposes of this Agreement.
Prior to the recording of the Agreement, the shareholder concerned shall tender
the stock certificate(s) described therein to the corporate secretary who shall
note on each certificate:

"THIS CERTIFICATE is subject to the provisions of a voting
trust agreement dated _______________, recorded in Minute Book
__________________, of the Corporation.
----------------------------
Secretary"

b. Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their share
in trust. Such trustee or trustees shall keep a record of the holders of the
voting trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class of
the shares in respect of which the voting trust certificates held by each are
issued, and shall deposit a copy of such record with the Corporation at its
registered office.

c. The counterpart of the voting trust agreement and the copy
of such record so deposited with the Corporation shall be subject

<PAGE>

to the same right of examination by a shareholder of the Corporation, in person
or by agent or attorney, as are the books and records of the Corporation, and
such counterpart and such copy of such record shall be subject to examination by
any holder of record of voting trust certificates either in person or by agent
or attorney, at any reasonable time for any proper purpose.

d. At any time before the expiration of a voting trust agreement as
originally fixed or as extended one or more times under this Article VI,
Subsection 4(d) one or more holders of voting trust certificates may, by
agreement in writing, extend the duration of such voting trust agreement,
nominating the same or substitute trustee or trustees, for an additional period
not exceeding ten (10) years. Such extension agreement shall not affect the
rights or obligations of persons not parties to the agreement, and such persons
shall be entitled to remove their shares from the trust and promptly to have
their stock certificates reissued upon the expiration date of the original term
of the voting trust agreement. The extension agreement shall in every respect
comply with and be subject to all the provisions of this Article VI, Section 4
applicable to the original voting trust agreement except that the ten (10) year
maximum period of duration shall commence on the date of adoption of the
extension agreement.

e. The trustee under the terms of the agreements entered into under the
provisions of this Article VI, Section 4 shall not acquire the legal title to
the shares but shall be vested only with the legal right and title to the voting
power which is incident to the ownership of the shares.

Section 5. Lost, Destroyed, or Stolen Certificates.

No certificate representing shares of the stock in the Corporation shall be
issued in place of any Certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of Directors,
of such loss, destruction or theft, and, if the Board of Directors so requires,
upon the furnishing of an indemnity bond in such amount (but not to exceed twice
the fair market value of the shares represented by the Certificate) and with
such terms and with such surety as the Board of Directors may, in its
discretion, require.

ARTICLE VII
Books and Records

a. The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders, Board of
Directors and committees of Directors.

b. Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.

c. Any person who shall have been a holder of a record of one quarter of
one percent of all shares or of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of, or
the holder of record of voting trust certificates for, at least five (5%)
percent of the outstanding shares of any class or series of the Corporation,
upon

<PAGE>

written demand stating the purpose thereof, shall have the right to examine, in
person or by agent or attorney, at any reasonable time or times, for any proper
purpose, its relevant books and records of account, minutes and record of
shareholders and to make extracts therefrom.

d. No shareholder who within two (2) years has sold or offered for sale any
list of shareholders or of holders of voting trust certificates for shares of
this Corporation or any other Corporation; has aided or abetted any person in
procuring any list of shareholders or of holders of voting trust certificates
for any such purpose; or has improperly used any information secured through any
prior examination of the books and records of account, minutes, or record of
shareholders or of holders of voting trust certificates for shares of the
Corporation or any other Corporation; shall be entitled to examine the documents
and records of the Corporation as provided in Subsection c of this Article VII.
No shareholder who does not act in good faith or for a proper purpose in making
his demand shall be entitled to examine the documents and records of the
Corporation as provided in Subsection c of this Article VII.

e. Unless modified by resolution of the shareholders, this Corporation
shall prepare not later than four (4) months after the close of each fiscal
year:

(I) A balance sheet showing in reasonable detail the financial
conditions of the Corporation as of the date of its fiscal year.

(II) A profit and loss statement showing the results of its operation
during its fiscal year.

f. Upon the written request of any shareholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to such
shareholder or holder of voting trust certificates a copy of its most recent
balance sheet and profit and loss statement.

g. Such balance sheets and profit and loss statements shall be filed and
kept for at least five (5) years in the registered office of the Corporation in
this state and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates.

ARTICLE VII
Dividends

The Board of Directors of the Corporation may, from time to time, declare
and the Corporation may pay dividends on its shares in cash, property or its own
shares, except when the Corporation in insolvent or when the payment thereof
would render the Corporation insolvent subject to the following provisions:

a. Dividends in cash or property may be declared and paid, except as
otherwise provided in this Article VIII, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
however arising, but each dividend paid out of capital surplus shall be
identified as a distribution of capital

<PAGE>

surplus, and the amount per share paid from such capital surplus shall be
disclosed to the shareholders receiving the same concurrently with the
distribution.

b. Dividends may be declared and paid in the Corporation's
treasury shares.

c. Dividends may be declared and paid in the Corporation's authorized but
unissued shares out of any unreserved and unrestricted surplus of the
Corporation upon the following conditions:

(I) If a dividend is payable in the Corporation's own shares having a
par value, such shares shall be issued at not less than the par value thereof
and there shall be transferred to stated capital at the time such dividend is
paid an amount of surplus of the Corporation upon the following conditions:

(II) If a dividend is payable in the Corporation's own shares without
par value, such shares shall be issued at such stated value as shall be fixed by
the Board of Directors by resolution adopted at the time such dividend is
declared, and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus equal to the aggregate stated value so
fixed in respect of such shares; and the amount per share so transferred to
stated capital shall be disclosed to the shareholders receiving such dividend
concurrently with the payment thereof.

d. No dividend payable in shares of any class shall be paid to the holders
of shares of any other class unless the Articles of Incorporation so provide or
such payment is authorized by the affirmative vote or written consent of the
holders of at least a majority of the outstanding shares of the class in which
the payment is to be made.

e. A split up or division of the issued shares of any class into a greater
number of shares of the same class without increasing the stated capital of the
Corporation shall not be construed to be a stock dividend within the meaning of
this Article VIII.

ARTICLE IX
Indemnification

Section 1. Action, etc. Other Than by or in the Right of the
Corporation.

The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation, (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or that, being or having been such a director, officer, employee or
agent, he is or was serving at the request of the Corporation as a director,
officer, employee, or trustee or agent of another corporation, partnership,
joint venture, trust or

<PAGE>

other enterprise (all such persons being referred to hereafter as an "Agent"),
against expenses (including attorney's fees), judgements, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, or any appeal therein, if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful. The
termination of any action, suit or proceeding -- whether by judgement, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
- --shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, that such person had reasonable cause to believe that his conduct
was unlawful.

Section 2. Action, etc., by or in the Right of the Corporation.

The Corporation shall indemnify any person who was or is a party or is
threatened to by made a party to any threatened, pending or completed judicial
action or suit brought by or in the right of the Corporation to procure a
judgement in its favor by reason of the fact that he is or was an Agent (as
defined above) against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense, settlement or appeal
of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for gross
negligence or willful misconduct in the performance of his or her duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.

Section 3. Determination of Right of Indemnification.

Any indemnification under Section 1 or 2 (unless ordered by a court) shall
be made by the Corporation unless a determination is reasonably and promptly
made (I) by the Board by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (II) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (III) by the
stock holders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.

Section 4. Indemnification Against Expenses of Successful
Party.

Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including, without
limitation, the dismissal of an

<PAGE>

action without prejudice or the settlement of an action without admission of
liability, in defense of any proceeding or in defense of any claim, issue or
matter therein, or on appeal from any such proceeding, action, claim or matter,
such Agent shall be indemnified against all expenses incurred in connection
therewith.

Section 5. Advances of Expenses.

Except as limited by Section 6 of this Article, costs, charges and expenses
(including attorney's fees) incurred in any action, suit, proceeding or
investigation or any appeal therefrom shall be paid by the Corporation in
advance of the final disposition of such matter, if the Agent shall undertake to
repay such amount in the event that it is ultimately determined, as provided
herein, that such person is not entitled to indemnification. Notwithstanding the
foregoing, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board of Directors or if a majority vote of
a quorum of disinterested directors cannot be obtained, then by independent
legal counsel in a written opinion, that, based upon the facts known to the
Board or counsel at the time such determination is made, such person acted in
bad faith and in a manner that such person did not believe to be in or not
opposed to the best interest of the Corporation, or, with respect to any
criminal proceeding, that such person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any advance be made in
instances where the Board or independent legal counsel reasonably determines
that such person deliberately breached his duty to the Corporation or its
shareholders.

Section 6. Right of Agent to Indemnification Upon Application;
Procedure Upon Application.

Any indemnification under Sections 1, 2 and 4 or advance under Section 5 of
this Article, shall be made promptly, and in any event within ninety (90) days,
upon the written request of the Agent, unless with respect to applications under
Sections 1, 2 or 5, a determination is reasonably and promptly made by the Board
of Directors by a majority vote of a quorum of disinterested directors that such
Agent acted in a manner set forth in such Sections as to justify the
Corporation's not indemnifying or making an advance to the Agent. In the event
no quorum of disinterested directors is obtainable, the Board of Directors shall
promptly direct that independent legal counsel shall decide whether the Agent
acted in the manner set forth in such Sections as to justify the Corporation's
not indemnifying or making an advance to the Agent. The right to indemnification
or advances as granted by this Article shall be enforceable by the Agent in any
court of competent jurisdiction, if the Board or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's costs and expenses incurred in
connection with successfully establishing his right to indemnification, in whole
or in part, in any such proceeding shall also be indemnified by the Corporation.

Section 7. Contribution.

In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this

<PAGE>

Article is held by a court of competent jurisdiction to be unavailable to an
indemnitee in whole or in part, the Corporation shall, in such an event, after
taking into account, among other things, contributions by other directors and
officers of the Corporation pursuant to indemnification agreements or otherwise,
and, in the absence of personal enrichment, acts of intentional fraud or
dishonesty or criminal conduct on the part of the Agent, contribute to the
payment of Agent's losses to the extent that, after other contributions are
taken into account, such losses exceed: (I) in the case of a director of the
Corporation or any of its subsidiaries who is not an officer of the Corporation
or any of such subsidiaries, the amount of fees paid to him for serving as a
director during the 12 months preceding the commencement of the suit, proceeding
or investigation; or (II) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (I) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement or any of its subsidiaries, 5% of the
aggregate cash compensation paid to such officer of service in such office(s)
during the 12 months preceding the commencement of such suit, proceeding or
investigation.

Section 8. Other Rights and Remedies.

The indemnification provided by this Article shall not be deemed exclusive
of, and shall not affect, any other rights to which an Agent seeking
indemnification may be entitled under any law, Bylaw, or charter provision,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be an
Agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. All rights to indemnification under this Article shall be
deemed to be provided by a contract between the Corporation and the Agent who
serves in such capacity at any time while these Bylaws and other relevant
provisions of the general Corporation law and other applicable law, if any are
in effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing.

Section 9. Insurance.

Upon resolution passed by the Board, the Corporation may purchase and
maintain insurance on behalf of any person who is or was an Agent against any
liability asserted against such person and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would have
the power to indemnify such person against such liability under the provisions
of this Article. The Corporation may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.

Section 10. Constituent Corporation.

For the purpose of this Article, references to the "Corporation"
include all constituent corporations absorbed in a consolidation or

<PAGE>

merger as well as the resulting or surviving corporation, so that any person who
is or was a director, officer, employee, agent or trustee, of such a constituent
corporation or who, being or having been such a director, officer, employee,
agent or trustee, is or was serving at the request of such constituent
corporation as a director, officer, employee, agent or trustee of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving corporation as such person would if he had served the
resulting or surviving corporation in the same capacity.

Section 11. Other Enterprises, Fines and Serving at
Corporation's Request.

For purposes of this Article, reference to "other enterprise" in Sections 1
and 10 shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit plan;
and references to "serving at the request of the Corporation" shall include any
service by Agent as director, officer, employee, trustee or agent of the
Corporation which imposes duties on, or involves services by, such Agent with
respect to any employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article.

Section 12. Savings Clause.

If this Article or any portion thereof shall be invalidated on any ground
by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify each Agent as to expenses (including attorneys' fees), judgements,
fines and amounts paid in settlement with respect to any action, suit, appeal,
proceeding or investigation, whether civil, criminal or administrative, and
whether internal or external, including a grand jury proceeding and an action or
suit brought by or in the right of the Corporation, to the full extent permitted
by any applicable portion of this Article that shall not have been invalidated,
or by any other applicable law.

ARTICLE X
Amendment of Bylaws

a. The Board of Directors shall have the power to amend, alter, or repeal
these Bylaws, and to adopt new Bylaws, from time to time.

b. The shareholders of the Corporation, may, at any annual meeting of the
shareholders of the Corporation or at any meeting of the shareholders of the
Corporation called for the purpose of amending these Bylaws, amend, alter, or
repeal these Bylaws, from time to time.

c. The Board of Directors shall not have the authority to
adopt or amend any Bylaw if such new Bylaw of such amendment would
be inconsistent with any Bylaw previously adopted by the

<PAGE>

shareholders of the Corporation. The shareholders may prescribe in any Bylaw
made by them that such Bylaw shall not be altered, amended or repealed by the
Board of Directors.

ARTICLE XI
Shareholder Agreements

Unless the shares of this Corporation are listed on a national securities
exchange or are regularly quoted by licensed securities dealers and brokers, all
the shareholders of this Corporation may enter into agreements relating to any
phase of business and affairs of the Corporation and which may provide for,
among other things, the election of directors of the Corporation in a manner
determine without reference to the number of shares of capital stock of the
Corporation owned by its shareholders, the determination of management policy,
and division of profits. Such agreements may restrict the discretion of the
Board of Directors and its management of the business of the Corporation or may
treat the Corporation as if it were a partnership or may arrange the
relationships of the shareholders in a manner that would be appropriate only
among partners. In the event such agreement shall be consistent in whole or in
part with the Articles of Incorporation and/or Bylaws of the Corporation, the
terms of such agreement shall govern. Such agreement shall be binding upon any
transferee of shares of this corporation provided such transferee has actual
notice thereof or a legend referring to such agreement is noted on the face or
back of the certificate or certificates representing the shares transferred to
such transferee.

ARTICLE XII
Fiscal Year
The Fiscal Year of this Corporation shall be determined by the Board of
Directors.

Date:
Secretary

<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 25th day of November, 1996, and is effective as of its execution (the
"effective date") between POCOTOPAUG INVESTMENT, INC., a Florida for profit
corporation (the "Company"), and JOHN S. McAVOY (the "Employee").

WHEREAS, the Company is a Florida for profit corporation; and

WHEREAS, the Company was formed in August, 1995, by John S. McAvoy and
Danny L. Wey for the purpose of raising money for the development of a bottled
water and water treatment company; and

WHEREAS, it was and is the intent of the Company to obtain a corporate
shell and take the project to the public market for the trading of its common
stock; and

WHEREAS, John S. McAvoy and Danny L. Wey agreed, as equal partners in
Pocotopaug Investment, Inc., both before and after the formation of the Company,
that (i) the development of the Bottled water and water treatment publicly
trading company would be a five year project and (ii) that the rewards to them
would be realized from the long term appreciation of their common shares in the
public company; and

WHEREAS, representations regarding the long term commitment of John S.
McAvoy and Danny L. Wey were made to potential investors as inducements to the
investors to participate in the project; and

WHEREAS, it was the Company's and the Employee's intent that its
operations start in Pinellas County, Florida, and, thereafter, spread throughout
the State of Florida, the Southeast United States, and South and Central
America, including, but not limited, to Costa Rica; and

WHEREAS, John S. McAvoy has developed information and business
contacts for the development of the Company's project; and

WHEREAS, a reverse merger of Pocotopaug Investment, Inc., into a
Colorado corporate shell, known as Aqua Clara Bottling & Distribution, Inc., is
imminent; and

WHEREAS, the solicitation of subscription agreements from the Company's
investors and the filing of Section 504 documents with the resulting issuance of
publicly trading shares is to take place in the near future; and

WHEREAS, John S. McAvoy is desirous of being employed by the
Company, Pocotopaug Investment, Inc. ("PII") and its successor,
Aqua Clara Bottling & Distribution, Inc.; and

WHEREAS, the Company has agreed to hire John S. McAvoy upon
certain terms and conditions, one of which is the execution of the
Agreement by Employee; and

WHEREAS, John S. McAvoy is the Company's President and one of
its Directors; and

<PAGE>

WHEREAS, it is the intent of the Company that all officers and
management employees will execute an employment agreement as a condition of
their employment.

NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and Employment do hereby agree as follows:

1. Employment. The Company hereby employs the Employee as
President of Pocotopaug Investment, Inc., and its successor, Aqua
Clara Bottling & Distribution, Inc., and Employee hereby accepts
said employment, upon the terms and conditions hereinafter set
forth.

2. Authority and Power During Employment Period. The duties of Employee
shall be those of the President and shall be subject to the discretion and
direction of the Company's officers and directors. Employee shall devote full
attention to and render exclusive full time services to the Company and shall be
employed solely by the Company according to the terms of this Agreement.

3. Term. The term of the employment hereunder will commence
upon execution of this Agreement and shall continue for five (5)
years, unless i) the parties mutually agree in writing to alter or
amend the terms of the Agreement, or ii) one or goth of the Paries
exercise their rights, pursuant to Paragraph ten (10) herein, to
terminate this Agreement.

4. Compensation.
a. Salary. For all services rendered by Employee, pursuant to
the terms of this Agreement, and in consideration of the execution of this
Agreement by Employee, the Company shall pay Employee an initial starting salary
equal to that received by Danny L. Wey and, thereafter, as may be determined
from time to time by the Board of Directors to reasonably reflect employee's
then current value and contributions to the Company.

5. Benefits. Employee shall be entitled to participate in
the Company's benefit programs maintained by the Company for the
benefit of employees, in general, in accordance with and pursuant
to the terms of all such plans. Employee shall also be entitled to
receive any other benefits as may, from time to time, be awarded to
him by the Board of Directors.

6. Expenses. The Company shall reimburse Employee for all
authorized and reasonable expenses incurred by Employee during his
employment by the Company. Employee shall be reimbursed expenses
a reasonable time after submitting an expense report in the form
provided by and in compliance with the Company's policies.

7. Covenant Not to Compete and Non-Disclosure of
Information.
a. Covenant Not to Compete. Employee acknowledges and
recognizes the highly competitive nature of Company's business, and that the
goodwill, continued patronage, information and business contacts, including
clients, constitute a substantial asset of the Company having been acquired
through considerable time, money and effort. Accordingly, in consideration of
the execution of this Agreement, Employee agrees to the following:

<PAGE>

ii. During the Restrictive Period and within the Restricted Area,
Employee will not directly or indirectly compete with the Company by soliciting,
inducing or influencing any individuals having business or prospective
relationships with the Company to discontinue or reduce the extent of such
relationship with the Company, or to support any business ventures by Employee
in violation of this Agreement.

iii. During the Restrictive Period and within the Restrictive Area,
Employee will not (a) directly or indirectly recruit, solicit or otherwise
influence any employee or agent of the Company to discontinue such employment or
agency relationship with the Company, or (b) employ or seek to employ, or cause,
assist, or permit any business which competes directly or indirectly with the
Company to employ or seek to employ, any agent or employee of the Company.

iv. During the Restrictive period, Employee will not interfere with or
disrupt or attempt to disrupt any past, present or prospective relationship,
contractual or otherwise, between the Company and any customer, employee or
agent of the Company.

v. This covenant is a restrictive covenant and Employee has knowingly
and willingly granted this to the Company and that, further, the entire
Employment Agreement is contingent upon said covenant.

b. Non-Disclosure of Information. Employee acknowledges that
the Company's trade secrets, private or secret processes, methods and ideas, as
they exist from time to time, customer lists and information concerning the
Company's products, services, training methods, development, technical
information, marketing activities and procedures, credit and financial data
concerning the Company, access to and knowledge of the industry in which the
Company's business is and will be conducted, Employee agrees that all
Proprietary Information heretofore or in the future obtained by the Employee as
a result of the Employee's association with the Company shall be considered
confidential.

In recognition of this fact, Employee agrees that Employee will never
use or disclose any of such Proprietary Information for the Employee's own
purposes or for the benefit of any person or other entity or organization
(except the Company) under any circumstances, unless the Employee is compelled
by court order to disclose such Proprietary Information, or unless Employee
obtains prior written permission from the Company to disclose such Proprietary
Information.
c. Documents. "Documents" shall mean all original
written, recorded or graphic matters whatsoever, and any and all

<PAGE>

copies thereof, including, but not limited to: paper; books; records; tangible
things; correspondence; communications; telex messages; memoranda; work-papers;
reports; affidavits; statements; summaries; analysis; evaluations; client
records and information; agreements; agendas; advertisements; instructions;
charges; manuals; brochures; publications; directories; industry lists;
schedules; price lists; client lists; statistical records; training manuals;
books of accounts; records and invoices reflecting business operations; E-mail;
computer printouts; computer disks; and all things similar to any of the
foregoing however denominated.

d. Restrictive Period. "Restrictive Period" shall be
deemed to be during the Term of this Agreement and any extension
thereof, and for a period of twenty-four (24) months following
termination of this Agreement, regardless of the reason(s) for
termination.

e. Restricted Area. "Restricted Area" shall be deemed
to mean within the State of Florida, Costa Rica, or any other
geographical locale that the Company is doing business in or has
plans to do business in, including Central America, the Caribbean,
and the Southeast United States.

It is understood by and between the Company and Employee that the
foregoing covenants in Paragraphs 7a. and 7b. are essential elements of this
Agreement, and that but for the agreement by employee to comply with such
covenants the Company would not have agreed to enter into this Agreement. Such
covenants by Employee shall be construed to be agreements independent of any
other provisions of this Agreement, and shall survive the termination of this
Agreement and Employees employment with the Company for a period of twenty-four
(24) months after the termination of Employee's employment or five (5) years
from the execution of this Agreement, whichever is longer. The existence of any
other claim or cause of action, whether predicated on any other provision of
this Agreement, or otherwise, as a result of the relationship between the
Parties, shall not constitute a defense to the enforcement of such covenants
against Employee.

f. Remedies.
i. Employee acknowledges and agrees that the Company's remedy
at law for a breach or threatened breach of any of the provisions of Paragraphs
7a. and 7b. herein would be inadequate and the breach shall be deemed as causing
irreparable harm to the Company. In recognition of this fact, in the event of a
breach by Employee of any of the provisions of Paragraphs 7a. and 7b., Employee
agrees that, in addition to any remedy at law available to the Company,
including, but not limited to, monetary damages, all rights of Employee to
payment or otherwise under this Agreement and all amounts then or thereafter due
Employee from the Company under this Agreement may be terminated and the
Company, without posting any bond, shall be entitled to obtain and Employee
agrees not to oppose the Company's request for equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction, or any other equitable remedy which may be then available to the
Company.

ii. Employee acknowledges that the granting of a
temporary injunction, temporary restraining order or permanent

<PAGE>

injunction, merely prohibiting the use of Proprietary Information would not get
an adequate remedy upon breach or threatened breach of Paragraphs 7a. and 7b.
and consequently agrees, upon proof of any such breach, to the granting of
injunction relief prohibiting any form of competition with the Company. Nothing
herein contained shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach.

g. Attorney's Fees. Employee agrees that in the
event the Company is required to engage an attorney to enforce the
terms of the covenants in Paragraphs 7a. and 7b. of this Agreement,
Employee shall pay all costs and expenses, whether or not a suit or
complaint is filed in any court of competent jurisdiction, including a
reasonable attorney's fee for the Company's attorney.

8. Working Conditions. Employee shall have a private
office and support staff, including stenographic help and other
facilities and services as are suitable and appropriate for the performance of
his duties. Employee shall keep normal business hours and conduct business at
the Company's offices.

9. Outside Business Interests. Employee acknowledges that he has an
active legal practice which he has been divesting himself of for the past twelve
months and which, if continued, would be in violation of Paragraph 2. As a
condition of his employment, Employee agrees to fully divest himself of his
legal practice, known as "The Law Office of John S. McAvoy", within six (6)
months of the company's shares being offered to the general public pursuant to
its Section 504 and Form "D" filing. In the interim, Employee agrees to fully
disclose to the Company and to respond to all reasonable inquiries by the
Company with regard to the status of his divestment in "The Law Office of John
S. McAvoy". The Company acknowledges and agrees that with certain active cases,
divestment will require a court order approving withdrawal of Employee as
attorney of record. If for any reason the Court will not grant Employee's motion
to withdraw, then the Employee, being forced to continue representation, will
seek assistance of associate counsel to handle much, if not all, of the work
involved on such cases. Upon execution of this Agreement, Employee agrees not to
solicit or accept any additional legal work. It being the stated intent of the
Parties that Employee not be actively participating as a lawyer in any cases six
(6) months after the execution of this Agreement, and, in the interim, to take
all reasonable and necessary efforts to minimize his time spent on his legal
practice so that his full attention can be devoted to the Company's business.

10. Termination.
a. Termination Without Cause. the Company and the
Employee may terminate this Agreement without cause upon giving
sixty (60) days prior written notice. During such sixty (60) day
period, Employee shall continue to perform his duties pursuant to
this Agreement, and the Company shall continue to compensate
Employee in accordance with this Agreement.

11. Termination
b. Mutual Agreement. The Company and Employee may
terminate this Agreement by mutual agreement.

<PAGE>

c. Immediate Termination. This
Agreement may be terminated immediately by the Company upon the
occurrence of any of the following events:

i. Any material violation of this Agreement; or
ii. The death of Employee; or
iii. The disability or incapacity of Employee; or
iv. The willful engagement and misconduct that is
materially injurious to the Company, monetarily or otherwise; or
v. Employee's commission of any act or acts
constituting a felony under the laws of the United States or any
State thereof.

d. Termination After Failure to Cure Breach. If the
Employee commits a material breach of any provision of this
Agreement, the Company may terminate the Agreement at any time, if after
providing written notice to Employee of the alleged breach or failure, the
breach or failure remains uncured for a period of ten (10) days after receipt of
such notice.

11. Notices. Any notice required or permitted to be given under the
terms of this Agreement shall be sufficient if in writing and if sent postage
prepaid by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Employee to
the Employee's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office, or such
other place as the Company may designate.

12. Miscellaneous.
a. Further Assurances. At any time, and from time to
time, each Party will execute such additional instruments and take
such action as may be reasonably requested by the other Party to
confirm or perfect title to any property transferred hereunder or
otherwise to carry out the intent and purposes of this Agreement.

b. Costs and Expenses. Each Party hereto agrees to pay
its own costs and expenses incurred in negotiating this Agreement
and consummating the transactions described herein.

c. Time. Time is of the essence.

d. Entire Agreement. This Agreement constitutes the
entire Agreement between the Parties hereto with respect to the
subject matter hereof. It supersedes all prior negotiations,
letters and understandings relating to the subject matter hereof.
e. Amendment. This Agreement may not be amended,
supplemented or modified in whole or in part except by an
instrument in writing signed by the Party or Parties against whom
enforcement of any such amendment, supplement of modification is
sought.

f. Choice of Law. This Agreement will be interpreted,
construed and enforced in accordance with the laws of the State of
Florida.

g. Headings. The section and subsection headings in
this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.

<PAGE>

h. Pronouns. All pronouns and any variation thereof
shall be deemed to refer to the masculine, feminine, neuter,
singular, or plural as the context may require.

i. Construction. This Agreement shall be
construed neither against nor in favor of either of the Parties
hereto, but rather in accordance with the fair meaning thereof.

j. Effect of Waiver. The failure of any Party at any
time or times to require performance of any provision of this
Agreement will in no manner affect the right to enforce the same. The waiver by
any Party of any breach of any provision of this Agreement will not be construed
to be a waiver by ant such Party of any succeeding breach of that provision or a
waiver by such Party of any breach of any other provision.

k. Severability The invalidity, illegality or unenforceability
of any provision or provisions of this Agreement will not affect any other
provision of this Agreement, which will remain in full force and effect, nor
will the invalidity, illegality or unenforeceability of a portion of any
provision of this Agreement affect the balance of such provision. In the event
that any one or more of the provisions contained in this Agreement or any
portion thereof shall for any reason be held to be invalid, illegal or
unenforceable provision had never been contained herein. If any court determines
that any provision of Paragraph eight (8) hereof is unenforceable because of the
duration or scope of such provision, such court shall have power to reduce the
scope or duration of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.

l. Binding Nature. This Agreement will be binding
upon and will inure to the benefit of any successors of the
Company.

m. Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original
and all of which together will constitute one and the same
instrument.

Employee acknowledges that he has read all of the terms of this
Agreement, fully understands them, has made a voluntary decision to execute this
Agreement and agrees to abide by its terms and conditions.

<PAGE>

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written in Pinellas County, Florida.

WITNESSES: Pocotopaug Investment, Inc.
a Florida corporation

Print: By: John S. McAvoy
Its: President

(Corporate Seal)

Print: John S. McAvoy
"EMPLOYEE"

<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into this 28th day of April, 1997, and is
effective as of its execution (the "effective date") between AQUA
CLARA BOTTLING & DISTRIBUTION, INC., a Colorado for profit
corporation registered to do business in Florida, (the "Company"),
and JOHN C. PLUNKETT, JR. (the "Employee").

WHEREAS, the Company is a Colorado for profit
corporation registered to do business in Florida; and

WHEREAS, the Company's business plan calls for
it to engage in the bottling and distribution of water to the
general public and the acquisition of water treatment companies;
and

WHEREAS, the Employee has provided valuable
telecommunications and computer services, has provided invaluable construction
services, and has been active as a full participating partner with John S.
McAvoy since October, 1996, and in providing said valuable services to the
Company has been instrumental in allowing the Company to move forward to a point
where it is about to become fully operational and where the Company's common
stock will be trading on the NASD; and

WHEREAS, in providing the valuable services
described above, Employee has not only expended virtual full time efforts on
behalf of the Company and its predecessor, but has foregone substantial income
producing opportunities and has provided said valuable services without
compensations; and

WHEREAS, the Employee is desirous of continued
employment by the Company and the Company is desirous of Employee's
continued employment; and

WHEREAS, the Company has agreed to continue the
Employee's employment upon certain terms and conditions, one of
which is the execution of the Agreement by Employee; and

WHEREAS, it is the intent of the Company that
all officers and management employees will execute an employment
agreement as a condition of their employment; and

WHEREAS, the Employment is an officer,
Secretary, and Director of the Company.

NOW, THEREFORE, in consideration of the mutual
agreements herein made, the Company and Employment do hereby agree
as follows:

1. Employment. The Company hereby employs
the Employee, and Employee hereby accepts employment, upon the terms and
conditions hereinafter set forth.

<PAGE>

services to the Company and shall be employed solely by the Company according to
the terms of this Agreement.

Notwithstanding the foregoing, the Employee has
disclosed, and the Company is aware, that the Employee does outside consulting
through SAIC. Said consulting is not in the water industry nor will any of the
Company's proprietary information be in conflict with Employee and upon
Employee's agreement that his salary will reflect his ability to fully commit to
the Company, the Company agrees that the Employee may continue providing
part-time consulting services to SAIC and its clients. However, Employee agrees
that should the providing of those services cause a detriment to the Company,
that he will either cease providing those services or will voluntarily terminate
his employment with the Company.

3. Term. The term of the employment
hereunder will commence upon execution of this Agreement and shall continue for
one (1) year. Such term shall automatically be extended for each successive year
thereafter, unless i) the parties mutually agree in writing to alter or amend
the terms of the Agreement, or ii) one or goth of the Paries exercise their
rights, pursuant to Paragraph 9 herein, to terminate this employment
relationship.

a. Probationary Period.Notwithstanding the foregoing, Employee has been advised
and acknowledges that he, as with all Company employees, is subject to a ninety
(90) say probationary period from May 5, 1997.

4. Compensation.
a. Salary. For all services rendered by Employee, pursuant to
the terms of this Agreement, and in consideration of the execution of this
Agreement by Employee, the Company shall pay Employee Seventy Two Thousand
Dollars ($72,000) per year which salary shall be paid twice monthly.
Notwithstanding the foregoing, Employee has voluntarily agreed to assist the
Company's anticipated cash flow by accruing a portion of his salary which
portion, shall be mutually agreed by and between the Company and the Employment
from time to time. For all accrued salary, Employee shall be paid interest on
the accrued amount and/or shall have the opportunity, at his option, and subject
to board approval, to convert the accrued salary, or a portion of it, to Aqua
Clara common stock on a ratio mutually agreed upon between the Company and the
Employee.

b. Aqua Clara Common Stock. As and for additional compensation
to Employee, the Company agrees to issue, in Employee's name, five hundred
thousand (500,000) shares of its Common Stock. The Company shall deliver to
Employee one hundred thousand (100,000) shares of its Common Stock as soon as
Employee's probationary period is completed. Thereafter, the Company will
deliver to Employee one hundred thousand (100,000) shares of its Common Stock in
twelve (12) month increments until all of the shares have been delivered to
Employee. Shares which have not been delivered to Employee will be held in
escrow, pursuant to an escrow agreement, by the Company's attorney or other
designated and mutually agreed upon escrow agent. In the event that the
employment relationship between the Company and the Employee ceases before all
of the above-described common stock have been delivered

<PAGE>

to Employee, then Employee agrees to execute all necessary documents to have the
undelivered common stock reissued in the Company's name. For all common stock
being held in escrow, Employee agrees to execute a proxy agreement whereby the
Company, or its designee, shall have the right to vote the undelivered common
stock. The Company agrees that Employee may designate any sitting board member
as his proxy holder by written notice to the Company.

5. ESOP and ESAP. The Company agrees that for a period of three (3)
years, Employee shall be awarded common stock pursuant to any stock award or
stock option programs in an amount equal to common stock offered to John McAvoy
or Stuart Frank pursuant to the Company's ESOP or ESAP programs.

6. Benefits. Employee shall be entitled to participate in
the Company's benefit programs maintained by the Company for the
benefit of employees, in general, in accordance with and pursuant
to the terms of all such plans. Employee shall also be entitled to
receive any other benefits as may, from time to time, be awarded to
him by the Board of Directors.

7. Expenses. The Company shall reimburse Employee for all
authorized and reasonable expenses incurred by Employee during his
employment by the Company. Employee shall be reimbursed expenses
a reasonable time after submitting an expense report in the form
provided by and in compliance with the Company's policies.

8. Covenant Not to Compete and Non-Disclosure of
Information.
a. Covenant Not to Compete. Employee acknowledges and
recognizes the highly competitive nature of Company's business, and that the
goodwill, continued patronage, information and business contacts, including
clients, constitute a substantial asset of the Company having been acquired
through considerable time, money and effort. Accordingly, in consideration of
the execution of this Agreement, Employee agrees to the following:

i. During the Restrictive Period (as hereinafter defined), within the
Restricted Area (as hereinafter defined), Employee will not individually, or in
conjunction with others, directly or indirectly engage in any business
activities, whether as an officer, director, proprietor, employer, partner,
independent contractor, investor (other than as a holder of less than five
percent (5%) of the outstanding capital stock of the corporation), consultant,
advisor, agent or otherwise, which conflict with the Company's business or
Employee's duties.
ii. During the Restrictive Period and within the Restricted Area,
Employee will not directly or indirectly compete with the Company by soliciting,
inducing or influencing any individuals having business or prospective
relationships with the Company to discontinue or reduce the extent of such
relationship with the Company, or to support any business ventures by Employee
in violation of this Agreement.

<PAGE>

Company, or (b) employ or seek to employ, or cause, assist, or permit any
business which competes directly or indirectly with the Company to employ or
seek to employ, any agent or employee of the Company.

iv. During the Restrictive Period, Employee will not interfere with or
disrupt or attempt to disrupt any past, present or prospective relationship,
contractual or otherwise, between the Company and any customer, employer or
agent of the Company.

v. This covenant is a restrictive covenant and Employee has knowingly
and willingly granted this to the Company and that, further, the entire
Employment Agreement is contingent upon said covenant.

c. Documents. "Documents" shall mean all original written,
recorded or graphic matters whatsoever, and any and all copies thereof,
including, but not limited to: paper; books; records; tangible things;
correspondence; communications; telex messages; memoranda; work-papers; reports;
affidavits; statements; summaries; analysis; evaluations; client records and
information; agreements; agendas; advertisements; instructions; charges;
manuals; brochures; publications; directories; industry lists; schedules; price
lists; client lists; statistical records; training manuals; books of accounts;
records and invoices reflecting business operations; E-mail; computer printouts;
computer disks; and all things similar to any of the foregoing however
denominated.

<PAGE>

and the Southeast United States.

It is understood by and between the Company and Employee that the
foregoing covenants in Paragraphs 8a. and 8b. are essential elements of this
Agreement, and that but for the agreement by employee to comply with such
covenants the Company would not have agreed to enter into this Agreement. Such
covenants by Employee shall be construed to be agreements independent of any
other provisions of this Agreement, and shall survive the termination of this
Agreement and Employees employment with the Company for a period of twenty-four
(24) months after the termination of Employee's employment or five (5) years
from the execution of this Agreement, whichever is longer. The existence of any
other claim or cause of action, whether predicated on any other provision of
this Agreement, or otherwise, as a result of the relationship between the
Parties, shall not constitute a defense to the enforcement of such covenants
against Employee.

f. Remedies.
i. Employee acknowledges and agrees that the Company's remedy
at law for a breach or threatened breach of any of the provisions of Paragraphs
8a. and 8b. herein would be inadequate and the breach shall be deemed as causing
irreparable harm to the Company. In recognition of this fact, in the event of a
breach by Employee of any of the provisions of Paragraphs 8a. and 8b., Employee
agrees that, in addition to any remedy at law available to the Company,
including, but not limited to, monetary damages, all rights of Employee to
payment or otherwise under this Agreement and all amounts then or thereafter due
Employee from the Company under this Agreement may be terminated and the
Company, without posting any bond, shall be entitled to obtain and Employee
agrees not to oppose the Company's request for equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction, or any other equitable remedy which may be then available to the
Company.

ii. Employee acknowledges that the granting of a temporary
injunction, temporary restraining order or permanent injunction, merely
prohibiting the use of Proprietary Information would not get an adequate remedy
upon breach or threatened breach of Paragraphs 8a. and 8b. and consequently
agrees, upon proof of any such breach, to the granting of injunction relief
prohibiting any form of competition with the Company. Nothing herein contained
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach.

g. Attorney's Fees. Employee
agrees that in the event the Company is required to engage an
attorney to enforce the terms of the covenants in Paragraphs 8a.
and 8b. of this Agreement, Employee shall pay all costs and
expenses, whether or not a suit or complaint is filed in any court
of competent jurisdiction, including a reasonable attorney's fee
for the Company's attorney.

9. Working Conditions. Employee
shall have an office and support staff, including stenographic help
and other facilities and services as are suitable and appropriate
for the performance of his duties. Employee shall keep normal

<PAGE>

business hours and conduct business at the Company's offices.

11. Termination
b. Mutual Agreement. The Company
and Employee may terminate this Agreement by mutual agreement.

c. Immediate Termination. This
Agreement may be terminated immediately by the Company upon the
occurrence of any of the following events:

i. Any material violation of this Agreement; or
ii. The death of Employee; or
iii. The disability or incapacity of Employee; or
iv. The willful engagement and misconduct that is materially
injurious to the Company, monetarily or otherwise; or
v. Employee's commission of any act or acts constituting a
felony under the laws of the United States or any State thereof.

b. Costs and Expenses. Each Party hereto agrees to pay
its own costs and expenses incurred in negotiating this Agreement
and consummating the transactions described herein.

c. Time. Time is of the essence.

<PAGE>

e. Amendment. This Agreement may not be amended,
supplemented or modified in whole or in part except by an
instrument in writing signed by the Party or Parties against whom
enforcement of any such amendment, supplement of modification is
sought.

f. Choice of Law. This Agreement will be interpreted,
construed and enforced in accordance with the laws of the State of
Florida.

g. Headings. The section and subsection headings in
this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.

h. Pronouns. All pronouns and any variation thereof
shall be deemed to refer to the masculine, feminine, neuter,
singular, or plural as the context may require.

i. Construction. This Agreement shall be
construed neither against nor in favor of either of the Parties
hereto, but rather in accordance with the fair meaning thereof.

l. Binding Nature. This Agreement will be binding
upon and will inure to the benefit of any successors of the
Company.

m. Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original
and all of which together will constitute one and the same
instrument.

<PAGE>

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written in Pinellas County, Florida.

WITNESSES: AQUA CLARA BOTTLING & DISTRIBUTION, INC.,
a Colorado corporation

Print: By: John S. McAvoy
Its: President

(Corporate Seal)

Print: JOHN C. PLUNKETT, JR.
"EMPLOYEE"

<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into this 28th day of July, 1997, and is effective as of its
execution (the "effective date") between AQUA CLARA BOTTLING & DISTRIBUTION,
INC., a Colorado for profit corporation registered to do business in Florida,
(the "Company"), and Rand L.
Gray (the "Employee").

WHEREAS, the Company is a Colorado for profit
corporation registered to do business in Florida; and

WHEREAS, the Company's business plan calls for
it to engage in the bottling and distribution of water to the
general public and the acquisition of water treatment companies;
and

WHEREAS, the Employee is an accountant who has
significant business experience;

WHEREAS, the Company is desirous of employing
Employee as its Treasurer under the below-described terms and
conditions; and

WHEREAS, the Employee is desirous of being
employed by the Company under the below-described terms and
conditions; and

WHEREAS, it is the intent of the Company that
all officers and management employees will execute an employment
agreement as a condition of their employment; and

NOW, THEREFORE, in consideration of the mutual
agreements herein made, the Company and Employment do hereby agree
as follows:

1 Employment. The Company hereby employs
the Employee, and Employee hereby accepts employment, upon the terms and
conditions hereinafter set forth.

2. Authority and Power During Employment
Period. The duties of Employee shall be subject to the discretion and direction
of the Company's officers and directors. Employee shall devote full attention to
and render exclusive full time services to the Company and shall be employed
solely by the Company according to the terms of this Agreement.

The employee is being retained to hold the
office of Treasurer of Aqua Clara Bottling & Distribution, Inc. The Company has
made Employee aware, and the Employee agrees, that his duties will not be
limited strictly to financial matters and that his opinions and secondary duties
may also include human resources, employee benefits, customer service,
marketing, advertising and promotion, and general operations where Employee's
experience can be used to best benefit the Company and its shareholders.

3. Term. The term of the employment
hereunder will commence upon execution of this Agreement and shall

<PAGE>

continue for one (1) year. Such term shall automatically be extended for each
successive year thereafter, unless i) the parties mutually agree in writing to
alter or amend the terms of the Agreement, or ii) one or goth of the Paries
exercise their rights, pursuant to Paragraph 9 herein, to terminate this
employment relationship.

a. Probationary Period. Notwithstanding the foregoing, Employee
has been advised and acknowledges that he, as with all Company
employees, is subject to a ninety (90) day probationary period.

i. Forty-two thousand ($42,000) of which shall be paid in cash on a twice
monthly basis; and

ii. Thirty thousand dollars ($30,000) of which will be accrued, which
accrual shall be
secured and upon which shall be paid at a reasonable interest rate.

iii. Salary
Accruals - Employee has been advised that John McAvoy and John Plunkett, II, are
also being paid upon the same percentages of the accrued amounts as any accruals
paid to either John McAvoy or John Plunkett, II. In the event that either John
McAvoy or John Plunkett are offered the opportunity to convert their accrued
wages into equity, then Employee shall be offered the same right of conversion
upon the same terms and conditions.

iv. Salary
Increases. Employee has been advised and acknowledged and said he is aware that
John McAvoy and John Plunkett, II, have like salaries accruing in like amounts.
It has been specifically agreed that employee will receive a salary increase at
the same time that John McAvoy and/or John Plunkett, II receive a salary
increase and that Employees of the first salary increase shall be equal to that
awarded to John McAvoy or John Plunkett, II.

b. Aqua Clara Common Stock.
As and for additional compensation to Employee, the Company agrees
to issue, in Employee's name, two hundred fifty thousand (250,000) shares of its
Common Stock upon the following issuance and delivery schedule.

i. Fifty
thousand (50,000) shares of its Common Stock upon Employee's
completion of his ninety day (90) probationary period;
ii. Fifty thousand (50,000) shares of its Common Stock in twelve (12) month

<PAGE>

increments until all of the shares have been issued and delivered
to Employee.

5. ESOP and ESAP. The Company agrees that
for a period of three (3) years, Employee shall be awarded common stock pursuant
to any stock award or stock option programs in an amount equal to common stock
offered to John McAvoy or Stuart Frank pursuant to the Company's ESOP or ESAP
programs.

6. Benefits. Employee shall be entitled to
participate in the Company's benefit programs maintained by the Company for the
benefit of employees, in general, in accordance with and pursuant to the terms
of all such plans. Employee shall also be entitled to receive any other benefits
as may, from time to time, be awarded to him by the Board of Directors.

7. Expenses. The Company shall reimburse
Employee for all authorized and reasonable expenses incurred by Employee during
his employment by the Company. Employee shall be reimbursed expenses a
reasonable time after submitting an expense report in the form provided by and
in compliance with the Company's policies.

8.Covenant Not to Compete and Non-Disclosure of Information. Covenant Not to
Compete. Employee acknowledges and recognizes the highly competitive nature of
Company's business, and that the goodwill, continued patronage, information and
business contacts, including clients, constitute a substantial asset of the
Company having been acquired through considerable time, money and effort.
Accordingly, in consideration of the execution of this Agreement, Employee
agrees to the following: i.During the Restrictive Period (as hereinafter
defined), within the Restricted Area (as hereinafter defined), Employee will not
individually, or in conjunction with others, directly or indirectly engage in
any business activities, whether as an officer, director, proprietor, employer,
partner, independent contractor, investor (other than as a holder of less than
five percent (5%) of the outstanding capital stock of the corporation),
consultant, advisor, agent or otherwise, which conflict with the Company's
business or Employee's duties. ii.During the Restrictive Period and within the
Restricted Area, Employee will not directly or indirectly compete with the
Company by soliciting, inducing or influencing any individuals having business
or prospective relationships with the Company to discontinue or reduce the
extent of such relationship with the Company, or to support any business
ventures by Employee in violation of this Agreement. iii.During the Restrictive
Period and within the Restrictive Area, Employee will not (a) directly or
indirectly recruit, solicit or otherwise influence any employee or agent of the
Company to discontinue such employment or agency relationship with the Company,
or (b) employ or seek to employ, or cause, assist, or permit any business which
competes directly or indirectly with the Company to employ or seek to employ,
any agent or employee of the Company.

iv. During the Restrictive Period, Employee will not
interfere with or disrupt or attempt to disrupt any past, present
or prospective relationship, contractual or otherwise, between the

<PAGE>

Company and any customer, employer or agent of the Company.

v. This covenant is a restrictive covenant and Employee has knowingly and
willingly granted this to the Company and that, further, the entire Employment
Agreement is contingent upon said covenant.

b. Non-Disclosure of Information. Employee acknowledges that the Company's
trade secrets, private or secret processes, methods and ideas, as they exist
from time to time, customer lists and information concerning the Company's
products, services, training methods, development, technical information,
marketing activities and procedures, credit and financial data concerning the
Company, access to and knowledge of the industry in which the Company's business
is and will be conducted, Employee agrees that all Proprietary Information
heretofore or in the future obtained by the Employee as a result of the
Employee's association with the Company shall be considered confidential.

In recognition of this fact, Employee agrees that Employee will never use or
disclose any of such Proprietary Information for the Employee's own purposes or
for the benefit of any person or other entity or organization (except the
Company) under any circumstances, unless the Employee is compelled by court
order to disclose such Proprietary Information, or unless Employee obtains prior
written permission from the Company to disclose such Proprietary Information.

c. Documents. "Documents" shall mean all original written, recorded or
graphic matters whatsoever, and any and all copies thereof, including, but not
limited to: paper; books; records; tangible things; correspondence;
communications; telex messages; memoranda; work-papers; reports; affidavits;
statements; summaries; analysis; evaluations; client records and information;
agreements; agendas; advertisements; instructions; charges; manuals; brochures;
publications; directories; industry lists; schedules; price lists; client lists;
statistical records; training manuals; books of accounts; records and invoices
reflecting business operations; E-mail; computer printouts; computer disks; and
all things similar to any of the foregoing however denominated.

d. Restrictive Period. "Restrictive Period" shall be deemed
to be during the Term of this Agreement and any extension thereof,
and for a period of twenty-four (24) months following termination
of this Agreement, regardless of the reason(s) for termination.

e. Restricted Area. "Restricted Area" shall be deemed to mean
within the State of Florida, Costa Rica, or any other geographical
locale that the Company is doing business in or has plans to do
business in, including Central America, the Caribbean, and the
Southeast United States.

<PAGE>

this Agreement and Employees employment with the Company for a period of
twenty-four (24) months after the termination of Employee's employment or five
(5) years from the execution of this Agreement, whichever is longer. The
existence of any other claim or cause of action, whether predicated on any other
provision of this Agreement, or otherwise, as a result of the relationship
between the Parties, shall not constitute a defense to the enforcement of such
covenants against Employee.

f. Remedies.
i. Employee acknowledges and agrees that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Paragraphs
8a. and 8b. herein would be inadequate and the breach shall be deemed as
causing irreparable harm to the Company. In recognition of this fact, in
the event of a breach by Employee of any of the provisions of Paragraphs
8a. and 8b., Employee agrees that, in addition to any remedy at law
available to the Company, including, but not limited to, monetary damages,
all rights of Employee to payment or otherwise under this Agreement and
all amounts then or thereafter due Employee from the Company under this
Agreement may be terminated and the Company, without posting any bond,
shall be entitled to obtain and Employee agrees not to oppose the
Company's request for equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent
injunction, or any other equitable remedy which may be then available to
the Company.

ii. Employee acknowledges that the granting of a temporary injunction,
temporary restraining order or permanent injunction, merely prohibiting
the use of Proprietary Information would not get an adequate remedy upon
breach or threatened breach of Paragraphs 8a. and 8b. and consequently
agrees, upon proof of any such breach, to the granting of injunction
relief prohibiting any form of competition with the Company. Nothing
herein contained shall be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach.

g. Attorney's Fees. Employee agrees that in the event the
Company is required to engage an attorney to enforce the terms of
the covenants in Paragraphs 8a. and 8b. of this Agreement, Employee
shall pay all costs and expenses, whether or not a suit or
complaint is filed in any court of competent jurisdiction,
including a reasonable attorney's fee for the Company's attorney.

10. Termination.
a. Termination Without Cause. the Company and the Employee may terminate
this Agreement without cause upon giving sixty (60) days prior written notice.
During such sixty (60) day period, Employee shall continue to perform his duties
pursuant to this Agreement, and the Company shall continue to compensate
Employee in accordance with this Agreement.

<PAGE>

11. Termination
b. Mutual Agreement. The Company
and Employee may terminate this Agreement by mutual agreement.

c. Immediate Termination. This Agreement may be terminated immediately
by the Company upon the occurrence of any of the following events:

i. Any material violation of this Agreement; or
ii. The death of Employee; or
iii. The disability or incapacity of Employee; or
iv. The willful engagement and misconduct that is materially
injurious to the Company, monetarily or otherwise; or
v. Employee's commission of any act or acts constituting a
felony under the laws of the United States or any State thereof.

11. Notices. Any notice required or permitted to be given under the terms of
this Agreement shall be sufficient if in writing and if sent postage prepaid by
registered or certified mail, return receipt requested; by overnight delivery;
by courier; or by confirmed telecopy, in the case of the Employee to the
Employee's last place of business or residence as shown on the records of the
Company, or in the case of the Company to its principal office, or such other
place as the Company may designate.

12. Miscellaneous.
a. Further Assurances. At any time, and from time to time, each Party will
execute such additional instruments and take such action as may be reasonably
requested by the other Party to confirm or perfect title to any property
transferred hereunder or otherwise to carry out the intent and purposes of this
Agreement.

b. Costs and Expenses. Each Party
hereto agrees to pay its own costs and expenses incurred in
negotiating this Agreement and consummating the transactions
described herein.

c. Time. Time is of the essence.

d. Entire Agreement. This
Agreement constitutes the entire Agreement between the Parties
hereto with respect to the subject matter hereof. It supersedes
all prior negotiations, letters and understandings relating to the
subject matter hereof.
e. Amendment. This Agreement may not be amended, supplemented
or modified in whole or in part except by an instrument in writing
signed by the Party or Parties against whom enforcement of any such
amendment, supplement of modification is sought.

f. Choice of Law. This Agreement will be interpreted,
construed and enforced in accordance with the laws of the State of

<PAGE>

Florida.

g. Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement.

h. Pronouns. All pronouns and any variation thereof shall
be deemed to refer to the masculine, feminine, neuter, singular, or
plural as the context may require.

i. Construction. This
Agreement shall be construed neither against nor in favor of either
of the Parties hereto, but rather in accordance with the fair
meaning thereof.

j. Effect of Waiver. The failure of any Party at any time or times to
require performance of any provision of this Agreement will in no manner affect
the right to enforce the same. The waiver by any Party of any breach of any
provision of this Agreement will not be construed to be a waiver by ant such
Party of any succeeding breach of that provision or a waiver by such Party of
any breach of any other provision.

k. Severability The invalidity, illegality or unenforceability of any
provision or provisions of this Agreement will not affect any other provision of
this Agreement, which will remain in full force and effect, nor will the
invalidity, illegality or unenforeceability of a portion of any provision of
this Agreement affect the balance of such provision. In the event that any one
or more of the provisions contained in this Agreement or any portion thereof
shall for any reason be held to be invalid, illegal or unenforceable provision
had never been contained herein. If any court determines that any provision of
Paragraph eight (8) hereof is unenforceable because of the duration or scope of
such provision, such court shall have power to reduce the scope or duration of
such provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.

l. Binding Nature. This Agreement will be binding upon and
will inure to the benefit of any successors of the Company.

m. Counterparts. This Agreement may be executed in one
or more counterparts, each of which will be deemed an original and
all of which together will constitute one and the same instrument.

Employee acknowledges that he has read all of the terms of this Agreement,
fully understands them, has made a voluntary decision to execute this Agreement
and agrees to abide by its terms and conditions.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written in Pinellas County, Florida.

WITNESSES: AQUA CLARA BOTTLING & DISTRIBUTION, INC.,
a Colorado corporation

<PAGE>

Print: By: John S. McAvoy
Its: President

(Corporate Seal)

Print: Rand L Gray
"EMPLOYEE"

<PAGE>

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment is made and entered into this 30th day of July, 1997 and is
retroactively effective to July 28, 1997, the date of the execution of the
Employment Agreement. This Amendment is by and between Aqua Clark Bottling and
Distribution, Inc. and Rand L.
Gray, "Employee".

4. Compensation
b. Aqua Clara Common Stock. As and for additional compensation to
Employee, the Company agrees to immediately have issued in Employee's name, two
hundred fifty thousand (250,000) shares of its Common Stock. The Company shall
deliver to Employee fifty thousand (50,000) shares of its Common Stock as soon
as Employee's 90 day probationary period is completed. Thereafter, the Company
will deliver to Employee fifty thousand (50,000) shares of its Common Stock in
twelve (12) month installations until all of the shares have been delivered to
Employee. Shares which have not been delivered to Employee will be held in
escrow pursuant to an Escrow Agreement, by the Company's attorney or other
designated or mutually agreed upon escrow agent. In the event that the
employment relationship between the Company and the Employee ceases before all
of the above-described Common Stock have been delivered to Employee, then
Employee agrees to execute all necessary documents to have the undelivered
Common Stock reissued in the Company's name. For all Common Stock being held in
escrow, Employee agrees to execute a proxy agreement whereby the Company or its
designee, shall have the right to vote the undelivered Common Stock. The Company
agrees that Employee may designate any sitting board member as his proxyholder
by written notice to the Company.

WITNESSES: AQUA CLARK BOTTLING & DISTRIBUTION, INC.

Print: By: JOHN S. McAVOY
Its: President

Print RAND L. GRAY
Employee

<PAGE>

LEAD GENERATION / CORPORATE RELATIONS AGREEMENT

THIS AGREEMENT is made this 17th day of November, 1997, between CORPORATE
RELATIONS GROUP, INC., a Florida corporation (hereinafter "CRG"), and AQUA CLARA
BOTTLING & DISTRIBUTION, (hereinafter the "Client").
RECITALS

1. The Client wishes to retain CRG to provide corporate relations
services to the Client.
2. CRG is willing to provide such corporate relations services as
are more fully described herein.

NOW THEREFORE, in consideration of the mutual promises contained
herein, it is agreed as follows:
1. Furnishing of Information by Client. The Client shall furnish
to CRG information about the Client such as copies of disclosure and
filing materials, financial statements, business plans, promotional
information and background of the Client's officers and directors
("Information Package"). The Client shall update the Information Package
on a continuous basis. The Client understands that the sole purpose for
providing CRG with the Information Package is for utilization in a Lead
Generation / Corporate Relations program. CRG is not obligated to assess
the financial viability of the Client. CRG may rely on, and assume the
accuracy of the Information Package.

2. Representations and Warranties of Client. The Client represents that all
information included in the Information Package furnished to CRG shall
disclose all material facts and shall not omit any facts necessary to make
statements made on behalf of the Client not misleading.

3. Covenants of the Client. The Client covenants and warrants that any
information submitted for dissemination will be truthful, accurate, in
compliance with all copyright and all other applicable laws and
regulations and will not be submitted in connection with any improper or
illegal act or deed.

4. For a period of twelve (12) months, pursuant to the terms hereof, CRG's
services shall specifically include making oral representations on behalf
of the Client pursuant to the following procedures:
(a) Preparation of Proofs. CRG shall prepare proofs and/or tapes of the
agreed upon materials and information, as set for dissemination, for
the Client's review and approval.
(b) Correction and Changes of Proofs and/or Tapes. CRG shall
make all corrections and changes that the Client may request.
(c) Sign Offs. A duly authorized representative of the Client shall sign
all approvals, corrections and change of proofs by the Client. The
Client hereby designates the individual(s) listed in Exhibit "C"
hereof as authorized representatives for purposes of this paragraph
4(a), (b) and (c); and CRG may rely upon this designation.

5. Compensation. Refer to Exhibit "B".
6. It is understood and agreed by the Parties that the above

<PAGE>

compensation in U.S. currency, or free trading shares of the
Company, should be paid timely upon execution of this
Agreement. CRG will retain the option, but is not compelled
to begin its performance under this Agreement prior to the
payment of such compensation in U.S. currency or free trading
shares.

7. Assumption of Liability and Indemnification. The Client
--------------------------------------------
assumes and claims all responsibility and liability for the
content of all information disseminated on behalf of the
Client which have been approved by Client. The Client shall
indemnify and hold CRG, its subsidiaries and parent Company
harmless from and against all demands, claims or liability
arising for any reason due to the context of information
disseminated on behalf of the Client. This indemnity shall
include any costs incurred by CRG including, but not limited
to, legal fees and expenses incurred both in administrative
proceedings, at trial and appellate levels, in settlement of
claims and payment of any judgement against CRG.

8. Termination for Fraud or Criminal Acts. The client further
---------------------------------------
agrees that CRG may terminate this Contract without recourse
to the Client if the Company is found to be in violation of
rules promulgated by any United States regulatory agency or of
any state regulatory agency. Illegal activity per se shall
include but not be limited to the release by the Company of
false press releases or the payment of any securities or money
to brokers. In the event of such action by the Company, CRG
will be entitled to retain any and all monies prior paid.

9. Assignment and Delegation. Neither party may assign any
rights or delegate any duties hereunder without the other
party's express prior written consent.

10. Entire Agreement. This writing contains the entire agreement
-----------------
of the parties. No representations were made or relied upon
by either party, other than those expressly set forth.
Furthermore, the Client understands that CRG makes no
guarantees, assurances or representations in regard to the
results of its corporate relations program. No agent,
employee or other representative of either party is empowered
to alter any of the above terms, unless done in writing and
signed by an executive officer of the respective parties.

11. Controlling Law and Venue. This Agreement's validity,
interpretation and performance shall be controlled by and
construed under the laws of the State of Florida. The proper
venue and jurisdiction shall be the Circuit Court in Orange
County, Florida.

12. Prevailing Party. In the event of the institution of any
legal proceedings or litigation, at the trial level or
appellate level, with regard to this Agreement, the prevailing
party shall be entitled to receive from the non-prevailing
party all costs, reasonable attorney's fees and expenses.

13. Failure to Object not a Waiver. The failure of either party
to this Agreement to object to, or to take affirmative action,
with respect to any conduct of the other which is in violation

<PAGE>

of the terms of this Agreement shall not be construed as a waiver of
the violation or breach, or of any future violation, breach or wrongful
conduct.

14. Notices. All notices or other documents under this Agreement
shall be in writing and delivered personally or mailed by
certified mail, postage prepaid, addressed to the
representative or Company as follows:

Company: CORPORATE RELATIONS GROUP, INC.
1947 Lee Road
Winter Park, FL 32789
Attention: Joseph H. Landis, President

CLIENT: AQUA CLARA BOTTLING & DISTRIBUTION
10720 72nd St., N., Suite 305
Largo, FL 33777
Attention: John McAvoy, President

15. Headings. Headings in this Agreement are for convenience only
not be used to interpret its provisions.

16. Time. For all intents and purposes, time is of the essence
with this Agreement.

17. Agreement Not to Hire. The Client understands and appreciates
----------------------
that CRG has invested a tremendous amount of time, energy and
expertise in the training of its employees to be able to
provide the very service that Client desires. Client further
understands that should an employee be enticed to leave, then
CRG will be damaged in an amount the parties are incapable of
calculating at this time. Therefore, the Client agrees not to
offer employment to any employee or subcontractor of CRG, nor
to allow any officer or director of Client to offer such
employment with Client or any other Company with whom officers
and directors of Client are employed or hold a financial stake
for a period of three (3) years.

IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.

CORPORATE RELATIONS GROUP, INC.

BY:
Joseph H. Landis
President

AQUA CLARA BOTTLING & DISTRIBUTION

BY:
John McAvoy
President

<PAGE>

EXHIBIT "A"

The Corporate Relations Services to be provided by CRG for a twelve (12) month
period are as follows:

I. ADVERTISING and PRINTING SERVICES

A. MoneyWorld Magazine - Lead Generation mailing (150,000
print run per issue.)
A four-color magazine will be created of which two (2) four page
advertorial will be dedicated to the Client.

Junior Page advertorial in five (5) separate issues of MoneyWorld
Magazine.

B. Growth Industry Report - Four-page, two-color follow-up mail pieces
designed for additional informational purposes, that is mailed to
MoneyWorld respondents. A total of 10,000 will be printed.

C. The Core Broker Program - CRG will produce a core of 8-10
retail brokers, market makers and/or money managers who
will take positions in the stock of "Client". This process
will begin immediately upon CRG receiving the payment as
stipulated in Exhibit "B" and will be completed no later
than a month before mailing occurs. Upon completion,
selection and approval of the Core Broker Group, CRG will
arrange a Core Broker meeting, which will include a show
and tell from the top management of the "Client" in
training of these Core Brokers. The Client will cover all
expenses of the Core Broker meeting. Client will have
prior approval of all expenses and will arrange the
meeting.

D. Public relations exposure to newsletter writers, trade and financial
publications. The Client shall be totally responsible for all travel
expenses for the purpose of due diligence of the Company by financial
newsletter writers and/or brokers. The Client will have total
pre-approval rights on these trips.

E. Inclusion as a featured "Lead Generator of the Month" in
Confidential Fax Alert, and newsletter transmitted by fax
to over 8,000 Brokers.

F. Preparation of a Broker Bullet Sheet to be sent to every
broker who shows interest in working the leads and the
stock.

G. Lead Tracking Summary maintained for all response leads
generated and provided to the "Client" upon request.

H. Press releases - Up to four (4) press releases included
which may be extended at the option of the "Client", at the
Client's expense.

I. Road Shows - Locations to be determined. Client will cover
all expenses of Road Shows. Client will have prior
approval of those expenses.

<PAGE>

J. Advertising on MoneyWorld web site for a period of 60 days
(the advertising will parallel the four (4)-page
advertorial in MoneyWorld magazine).

Introduction to our web site company. Additional assistance is
available to the Client related to web site development and
maintenance.

K. CRG will distribute at its cost the due diligence packages
to all inquiring brokers. The Client shall supply the
necessary materials for this package.

L. CRG targets a minimum of 3% return of qualified investor
leads specifically generated for the Company.

M. Assistance in reviewing documentation to be sent to
brokers.

N. "Client" agrees to send CRG, DTC sheets on a weekly basis.

O. "Client" agrees to provide CRG with a complete shareholders
list on a semi-annual basis.

P. "Client" agrees to provide CRG with a list of Blue Sky
states on their attorney's letterhead.

<PAGE>

EXHIBIT "B"
PAYMENT AGREEMENT
made by and between

AQUA CLARA BOTTLING & DISTRIBUTION

and

CORPORATE RELATIONS GROUP, INC.

THIS AGREEMENT is made this 17th day of November, 1997, and will serve as
confirmation of payment terms for services to be provided AQUA CLARA BOTTLING &
DISTRIBUTION ("CLIENT") whereby CORPORATE RELATIONS GROUP, INC. ("CRG") has
agreed to perform said services as defined in the "Lead Generation / Corporate
Relations Agreement."

TERMS

A. CLIENT will pay to CRG, EIGHT HUNDRED THOUSAND DOLLARS
($800,000 U.S. cy) of which FOUR HUNDRED THOUSAND DOLLARS
($400,000 U.S. cy) is due and payable on December 1, 1997.
The balance is due and payable on May 1, 1998.

B. This Agreement is subject to compliance with the rules of the
Exchanges and Securities Commissions on which Client is listed
and registered.

C. It is understood and agreed by and between the Parties that
the above compensation in U.S. currency, or free trading
shares of the Company, should be paid timely upon execution of
this Agreement. CRG will retain the option, but is not
compelled to begin its performance under this Agreement prior
to the payment of such compensation in U.S. currency or free
trading shares.

D. In the event of termination of this Agreement by the Client,
CRG shall be fully released and forever discharge by the
Client from any further obligations or liabilities after
proving such mitigating damages with respect to the "Lead
Generation / Corporate Relations Agreement", with the
exception of liabilities arising from CRG's own negligence,
during the term of this Agreement. Concurrently, Client shall
be fully released and forever discharged by CRG from any and
all obligations of further payments or liabilities with
respect to the "Lead Generation / Corporate Relations
Agreement." This release in no way affects paragraph 7, page
2 of the "Lead Generation / Corporate Relations Agreement."

E. Shares shall be made free trading through the registration
that is mutually agreed upon by the "Client's" attorney and
CRG's attorney.

F. Client shall issue options to CRG as outlined below.

Amount Price Duration

50,000 shares at $3.50 One (1) year
from the date of this Agreement

<PAGE>

50,000 shares at $4.20 Two (2)
years from the date of this Agreement
50,000 shares at $4.70 Three (3)
years from the date of this Agreement
50,000 shares at $5.60 Four (4)
years from the date of this Agreement
50,000 shares at $7.00 Five (5)
years from the date of this Agreement

G. The Client further agrees to issue immediately at no cost to
CRG, 100,000 common shares of 144 Restricted stock; (1) the
-------
shares shall be returned in full if the Client completes the
appropriate registration for the above mentioned options
within 120 days from the signing of this contract; (2) Should
---
the Company fail to affect the appropriate registration within
the aforementioned time, the Company and CRG agree that CRG
shall be entitled to keep all 100,000 shares of 144 Restricted
-------
Stock and the shares will become the property of CRG and be
considered additional payment of this agreement. It is
further agreed that CRG will have piggyback registration
rights to register the aforementioned stock on any future
registration at the Company's expense.

IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.

CORPORATE RELATIONS GROUP, INC.

BY:
Joseph H. Landis Witness
President

AQUA CLARA BOTTLING & DISTRIBUTION

BY:
John McAvoy Witness
President

<PAGE>

EXHIBIT "C"

AQUA CLARA BOTTLING & DISTRIBUTION hereby designates the following person or
persons to act on its behalf for purposes of signing off on all copies pursuant
to Paragraph 4 of this Corporate Relations Agreement. CRG may rely upon the
signature of any of the following:

DIRECTOR (PLEASE SIGN) DIRECTOR (PLEASE PRINT)

PRESIDENT (PLEASE SIGN) PRESIDENT (PLEASE PRINT)

VICE PRESIDENT (PLEASE SIGN) VICE PRESIDENT (PLEASE PRINT)

Pender Newkirk & Company
Certified Public Accountants
100 South Ashley Drive
Suite 1650
Tampa, Florida 33602

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in the prospectus constituting part of the
Registration Statement on From SB-2, and any amendments hereto, to be filed by
Aqua Clara Bottling & Distributing, Inc. of our Auditors' Opinion dated January
9, 1998, accompanying the Financial Statements of Aqua Clara Bottling &
Distributing, Inc. and Subsidiary as of March 31, 1997, and to the use of our
name under the caption "Experts" in the Prospectus.

Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida

<PAGE>