Purchase Agreement

This Purchase Agreement (this "Agreement"), dated as of the 15th day of February
2000, among:

(1)  Furst-McNess  Company, an Illinois corporation  operating under the laws of
     the United States ("Purchaser"), and

(2)  Hyaton  Organics  Inc., a subsidiary  of Kafus  Industries  Ltd., a British
     Columbia  corporation,  operating  under  the  laws  of the  United  States
     ("Supplier").


                              W I T N E S S E T H:

WHEREAS,  Supplier is developing the Facility to produce Organic  Products (such
terms and all other capitalized terms used herein having the respective meanings
set forth in Section 1).

WHEREAS,  Supplier  desires to obtain a contract  for the purchase of the annual
production of the Facility.

WHEREAS, Purchaser desires to purchase and distribute the Organic Products.

NOW  THEREFORE,  in  consideration  of the premises and the mutual  promises and
agreements herein expressed, and for other good and valuable consideration,  the
receipt  and  adequacy  of which is hereby  acknowledged,  the  parties  hereto,
intending legally to be bound, hereby agree as follows:

SECTION 1.  Definitions

     Unless  otherwise  specified  herein,  the  following  terms shall have the
     meanings  specified below.  The singular shall include the plural,  and the
     masculine shall include the feminine and neuter,  as the context  requires.
     "Includes" or "is including" shall mean  "including",  but not limited to."
     All  definitions  of  agreements  shall include all  amendments  thereto in
     effect from time to time.

     "Agreement" means this Purchase Agreement.

     "Contract  Price"  means  the  price  per Unit of  product  sold  hereunder
     determined in accordance with Section 4.2.

     "Cure Provision Period" has the meaning set forth in Section 6.3.

     "Dollars" and "$" means lawful currency of the United States.

     "Facility" means the plant to be developed, financed, constructed and owned
     by the Supplier at a site in Merry Hill, North Carolina.

     "Final  Completion  Date" means the date when the  following  condition  is
     satisfied:  Supplier's  construction contractor certifies that the Facility
     has completed performance testing and has performed to the degree necessary

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     to  constitute   substantial  completion  (or  its  equivalent)  under  the
     construction  contract and is capable of  producing  annually not less than
     the volumes prescribed in Schedule A.

     "Financial   Closing"  means  the  execution  and  delivery  of  definitive
     documentation  for the financing of all costs of construction,  procurement
     and equipping of the Facility which will not be financed by Supplier or its
     affiliates.

     "Force Majeure" has the meaning set forth in Section 9.

     "Initial Delivery Date" has the meaning specified in Section 2.4.

     "Initial,  Basic and Operating Terms" mean the periods described in Section
     2.1.

     "Mechanical  Completion  Date" means the date which Supplier and Supplier's
     construction  contractor  agree is the  date  that  the  Facility  has been
     completed  to the  extent  necessary  to  begin  start-up  and  performance
     testing.

     "Minimum Purchase Price" has the meaning specified in Section 4.1(b).

     "Product" means Organic  Products meeting the  Specifications  set forth in
     Section 8.0 and produced using  technology of Hyaton  Organics Inc.,  which
     technology is, as of the date of this Agreement, proprietary.

     "Purchase Order" has the meaning specified in Section 3.3(a).

     "Required  Annual Amount" means the amount of product in tons as set out in
     section 3.1 (b), or if less,  the maximum  that the Facility can product in
     any given Contract Year.

     "Selling Price" has the meaning set forth in Section 4.1.

     "Shipment"  means  product  identified  on a single  invoice and shipped to
     Purchaser pursuant to this Agreement.

     "Specifications"  means, with respect to Product,  the  specifications  set
     forth in Section 8.0

     "Term" means, collectively, the Initial Term, and the Operating Term.

SECTION 2.  Term; Development of Facility

2.1  Basic Term

(a)  This Agreement  shall be effective from the date hereof and, unless earlier
     terminated in accordance with this Agreement,  continue until the fifth (5)
     anniversary of the Final  Completion  Date. The period from the date hereof
     until the Final  Completion Date is herein called the "Initial  Term".  The
     period from the date following the Final  Completion  Date to the fifth (5)
     anniversary  of the Final  Completion  Date is herein called the "Operating
     Term".

(b)  At least six (6) months prior the  expiration  of the Operating  Term,  the
     parties may agree to renew this  Agreement for an additional  five (5) year
     term,  starting Final Completion Date on the terms of the initial Agreement
     or under new terms agreed by both parties.

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(c)  Notwithstanding  Paragraph  (b) above,  if the parties  have not reached an
     agreement,  Supplier  will be  entitled  to seek  arrangements  with  other
     parties for the  marketing of Products.  Supplier  will not contract with a
     third  party on better  terms  without  first  offering in writing the same
     terms and conditions to Purchaser.  Purchaser  shall have fifteen (15) days
     from receipt of such notice to accept or reject the third party  offer.  If
     Purchaser declines, Supplier upon six (6) months notice may contract with a
     third party.

(d)  Notwithstanding  Paragraph (c) above,  Supplier shall fulfill forward sales
     orders placed by Purchaser as under the original terms of the Agreement.

2.2  Construction Progress

     Supplier  agrees to keep  Purchaser  informed  periodically  of progress in
     construction  of the Facility and to notify  Purchaser  immediately  of any
     changes in the construction schedule that materially affect the anticipated
     Initial Delivery Date.

2.3  Financial Closing

     Should  Financial  Closing not have occurred  within two (2) years from the
     execution of this  Agreement,  Purchaser  may terminate  this  Agreement by
     written  notice of intent to  terminate  given not less than six (6) months
     prior to the effective date of termination; provided, however, that:

(a)  Supplier shall have the right to extend the deadline for Financial  Closing
     on one or more successive  occasions for up to three  additional  months in
     the  aggregate,  by notice to  Purchaser  given on or prior to the  initial
     deadline for Financial  Closing or any subsequent  deadline then in effect,
     which  notice  shall state that  Supplier is  diligently  and in good faith
     working to consummate  Financial Closing and such extension is necessary to
     enable Financial Closing to occur based upon a term sheet for all necessary
     Facility  financing  having  been  executed  by  Supplier  and the party or
     parties providing financing, and;

(b)  Termination shall not be effective if Financial Closing occurs on or before
     the date  Termination  otherwise  would  become  effective  pursuant to the
     notice given by  Purchaser.  Any  extension  of the deadline for  Financial
     Closing shall cause a corresponding extension of the deadline for the Final
     Completion Date set forth in Section 2.5.

(c)  In the event that  Purchaser  terminates  the Agreement as outlined  within
     this  Section  2.3,  then  Supplier  shall  reimburse   Purchaser  for  all
     reasonable  marketing  expenses  agreed  to  by  the  parties  incurred  by
     Purchaser in anticipation of supply of Product from the Supplier.

2.4  Initial Delivery Date

(a)  After the  Mechanical  Completion  Date but  prior to the Final  Completion
     Date,  when the  Facility  is  capable of  producing  Product  meeting  the
     Specifications,  Supplier shall notify  Purchaser and designate the date of
     anticipated  shipment of the first  quantities of Product to Purchaser (the
     "Initial Delivery Date").

(b)  Should the Mechanical  Completion  Date not have occurred within the period
     of 12 months  after the date of  Financial  Closing  (as such period may be
     extended in  accordance  with Section 2.3),  Purchaser  may terminate  this
     Agreement by notice to Supplier of intent to terminate  given not less than

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     30 days prior to the  effective  date of  termination;  provided,  however,
     that:

     i.   Supplier  shall have the right to extend the deadline  for  Mechanical
          Completion  Date on one or  more  successive  occasions  for up to six
          additional months in the aggregate, by notice to Purchaser given on or
          prior to the initial  deadline for Mechanical  Completion  Date or any
          subsequent  deadline  then in effect,  which  notice  shall state that
          Supplier,  and Supplier's  contractor are diligently and in good faith
          working to complete the construction of the Facility to the point when
          the Mechanical Completion Date will be deemed to have occurred; and,

     ii.  Termination  shall not be effective if the Mechanical  Completion Date
          occurs  on or  before  the date  termination  otherwise  would  become
          effective pursuant to the notice given by Purchaser.

2.5  Final Completion Date

     Should the Final  Completion Date not have occurred within the period of 18
     months after the date of Financial  Closing (as such period may be extended
     in accordance with Section 2.3),  Purchaser may terminate this Agreement by
     notice to Supplier of intent to terminate given not less than 30 days prior
     to the effective date of termination; provided, however, that:

     (a)  Supplier  shall  have the  right to  extend  the  deadline  for  Final
          Completion  Date on one or  more  successive  occasions  for up to six
          additional months in the aggregate, by notice to Purchaser given on or
          prior to the initial deadline for Final Completion Date or any

     (b)  subsequent  deadline  then in effect,  which  notice  shall state that
          Supplier,  and Supplier's  contractor are diligently and in good faith
          working to  complete  the  construction  of the  Facility to the point
          Final  Completion  Date will be deemed to have  occurred  and that the
          Facility is substantially complete; and,

     (c)  Termination shall not be effective if the Final Completion Date occurs
          on or before the date  Termination  otherwise  would become  effective
          pursuant to the notice given by Purchaser.

SECTION 3. Sale and Purchase

3.1  Sale and Purchase

     (a)  Subject to the terms and  conditions  herein set forth,  commencing on
          the Initial Delivery Date,  Supplier agrees to sell to Purchaser,  and
          Purchaser  agrees to market and purchase  from  Supplier,  all Product
          manufactured at the Facility during the Operating Term and all Product
          manufactured  at the  Facility  during  any  Contract  Year  up to the
          Required Annual Amount for each Contract Year.

     (b)  The Required Annual Amount for the duration of this contract estimated
          by Supplier are as follows: (Schedule A)

                             Year 1         15,000 (short tons-2000 lbs.)
                             Year 2         30,000 short tons
                             Year 3-5       50,000 short tons

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3.2  Distributorship

     Purchaser  shall use all  reasonable  efforts and due diligence to promote,
     market  and  distribute  Product  and  at its  own  expense  shall  provide
     aggressive,  dedicated,  continuous sales representation by means of actual
     sales personnel contact with existing and prospective customers of Product.
     Supplier and Purchaser shall establish a co-operative program pertaining to
     the  establishment  of  the  Products'   trademarks  and  subsequent  media
     promotion  thereof.  Costs  pertaining  directly to product  and  trademark
     development  as well as  direct  brand  media  spending  will be  borne  by
     Supplier. Supplier and Purchaser shall communicate as required and at least
     semi-annually  the parties shall have a joint marketing  meeting to be held
     at  a  convenient  location  for  the  parties.  In  connection  therewith,
     Purchaser shall, among other things at its own expense;

     (i)  respond to all inquiries concerning Product,

     (ii) maintain  sufficient  equipment,  and hire and  maintain a sales staff
          sufficient  in number  and  qualifications  to  aggressively  promote,
          distribute and sell Product, and

     (iii)develop in  conjunction  with Supplier from time to time and implement
          such advertising  strategies for Product as necessary and agreed to by
          the  parties.  Within  15  business  days  following  the  end of each
          calendar month,  Purchaser shall deliver to Supplier a sales report in
          a form satisfactory to both parties.

3.3  Purchase Orders

     (a)  In order to  accommodate  the  continuous  production  process  of the
          Facility,  Purchaser  shall confer with Supplier to establish  monthly
          Product  Purchase Order  requirements at intervals of six months,  two
          months and one month.  Purchaser shall deliver to Supplier  individual
          purchase  orders covering each month's  shipments at least  twenty-one
          (21) days in advance  of the  desired  shipping  date  specifying  the
          Selling  Price,  packaging  requirements  of the  Product  required by
          Purchaser  (each,  a  "Purchase  Order").  To the extent  practicable,
          Supplier will use its best efforts to accommodate  Purchase  Orders on
          shorter  notice as may be required from time to time,  but in no event
          shall  Purchaser  request  changes to such Purchase Order less than 48
          hours prior to expected delivery from the Facility.

     (b)  All Product  purchased by  Purchaser  shall be shipped in such lots as
          the parties may agree.

     (c)  All  monthly  Product  requirements  as  previously  agreed  to by the
          Purchaser will be transported  from the Facility  during the month. In
          the event that contracted Product is not removed from the Facility,  a
          storage charge will be levied to the Purchaser.

     (d)  Supplier  shall  invoice each  shipment at the time of delivery to the
          carrier.  Invoices shall include the Purchase Order Number,  quantity,
          types of product, selling price and any applicable taxes.

3.4  Additional Features

     The parties  agree to discuss on an ongoing basis  different  varieties and
     packaging forms for the Product and other additions or deletions that would
     provide  additional  revenue  benefits to the Supplier and  Purchaser.

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3.5  Delivery

     All Product  Purchase  Orders are F.O.B.  Facility by the  Purchaser's  own
     carrier or contracted carrier at the Purchaser's expense.

SECTION 4. Pricing

4.1  (a) Selling Price

     With respect to any Product  purchased by Purchaser and sold by Supplier to
     Purchaser  hereunder,  the "Selling Price" for each Purchase Order shall be
     the price at which the  Purchaser,  exercising its best efforts to maximize
     price,  has resold the Product to the end user, which is the subject of the
     Purchase  Order.  In the event Product  purchased by Purchaser has not been
     pre-sold by Purchaser,  the minimum purchase price (4.1(b)) will be applied
     to the  subject  Product.  If the  actual  selling  price  received  by the
     Purchaser from the end user is higher than the minimum  purchase price, the
     entire amount shall be recalculated  and adjusted in favour of the Supplier
     and will be credited in the next month's reconciliation statement.

4.1  (b) Minimum Purchase Price

     A guaranteed  minimum  purchase price F.O.B.  Facility is to be established
     annually  on  each  anniversary  date  of the  Agreement  to the  Purchaser
     (Schedule B).

4.2  Basis of Payment

     Purchaser  will  provide a  statement  on a  monthly  basis  showing  total
     volumes, revenues and costs (defined under Net Selling Price below) for all
     Products  sold or  stored  within  ten (10)  days of the  previous  monthly
     period.  The statement  will be  accompanied  by payment from  Purchaser to
     Supplier for the amount due for all Product  purchased  and  received  from
     Supplier during the preceding  monthly period.  Any Product shipped that is
     not  pre-sold as set out in (4.1),  will be invoiced  to  Purchaser  at the
     Minimum  Purchase  Price (4.1 (b)) at month end and will be due for payment
     within 15 days.

     Percentage  revenues  (commission)  to Purchaser shall be calculated on the
     Net Selling Price (as per the schedule below) and payment will be forwarded
     to Purchaser from Supplier within f15 days of receipt of statement and full
     payment from Purchaser.

     Commission  Revenue payment to Purchaser from the Supplier for the Products
     purchased during the previous month will be based on the following table:

                             Net Selling Price       % to Purchaser

        (a) Fertilizers             (1)                     (1)
                                    (1)                     (1)
                                    (1)                     (1)

        (b) Growing Media           (1)                     (1)
                                    (1)                     (1)
                                    (1)                     (1)
        * short ton (2000 pounds)

(1)  Confidential  portion  has  been  omitted  and  filed  separately  with the
     Commission.

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     NET  SELLING  PRICE  shall be defined  as the sale price of the  Product to
     Purchaser's  customers (end user) after deducting all direct costs relating
     to the  customers'  orders for freight,  storage,  interest  carrying cost,
     handling  and custom  cost  actually  incurred by  Purchaser  but shall not
     include Purchaser's overhead or fixed cost (Schedule C).

     Purchaser  shall be entitled to set selling  prices but shall keep Supplier
     informed of its pricing structure.

4.3  Product Only

     All prices  under this  Agreement  are for Product  only and do not include
     technical data,  proprietary  rights of any kind, or patent rights, and any
     packaging other than normal domestic commercial packaging, unless expressly
     agreed to in writing by the Supplier.

SECTION 5. Title and Risk of Loss

     Title  and  risk of loss  for all  product  sold  hereunder  shall  pass to
     Purchaser  upon  delivery  onto  Purchaser's  or  Purchaser's   contractors
     equipment at the  Facility  and the sale by Supplier to  Purchaser  will be
     complete  upon such  delivery,  Purchaser  being  deemed  to have  accepted
     delivery thereof.

SECTION 6. Default.

6.1  Default

     Notwithstanding anything herein contained,  either party may terminate this
     Agreement upon written notice to the other party in the event that;

     (a)  such other party  commits a breach  (other than a breach  which in all
          the circumstances is insignificant) of any provision of this Agreement
          (which notice must specify in reasonable detail the breach or breaches
          complained of);

     (b)  Supplier decides to close the Facility producing the Product;

     (c)  Such other party becomes the subject of any bankruptcy,  insolvency or
          similar proceedings;

     (d)  Any legislation, regulations, policy, ruling or decision of a Federal,
          State  or  Municipal   government   or  of  any  agency   thereof  are
          implemented,  repealed  or altered  in such a way as to  significantly
          prevent either party from lawfully exercising its rights or performing
          its obligations hereunder.

6.2  Remedies

     Upon the occurrence and during the  continuation of any default  hereunder,
     the party not in default shall have the right:

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     (a)  to give written  notice of the party's  intention  to  terminate  this
          Agreement  and  thus  begin  the  Cure  Provision   Period   effective
          immediately upon the other party's receipt of such notice; and

     (b)  to pursue  any other  remedy  given  under  this  Agreement  or now or
          hereafter existing at law or in equity or otherwise.

6.3  Cure Provision Period

     Upon written notice being received by either party of the other's intention
     to terminate,  a Cure Provision  Period of 30 days from the date of receipt
     of such notice shall commence.  During this period, the party receiving the
     notice will have the  opportunity  to correct the situation  giving rise to
     the  termination  notice and to make  current any amounts past due that may
     have arisen from such  situation.  Failure to correct (or in the event such
     correction cannot by its nature be accomplished  within 30 days, failure to
     start and  diligently  proceed to correct)  the  situation  during the Cure
     Provision  Period or the waiving of the Cure Provision  Period by the party
     in receipt of the  termination  notice will result in the  notifying  party
     having the right to terminate the Agreement immediately.  In the event of a
     correction which cannot be accomplished within 30 days, and notwithstanding
     the immediately  preceding  sentence,  either party shall have the right to
     invoke the remedies  specified in Section 6.2 above if a default  continues
     for more than 90 days following the defaulting party's receipt of notice of
     termination.

SECTION 7. Warranty; Indemnification; Insurance.

7.1  Warranty

     Supplier warrants to Purchaser that all Product sold to Purchaser hereunder
     shall be free and clear of liens,  claims,  encumbrances,  and restrictions
     against sale of any type or nature not  authorized by this  Agreement,  and
     shall at the time of delivery to the carrier conform to the  Specifications
     and the descriptions  thereof in the Purchase Order covering the product in
     question.

7.2  Indemnification

     Each of the  parties  hereto  covenants  and agrees to  indemnify  and hold
     harmless the other against and from any and all liability,  damages, losses
     and  costs  (including  without  limitation   reasonable  attorneys'  fees)
     suffered  or incurred by such other party as a result of any breach of this
     Agreement  by the other  party other than any  negligent  act or neglect of
     itself, its servants, employees, agents, invitees, or licensees,  including
     liability for injury or damage to any person or property.

7.3  Liability Insurance

     Supplier and Purchaser shall each provide and keep in force,  comprehensive
     general  liability  insurance  in  respect  of  personal  injury,  death or
     property damage with generally accepted insurance carriers as are customary
     for risks of this  nature and with  minimum  amounts of  $5,000,000.00  per
     occurrence  and  each  party  will  provide  to the  other,  proof  of such
     insurance and renewal thereof, upon request.


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SECTION 8. Product Features

8.1  Product Specifications

     The  Products  sold under the "Truly  Organic"  brand name are pure organic
     fertilizers  and pure organic  growing media  (substrates)  that contain no
     chemical additives and are formulated on a bio-modulated release basis. The
     Products are produced from selected  organic waste materials that have been
     aerobically processed under specific, optimally controlled conditions.

     The Products  will be formally  certified by a recognized  national  and/or
     state  organic  certification  body,  such as OMRI (The  Organic  Materials
     Review  Institute)  and/or any other  regulatory body required by law where
     the Product is sold.

     (i)  Growing Media:

          Professional-All Purpose Mix      -consumer retail market
                                            -ready-to-use
                                            -complete multi-purpose blend
                                            -packaged in multi-color, laminated,
                                             re-sealable bags

     (ii) Fertilizer

          MTO (Magic  Touch   Organic)      -consumer retail market
                                            -pelletized pure organic fertilizer
                                            -general purpose use
                                            -packaged in multi-color, laminated,
                                             re-sealable bags

     (iii)Compost - detailed  specifications  and packaging  shall be determined
          and agreed to by the parties acting  reasonably and attached hereto as
          a schedule prior to production of same.

     (iv) Enhanced Growing Media - detailed  specifications  and packaging shall
          be  determined  and agreed to by the  parties  acting  reasonably  and
          attached hereto as a schedule prior to production of same

     Dependant on market  demands and  conditions,  the Supplier in  conjunction
     with the Purchaser  will develop other products and packaging to meet other
     markets' and customers' needs.

8.2  Product Claims

     Purchaser  agrees to service all claims made or submitted by its  customers
     arising  out of the  sale of  Product  under  this  Agreement  in the  best
     interests of Supplier;  provided, however, that claims in excess of $500.00
     shall not be settled by  Purchaser  without the prior  written  approval of
     Supplier, which approval shall not be unreasonably withheld or delayed. For
     claims under $500.00,  Purchaser  shall settle the claim in accordance with
     this Section 8.2, and an  adjustment  shall be made by Supplier in the next
     regularly prepared billing statement to reflect such settlement and payment
     by Purchaser.  For claims over $500.00,  Purchaser  shall  promptly  notify
     Supplier of such claim and upon  settlement  agreement,  Supplier shall pay
     for such claim directly.

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SECTION 9. Force Majeure

     If any cause reasonably  beyond the control of either party,  including but
     not limited to fire, tempest,  earthquake,  inclement weather,  Act of God,
     power interruption,  fuel shortage, strike, lockout or other labor dispute,
     riot or civil commotion,  act of public enemy or enactment,  rule, order or
     act  of  government  or  governmental  agency,  prevents  such  party  (the
     "defaulting  party") from  complying  with any provision of the  Agreement,
     then the defaulting  party shall be excused from complying while such cause
     continues to prevent the defaulting party from so complying for a period of
     forty-five (45) days.

     Where  non-compliance  by the defaulting party continues beyond  forty-five
     (45) days and relates to a material term or terms of this  Agreement,  then
     the other party shall have the option to terminate this Agreement effective
     upon giving written notice of termination to the defaulting party.

SECTION 10. General Provisions.

10.1 Entire Agreement

     The provisions of this Agreement and the Schedules  attached hereto contain
     the entire  agreement  between  the  parties  concerning  the  transactions
     contemplated  herein and supersede all prior  agreements or  understandings
     between the parties relating to the subject matter hereof,  written or oral
     and all  prior  agreements  or  understandings,  written  or oral,  between
     Purchaser and Supplier or any of their  affiliates  relating to the subject
     matter  hereof.  The  provisions  of this  Agreement  shall  supersede  any
     provisions,  terms and  conditions  contained on any Purchase  Order (other
     than as to the volumes and sizes on a Purchase Order delivered  hereunder),
     sale order or other writing Purchaser or Supplier may give or receive,  and
     the rights of the parties shall be governed  exclusively by the provisions,
     terms and conditions hereof.

10.2 Successors and Assigns

     This  Agreement  shall  inure to the  benefit  of and be  binding  upon the
     parties  hereto and their  respective  successors  and  assigns;  provided,
     however,  that neither  party may assign any of its duties and  obligations
     hereunder  without  the prior  written  consent of the other  party,  which
     consent  shall  not  be  unreasonably  withheld.  In  no  event  shall  any
     assignment  relieve  the  assigning  party of its  obligations  and  duties
     hereunder or impair the rights of the non-assigning party hereunder.

     Notwithstanding the foregoing,  Purchaser hereby agrees and consents to the
     assignment  of this  Agreement  by Supplier for the purpose of financing or
     refinancing  the Facility.  Such  assignment,  for purposes of financing or
     refinancing, may be to any entities providing debt or credit to Supplier or
     the Facility or any trustee or other  representative  of such  entities and
     the initial  assignees  or  designees  thereof  (but not to any  subsequent
     assignees or designees).

     Notwithstanding the foregoing:

     (a)  Purchaser  agrees to execute and  deliver,  at no expense to Supplier,
          such documents  and/or  instruments  as may be reasonably  required by
          Supplier  or any other  person  providing  financing  or  refinancing,
          including,  without  limitation,   opinions  of  counsel  and  written
          confirmation,  as of date of Financial Closing, of the satisfaction by
          Supplier  of  all  conditions  required  to be  satisfied  under  this
          Agreement as of such date.

<PAGE>

     (b)  Supplier  hereby agrees and consents to Purchaser  contracting  with a
          joint venture between Kafus  Industries  Ltd. or an affiliate  thereof
          and  Purchaser  for the joint  venture to supply  market  development,
          research  and  advertising  services in support of the  marketing  and
          distribution of the Product by Purchaser hereunder; provided, that the
          foregoing  shall  not be  deemed to  relieve  Purchaser  of any of its
          duties or obligations thereunder.

10.3 Amendment

     This  Agreement  may not be  modified or  amended,  nor may the  provisions
     hereof be waived, except in writing signed by the parties hereto.

10.4 No Waiver

     Any  waiver by any party  hereto of any of its  rights  hereunder  shall be
     without prejudice to its future assertion of any such right or of any other
     right hereunder, and any delay in exercising any right shall not operate as
     a waiver thereof or any other right.

10.5 Applicable Law

     This  Agreement  shall be governed by and construed in accordance  with the
     laws of the state of North Carolina.

10.6 Headings

     Section headings used herein are for convenience of reference only, are not
     part of this Agreement and are not to affect the  construction of, or to be
     taken into consideration in interpreting, this Agreement.

10.7 Arbitration

     (a)  All disputes, controversies or differences which may arise between the
          parties,  regardless of value should be first attempted to be resolved
          between the parties in a friendly  manner and only once all reasonable
          attempts at resolving such differences have been exhausted,  or where,
          without immediate resolution to an apparently  unresolvable difference
          will cause significant economic hardship on one of the parties,  shall
          Arbitration be used as a method of dispute resolution.

     (b)  All disputes,  controversies,  claims or  differences  which may arise
          between the parties  hereto out of or in relation to or in  connection
          with this  Agreement or the breach thereof where the amount claimed or
          in dispute is  $1,000,000 or less  (exclusive of costs and  attorney's
          fees and expenses) shall be finally  settled by arbitration  conducted
          in accordance with the Commercial  Arbitration  Rules (the "Rules") of
          the ----- American  Arbitration  Association  ("AAA"), as from time to
          time in effect any and all --- disputes  concerning the suitability of
          any Shipment of the Products  purchased  and sold  hereunder  shall be
          determined  by an  independent  testing  laboratory  with  substantial
          industry  experience.  Whenever  any  dispute,  controversy,  claim or
          difference  which may be submitted to  arbitration  under this Section
          10.7 arises between the parties hereto,  either party hereby may given
          to the other party  hereto  notice,  in  accordance  with Section 10.8
          hereof of its intention to submit such dispute, controversy,  claim or
          difference to arbitration.

<PAGE>


     (c)  Arbitration  shall take place before one  arbitrator  agreed to by the
          parties  or,  in the event  agreement  cannot be  reached  about  such
          appointment,  the  arbitrator  shall be  appointed  by the  AAA.  Once
          appointed, such arbitrator shall be neutral.

     (d)  The parties  hereto agree that all fees and expenses  associated  with
          the  arbitration,  including  attorneys'  fees and expenses,  shall be
          borne by the parties as determined by the arbitration.

     (e)  The  determination of such arbitrators shall be final and binding upon
          the parties to the  arbitration,  and judgment upon the award rendered
          by  arbitrators  may be entered in any court having  jurisdiction,  or
          application may be made to such court for a judicial acceptance of the
          award and an order of enforcement, as the case may be. The arbitrators
          shall set forth the grounds for their decisions in the award.

     (f)  The  place of  arbitration  shall be in  Raleigh,  North  Carolina  if
          Arbitration  is initiated by Purchaser and in Raleigh,  North Carolina
          if Arbitration is initiated by Supplier.

10.8 Notices

     All notices and other communications given hereunder must be in writing and
     may be sent by personal delivery,  by overnight courier or delivery service
     for which a  delivery  receipt  can be  obtained,  by  facsimile  for which
     receipt is confirmed or by certified mail, return receipt requested (or the
     functional  equivalent)  to any party at the  address  of the  party  shown
     below.  Any party hereto may change its address by giving notice in writing
     to the other party or parties of such change.

                      if  to Supplier:

                      Hyaton Organics Inc.
                      2285 St.Laurent Blvd.
                      Bldg. C16
                      Ottawa, Ontario
                      Canada
                      K1G 4Z6

                      Attention:    President
                      Telephone:    613-738-0887
                      Facsimile:    613-738-4406


                      if to Purchaser:

                      Furst-McNess Company
                      2100 Oxford St. E.
                      Suite 39
                      London, Ontario
                      Canada
                      N5V 4A4

                      Attention:    Vice President
                      Telephone:    519-659-8600
                      Facsimile:    519-659-1600

<PAGE>


                      Copy:  Furst-McNess Company
                             120 East Clark Street
                             Freeport, Illinois 61032
                             United States

                             Attention;     President
                             Telephone:     815-232-9700
                             Facsimile:     815-232-9765

     All  notices  and  other  communications  given  to  any  party  hereto  in
     accordance  with the  provision of this  Agreement  shall be deemed to have
     been given on the date of receipt if delivered by hand or overnight courier
     service or sent by  facsimile,  or on the date five (5) Business Days after
     dispatch by certified or registered mail if mailed.

10.8 Partial Invalidity

     The  unenforceability  or  invalidity  of any term or  provision  contained
     herein,  or of any  portion  thereof,  shall not  affect  the  validity  or
     enforceability of any other term or provision,  or portion thereof,  herein
     contained.

10.9 No Agency Relationship

     Nothing  contained  in this  Agreement  shall be  construed as creating any
     agency, joint venture or partnership between the parties.  Each party shall
     at all times be an independent contractor under this Agreement.

10.10 Non-Disclosure and Confidentiality

     Supplier  acknowledges  that,  by reason of the  Agreement,  it will become
     privy to  confidential  information  belonging to Purchaser,  including the
     identities of Purchaser's  customers,  agents and  contractors  and pricing
     information.  Supplier  agrees that it will not,  without the prior written
     consent  of  Purchaser,  disclose  to any  third  party  or use for its own
     benefit any such confidential  information either during the continuance of
     the Agreement or thereafter.

     Purchaser   acknowledges   that  it  shall  become  privy  to  confidential
     information such as production forecasts and other information belonging to
     Supplier.  Purchaser  agrees that it will not,  without  the prior  written
     consent of Supplier, disclose to any third party or use for its own benefit
     any such  confidential  information  either during the  continuance  of the
     Agreement or thereafter.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective  officers  thereunto duly authorized as of the
date first written above.

                             Hyaton Organics Inc.


                             By:    ____________________________________

                             Name:  Robert Novitsky

                             Title: President

<PAGE>

                             Furst-McNess Company


                             By:    ____________________________________

                             Name:  Jack Smit

                             Title: Vice President, New Business Development


<PAGE>



Schedule A


REQUIRED ANNUAL AMOUNT

Short tons (2000 pounds)



                              TOTAL                         GROWING
                            PRODUCTION       FERTILZER       MEDIA

               YEAR 1        15,000             5,000        10,000
               YEAR 2        30,000            10,000        20,000
               YEAR 3-5      50,000            17,000        33,000


<PAGE>


Schedule B


MINIMUM PURCHASE PRICE - FOB FACILITY

                                                      $US per Short Ton
I.      GROWING MEDIA

           Professional/All-Purpose Mix               $_____ per ton  (1)

II.     FERTILIZERS

           MTO (Magic Touch Organic)                  $_____ per ton (1)


(1)  Confidential  portion  has  been  omitted  and  filed  separately  with the
     Commission.

<PAGE>


Schedule C


NET SELLING PRICE DEFINITION

A.      PRICE TO PURCHASER'S CUSTOMER = ($000)

           LESS

B.      DIRECT COSTS:
          1.      Freight cost to customer from shipping point
          2.      Handling
          3.      Customs
          4.      Storage*
          5.      Interest carrying cost for prepayment of account over 30 days

            EQUALS

C.      NET SELLING PRICE


     *Monthly storage charge including in and out charges at public  warehousing
     facilities.

     Note: Purchaser's overhead and fixed costs not included.