AGREEMENT

This  Agreement  is by and  between  Ethika  Corporation,  (Ethika)  and  Alanco
Environmental Resources Corporation (Alanco).

WHEREAS,  Ethika is the lessor of certain equipment lease wherein Fry Guy, Inc.,
a wholly owned subsidiary of Alanco is the lessee (the Ethika - Fry Guy Leases);
and

WHEREAS,  Ethika and Alanco  desire that as set forth below,  Ethika assign unto
Alanco all right,  title and  interest  it has in the  Ethika-Fry  Guy Leases in
consideration of the below described payment and promissory note.

THEREFORE, Ethika and Alanco agree as follows:

1. Assignment of Ethika-Fry Guy Leases. Within two days of the execution of this
Agreement by both Parties,  Ethika shall tender to Alanco the  Assignment of the
Ethika-Fry Guy Leases attached hereto as Exhibit A.

2.  Payment  and  Promissory  Note.  Within  two days of the  execution  of this
Agreement  by both  Parties,  Alanco  shall  tender  to Ethika  $12,000  and the
Promissory Note attached hereto as Exhibit B.

3.  Representation  and Warranties of Ethika.  Ethika  represens and warrants to
Alanco that it is and has been the Lessor of the  Ethika-Fry Guy Leases and that
said  Leases  are free and  clear of all  liens  and  encumbrances  and that the
assignment  of said  Leases as set forth in this  Agreement  does not  breach or
cause a default  upon any  contract  or  agreement  to which  Ethika is a party.
Furthermore,  Ethika represents and warrants that it has all requisite corporate
power and authority to execute and perform this  Agreement  which have been duly
authorized by the Board of Directors of Ethika.

4. Representations  and Warranties of Alanco.  Alanco represents and warrants to
Ethika that it has all  requisite  corporate  power and authority to execute and
perform this Agreement  which have been duly authorized by the Board of Director
of Alanco.

5.  Governing  Law.  This  Agreement and the legal  relations  among the Parties
hereto  shall be governed by and  construed in  accordance  with the laws of the
State or Arizona  and that the State or Federal  Courts of Arizona  shall be the
jurisdiction in which any legal proceedings  relative to this Agreement shall be
brought.

6. Entire Agreement.  This Agreement, including the other documents  referred to
herein, embodies the entire agreement and understanding of the Parties hereto in
respect of the  subject  matter  contained  herein.  There are no  restrictions,
promises,  warranties,  convenants, or undertakings,  other than those expressly
set forth or referred to herein. This Agreement  supercedes all prior agreements
and understandings between the Parties with respect to such subject matter.

Executed By the Parties Hereto As of the Dates Indicated:

ETHIKA CORPORATION                   ALANCO ENVIRONMENTAL
                                     RESOURCES CORPORATION


/s/DENNIS BROVARONE                  /s/ROBERT R. KAUFFMAN
   Dennis Brovarone, President          Robert R. Kauffman,
   March 12, 1999                       Chairman & CEO
                                        March 12, 1999


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EXHIBIT A
                            ASSIGNMENT

FOR VALUE  RECEIVED,  Ethika  Corporation  hereby sells,  assigns and conveys to
Alanco Environmental Resources Corporation:

All right, title and interest it has in and to those certain equipment leases by
and between Ethika  Corporation and Fry Guy, Inc.,  including but not limited to
all right, title and interest it has in the equipment subject to said leases.


WITNESS my hand and seal this 12th day of March, 1999.

                         Ethika Corporation

                      /s/DENNIS BROVARONE
                         Dennis Brovarone, President


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Exhibit B
                                 PROMISSORY NOTE

$128,000                                                          March 12, 1999

Alanco  Environmental  Resources  Corporation  (the Promisor) for value received
does  promise  to pay to the order of Ethika  Corporation  (the  Holder)  at the
office of its  attorney,  Dennis  Brovarone,  11249 W. 1O3rd  Dr.,  Westminster,
Colorado,  ONE HUNDRED TWENTY EIGHT THOUSAND DOLLARS  ($128,000.00),  in sixteen
monthly installments of EIGHT THOUSAND DOLLARS ($8,000) beginning April 15, 1999
and continuing thereafter on the fifteen day of each month through July 2000.

In the event the fifteen of any month is a weekend or holiday, the payment shall
be due on the next business day. In the event payment is not received on its due
date, the Holder shall promptly notify the Promisor of such  non-reciept and the
Promisor shall have three  business days in which to tender the payment  without
the occurance of a default.

It is  further  agreed  that if any  payment  is not made  when due and  remains
uncured  following the above notice,  a penalty in the amount of THIRTY THOUSAND
DOLLARS $30,000) shall become due and owing, all remaining payments shall become
immediately  due and owing and the entire  default  principal  shall  thereafter
accrue  interest at the rate of eighteen  percent (18%) per annum.  The Promisor
also agrees to pay all  reasonable  costs of  collection,  including  reasonable
attorneys fees.

This Promissory Note shall be construed and enforced in accordance with the laws
of the United  States and the State of Arizona  without  regard to  conflicts of
law. In the event that any dispute  should arise  pertaining to this  Promissory
Note,  the  Parties  agree  that  jurisdiction  shall  vest only in the state or
federal courts located in Scottsdale, Arizona in order to resolve such dispute.

ALANCO ENVIRONMENTAL RESOURCES CORPORATION
(the Promisor)

/s/ROBERT R. KAUFFMAN
By: Robert R. Kauffman, Chairman & CEO

/s/JOHN A. CARLSON
   John A, Carlson, Senior V.P. & CFO
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