EXHIBIT 10(mmmm)


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                                   ----------

                               TIREX AMERICA INC.

                                   ----------

                     EQUIPMENT LEASE AND PURCHASE AGREEMENT

                                   ----------

  Equipment Lease and Purchase Agreement, made this 8th day of May 1997, among

                               Recycletron Inc.
                               770, rue Mill
                               Montreal, Quebec
                               H3C 1Y3
                               Tel: (514) 937-9565
                               Fax:  (514) 933-1575

                                                            (the "Operator")

                                       and

                               Tirex America Inc.
                               740 St. Maurice, Suite 201
                               Montreal, Quebec H3C 1L5
                               Tel: (514) 878-0727; Fax: (514) 878-9847

                                                            (the "Manufacturer")

1.   DEFINITIONS

     1.1 "Acceptance  Date" shall mean the first day following the completion of
the Test Period.

     Delivery  Date shall mean end of second  quarter 1998 or such other date as
the parties hereto shall mutually agree.


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     1.3  "Leased  Proprietary  Equipment"  shall  mean  all  of  the  following
constituent,   integral  parts  of  the  TCS-1  System  and  all  substitutions,
replacements,  and  improvements,  and all repair and  renewal  parts  installed
therein,  as specified  in the plans and  specifications  therefor,  attached as
Schedule 1.3 hereto:

     (a) the  disintegration  system  including  but not limited to all grinders
contained therein, and

     (b) the separation systems, including but not limited to

          (i)  a magnetic separator;

          (ii) a fiber/crumb separator;

          (iii)fiber collector

          (iv) crumb rubber sizing  system;  and all  integrated  conveyance and
               exit belts, chutes, and other components

     1.4 "Maintenance  Agreement"  shall mean the maintenance  agreement of even
date  herewith  between  the  Manufacturer  and  the  Operator   respecting  the
maintenance of the TCS-1 System.

     1.5 "Manufacturer" shall mean Tirex America Inc. and Tirex-Canada ( 3143619
Canada, Inc.), and all other corporations,  partnerships, or other entities, now
or in the future  controlled  by, under common  control  with, or in control of,
Tirex America Inc., jointly and severally.

     1.6  "Non   Proprietary   Equipment"   shall  mean  all  of  the  following
constituent, integral parts of the TCS-1 System:

         All  bailing  systems  contained  in the TCS-1  System,  including  all
              associated  ancillary  equipment  and  conveyance  and exit belts,
              chutes and/or other components  combined or integrated  therewith,
              as specified in the pertinent plans and specifications therefore.

         freezing  chambers  and  cyrogenic   systems  and  all   substitutions,
              replacements,  and improvements,  and all repair and renewal parts
              installed  therein,  as specified in the plans and  specifications
              therefore, attached as Schedule 1.6 ( b ) .

     1.7 "Operator"  shall mean  Recycletron,  Inc. and all other  corporations,
partnerships,  or other  entities,  now or in the future  controlled  by,  under
common control with, or in control of, Recycletron, Inc. jointly and severally.

     1.8   "Proprietary   Front-End   System"  shall  mean  the   manufacturer's
proprietary front-end tire preparation system, all substitutions,  replacements,
and  improvements,  and all repair  and  renewal  parts  installed  therein,  as
specified  in the plans and  specifications  therefor,  attached as Schedule 1.8
hereto.


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     1.9 "Purchased  Equipment" shall mean the Proprietary  Front-End System and
the Non  Proprietary  Equipment  (as those terms are defined in Sections 1.8 and
1.6 , collectively).

     1.10 "Site" shall mean the Operator's  premises at (to be determined by the
Operator).

     1.11 "TCS-1  System" shall mean the  Manufacturer's  proprietary  cryogenic
tire  disintegration  system,  patent  pending,  consisting  of the  Proprietary
Front-End  System,  the Non  Proprietary  Equipment  and the Leased  Proprietary
Equipment,  as  specified in the plans and  specifications  attached as Schedule
1.3,  1.6  (b),  and  1.8  hereto  and  all  substitutions,   replacements,  and
improvements, and all repair and renewal parts installed therein.

     1.12 "Test Period"  shall mean a three (3) day period which shall  commence
within ten (10) business days after  completion of the installation of the TCS-1
System, during which Test Period, the TCS-1 System shall be operated continually
for up to 12 hours per day  exclusive  of any time  devoted to  adjustments  and
acclamation.

2.   RECITALS

Whereas:

     2.1 The  Manufacturer has invented,  built, and patented (patent  pending),
and is the sole and exclusive owner, directly or indirectly, through one or more
subsidiaries, of all right title and interest in the TCS-1 System.

     2.2  Recycletron  Inc.  is a  corporation  organized  for  the  purpose  of
commercially   exploiting,   directly  or   indirectly,   through  one  or  more
subsidiaries,  the TCS-1 System by purchasing the Purchased  Equipment,  leasing
the Leased Proprietary Equipment, and operating the TCS-1 System.

3. AGREEMENT FOR PURCHASE AND SALE OF PROPRIETARY  FRONT-END AND NON PROPRIETARY
   EQUIPMENT

3.1  Purchase and Sale

     The Operator agrees to purchase,  and the Manufacturer  agrees to sell, the
Proprietary  Front-End System and the Non Proprietary  Equipment,  as defined in
Sections 1.6 and 1.8, above (collectively,  the "Purchased  Agreement" ), above,
in accordance with the terms and conditions


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of this Agreement.  The Operator may at its election take title to the Purchased
Equipment in a wholly owned  subsidiary  corporation to be formed by it for such
purpose.  Such  election by the  Operator  shall  nowise  modify,  diminish,  or
otherwise affect the Operator's  liability  hereunder to the  Manufacturer.  The
purchase and payment for the Purchased Equipment by the Operator,  and the sale,
assignment, transfer, and delivery thereof by the Manufacturer, shall take place
subject to the fulfillment of the conditions hereinafter provided.

3.2  Purchase Price

     The purchase  price for the Purchased  Equipment  (the  "Purchase  Price"),
installed and set in operation pursuant to Section 7 and 8 hereof,  shall be the
sum of two million United States dollars (US  $2,000,000),  FOB Montreal,  which
shall be deemed allocated as follows:

         (a)      Freezing Chamber and
                   Cryogenic Systems                 US $1,325,000

         (b)      Front End Tire
                   Preparation and
                   Bailing Systems                         675,000
                                                     -------------
                                            Total    US $2,000,000

3.3  Payment Terms

     3.3.1 In the  absence  of  arrangements  for  lease  or  letter  of  credit
financing,  satisfactory  to  the  Manufacturer,  the  Purchase  Price  for  the
Purchased Equipment shall be paid as follows:

         (a)   US $25,000  upon execution of this Agreement;

         (b)   US $100,000 6 months prior to the anticipated Delivery Date.

         (c)   US $125,000 3 months prior to the anticipated Delivery Date.

         (d)   US $1,850,000 on the Acceptance Date.


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4.   AGREEMENT FOR OPERATING LEASE OF LEASED PROPRIETARY EQUIPMENT

4.1  Agreement to Lease Equipment

     The Manufacturer, as lessor, and the Operator, as lessee, hereby enter into
an  operating  lease (the  "Lease")  for the Leased  Proprietary  Equipment,  as
defined in Section 1.3 above, subject to the following terms and conditions:

4.2  Term of the Lease

     4.2.1 The term of the Lease  shall be sixty (60) months  commencing  on the
Acceptance date.

     4.2.2 At the expiration of the full original term hereof, if this Lease has
remained  in effect and the  Operator  has duly  performed  all its  obligations
thereunder  during the entire such term, then the Operator shall have the option
to either:

     (a)  Obtain a new lease agreement in the form then being generally  offered
          by the  Operator  to the trade with  renewal  terms,  as agreed by the
          parties;

     (b)  Continue to use the same  equipment  installed  hereunder  and thereby
          extend  the term of this Lease at a reduced  rental  rate of US $6,250
          per month for a period of one five years; or

     Request  that the  Manufacturer  exercise  its  right of first  refusal  to
repurchase the Purchased  Equipment  pursuant to Section 13.1 of this Agreement,
in which  event the  Manufacturer  shall have  thirty  (30) days to either:  (i)
notify the Operator of its intent to  repurchase  the Purchased  Equipment  and,
within sixty (60) days of such notice,  effectuate such repurchase and thereupon
enter upon the  premises  where the said TCS-1  System is located and remove the
entire TCS-1 System from the Operator's premises at the Manufacturer's  expense,
or (ii) notify the Operator that it does not intend to repurchase  the Purchased
Equipment and,  within thirty (30) days of such notice,  enter upon the premises
where the TCS-1 System is located,  take  possession  of the Leased  Proprietary
Equipment without previous demand or notice and without legal process,  retrieve
the Leased  Proprietary  Equipment  from the TCS-1  System and remove the Leased
Proprietary  Equipment  from  the  Operator's  premises  at  the  Manufacturer's
expense.


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4.3  Rent Payments

     4.3.1 The Operator shall pay to the  Manufacturer  monthly rental  payments
(the "Rent Payments") for the Leased Proprietary Equipment at the rate of twelve
thousand,  five hundred United States dollars (US $12,500) per month, payable in
advance, as follows:

     (a)  the Rent Payment for the first 30-day  period (the  "Set-Off  Period")
          following the Acceptance Date shall be paid by way of a set-off in the
          amount  of US  $12,500  against  the  deposit  heretofore  paid by the
          Operator;

     (b)  the Rent  Payment for the period (the  "Partial-Month  Period")  which
          commences on the first day  following  the Set-Off  Period and ends on
          the last day of the calendar month in which such Partial-Month  Period
          falls, will be payable in cash on the first day of such  Partial-Month
          Period, on a pro rata basis.

     (c)  Normal  monthly  Rent  Payments  of US $12,500  will  commence  and be
          payable on the first day of the first full  calendar  month  following
          the Partial-Month Period.

EXAMPLE:

     Acceptance Date:             September 15th
     Set-Off Period:              September 16th through October 15th.
                                  
     Partial-Month Period:        October 15th through October 31st, with
                                  Rent Payment in the amount of $6,250 due and
                                  payable on October 15th.
                                  
     Commencement of Regular      November 1st, with normal monthly Rent Payment
       Monthly Rental Payments    of $12,500  due and payable on such
       date.                      

     4.3.2 In the  event of that  payment  of any  Rent  Payment  is made by the
Operator  more than ten (10) days  after the date when such  payment  shall have
been due, the Operator shall pay a late charge of one and a half percent (1.5 %)
of the  entire  amount  of such  Rent  Payment  for  every  month in which  such
delinquency occurs or continues.


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5.   TITLE TO EQUIPMENT

5.1  Title to Purchased Equipment

     5.1.1 Title to the  Purchased  Equipment  shall pass to the  Operator  upon
payment in full of the  balance of the  Purchase  Price,  due on the  Acceptance
Date.

     5.1.2 No rights to any plans or designs  respecting  the TCS-1 System shall
pass to the Operator  and the Operator  shall not copy,  reproduce,  design,  or
build, or cause, assist, or suffer to be copied, reproduced,  designed, or built
by any other person,  firm, or corporation  any equipment in any way similar to,
or based upon, the design or structure of the TCS-1 System.

5.2  Title to Leased Proprietary Equipment

     5.2.1 The Leased  Proprietary  Equipment shall at all times remain the sole
and exclusive  property of the Manufacturer  (which reserves the right to assign
or encumber the Leased  Proprietary  Equipment)  and the Operator  shall have no
right, title, or interest to the Leased Proprietary Equipment but only the right
to use such Equipment under this Lease. The Leased  Proprietary  Equipment shall
not be  transferred  or sublet by the  Operator  to any  other  person,  firm or
corporation,   the  Operator  shall  not  permit  any  other  person,  firm,  or
corporation to use the Leased Proprietary Equipment,  and this agreement may not
be assigned by the Operator either by its own act or by operation of law.

     5.2.2 The Leased  Proprietary  Equipment shall remain personal property and
shall not be deemed otherwise by reason of becoming attached to the premises.

     5.2.3  The  Manufacturer  shall  have the right at any time or from time to
time to modify  the  Leased  Proprietary  Equipment  in a manner  which will not
lessen the utility of the Leased Proprietary Equipment;

     5.2.4 The Operator shall not enter into, remove, tamper with, or breach the
security of, the Leased  Proprietary  Equipment.  The  Operator  shall not copy,
reproduce,  design,  or  build,  or  cause,  assist,  or  suffer  to be  copied,
reproduced,  designed,  or built by any other person,  firm, or corporation  any
equipment  in any way similar to, or based upon,  the design or structure of the
Leased  Proprietary  Equipment,  or of any part thereof.  The Operator shall not
permit any Leased Proprietary  Equipment to be abused, not permit the removal of
any descriptions, instructions, warnings plate or markings, or other writings of
any kind whatsoever put on the Leased Proprietary Equipment by the Manufacturer,
nor attach anything to or remove anything from the Leased Proprietary Equipment.


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     5.2.5 In  accordance  with  the  terms of the  Maintenance  Agreement,  the
Operator will not allow any repairs to the TCS-1 or  replacement  of parts to be
done by any person or persons except technicians authorized by the Manufacturer.

     5.2.6 The  Operator  agrees  that,  in  consideration  of the  Manufacturer
entering into this Lease, it will not move the TCS-1 System, of which the Leased
Proprietary  Equipment  forms a part,  to any  location  outside of the state in
which the Site is located  or  outside of a fifty (50) mile  radius of the Site,
without the prior written consent of the Manufacturer.

6.   SITE PREPARATION

6.1  Site Plan Specifications

     Not less than three (3) months prior to the anticipated  Delivery Date, the
Manufacturer will furnish to the Operator "Site Plan Specifications"  respecting
the  electrical,   ventilation,   water  supply  and  disposal,  and  any  other
specifications  required at the site for the  installation  and operation of the
TCS-1 System.

6.2  Preparation of Site

     6.2.1 Prior to the  Delivery  and  installation  of the TCS-1  System,  the
Operator shall make, at its own expense,  all  alterations to and changes in its
premises and equipment required to bring the site into complete conformance with
the  above  referenced  Site  Plan  Specifications,  with  respect  to which the
Operator shall obtain all necessary permissions and inspections, and which shall
include  but not be limited to making any  required  structural  changes and the
installation of:

     (a)  electrical  equipment and power lines up to the  electrical  inputs or
          control boxes attached to the TCS-1 System,  as designated on the Site
          Plan Specifications;

     (b)  water  supply  sources and  equipment  up to the water  inflow  points
          designated on the Site Plan Specifications;

     (c)  water drainage and disposal sites and equipment from the water outflow
          points designated on the Site Plan Specifications;

     (d)  air  ventilation  sources and equipment as designated on the Site Plan
          Specifications


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6.3  Notice to Inspect

     6.3.1 The Operator shall, not later than one month prior to the anticipated
Delivery Date, give written notice to the Manufacturer (the "Notice to Inspect")
that: (i )  preparation  of the site for the  installation  and operation of the
TCS-1 has been  completed in accordance  with the Site Plan  Specifications  and
(ii) all  applicable  governmental  regulations  have been complied with and all
required  permits,  licenses,  and standards have been obtained or met (together
with  copies  of  all  documentary   evidence  thereof)  and  request  that  the
Manufacturer inspect the site in order to confirm the foregoing.

6.4  Manufacturer's Right to Inspect Site

     6.4.1 The  Manufacturer  shall have the right, at any time within two weeks
of its  receipt of the  Notice to  Inspect,  to inspect  the site and notify the
Operator in writing (the "Notice of Approval")  that the Site is in  conformance
with the Site Plan Specifications and that all legal requirements have been met.

     6.4.2 In the  event  that,  after  inspecting  the Site,  the  Manufacturer
determines that the Site is not in conformance with the Site Plan Specifications
or that any legal  requirements  have not been met, then the Manufacturer  shall
have the  right  to  require  that the  Operator  make  any and all  changes  or
additions required to bring the Site into such conformance,  at the sole expense
of the Operator  prior to the Delivery Date and to reschedule  the Delivery Date
after all such changes or additions are completed and/or all legal  requirements
are complied with. In such event,  the Operator  shall,  upon  completion of the
required changes or additions,  give written notice to the Manufacturer ("Notice
to Re-inspect") that such changes or additions have been made in accordance with
the Manufacturer's instructions or governmental regulations and that the Site is
in complete  conformance  with the Site Plan  Specifications  and all applicable
regulations.  The  Manufacturer  shall have the  right,  within two weeks of its
receipt of such Notice to reinspect the Site.  Such  procedures may be repeated,
and the Manufacturer shall have no obligation to deliver the TCS-1 System, until
the  Manufacturer  confirms upon inspection that the Site is in conformance with
the Site Plan  Specifications,  all governmental  regulations are complied with,
and the Delivery Date is rescheduled in accordance with this Paragraph 6.4.2.

7.   DELIVERY AND INSTALLATION

7.1  Delivery

     7.1.1  Unless the  Delivery  Date is  rescheduled  in  accordance  with the
provisions of paragraph 6.4.2 above,  the  Manufacturer  shall deliver the TCS-1
System to the site not later


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than 30 days after the  Manufacturer  determines that the Site is in conformance
with the Site Plan Specifications and that all legal requirements have been met,
in accordance with Section 6.4, above.

     7.1.2  Delivery  shall  be made  F.O.B.  Montreal,  Canada.  The  equipment
comprising the TCS-1 System shall be placed in suitably protected containers the
nature of which shall be determined by the Manufacturer.  The Operator shall pay
all  costs  of  transportation  and  delivery  of  the  TCS-1  System  from  the
Manufacturer's plant in Montreal to the Site.

     7.1.3 In the event that delivery of the TCS-1 System,  or any part thereof,
for a period not  exceeding 30 days,  shall be  prevented  by causes  beyond the
control of the Seller, including but not limited to acts of God, labor troubles,
failure of essential means of transportation,  or changes in policy with respect
to exports or  otherwise  by the  government  of the  jurisdiction  in which the
Operator is located,  the Delivery Date shall be  rescheduled  after all of such
causes  have been  eliminated.  In the  event,  however,  that such  nondelivery
continues after such extended period,  the Operator and the  Manufacturer  shall
each have the right to cancel this agreement by written notice, and in such case
there  shall be no  obligation  or  liability  on the part of either  party with
respect to such undelivered equipment.

7.2  Installation

     7.2.1 Within ten  business  (10)days of the delivery of the TCS-1 System to
the Site, the Manufacturer  shall, at its own expense,  install the TCS-1 System
at the Site.

     7.2.2 Upon  installation,  the TCS-1  System  shall be in complete  working
order  and  shall  consist  of the Non  Proprietary  Equipment  and  the  Leased
Proprietary Equipment, as specified in the plans and specifications set forth in
Schedules 1.3,1.6 (b), and 1.8 hereto.

8.   EQUIPMENT TESTING AND OPERATOR'S ACCEPTANCE

8.1  Notice of Availability for Testing

     Upon  completion of the  installation  of the TCS-1 System at the Site, the
Manufacturer  shall give the  Operator  written  notice that the TCS-1 System is
available for testing operations.


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8.2  Test Period

     8.2.1  Immediately upon giving notice to the Operator that the TCS-1 System
is available for testing operations, the Manufacturer shall, within ten business
days, at its own expense,  provide a technical  representative  to supervise the
operation  of the TCS-1 for a period  of three  (3) days  (the  "Test  Period").
During the Test Period,  the TCS-1 System shall operate in  accordance  with the
specifications set forth in Schedule 8.2 hereto,  continually for up to 12 hours
per day.

     8.2.2 All power,  fuel, light,  water, oil, or other necessary supplies and
all necessary personnel (other than the engineering  technician furnished by the
Manufacturer)  for the  successful  operation  of the  TCS-1  System,  shall  be
provided by the Operator.

     8.2.3 The Manufacturer shall furnish to the Operator all data regarding the
TCS-1  System in order to enable the  Operator  to operate  such  System and, in
addition to the training to be provided  pursuant to the Maintenance  Agreement,
the Manufacturer shall, during the Test Period, instruct at least two (2) of the
Operator's employees with respect to the operation, and operating maintenance of
the TCS-1 System,  and use reasonable  care in training such employee,  provided
that if in the  Manufacturer's  sole  opinion  any  employee  is not  adequately
qualified, the Operator shall designate another of its employees to receive such
instruction.

8.3  Acceptance

     8.3.1 Unless the TCS-1,  or any part of it, fails to operate in  accordance
with the  specifications  set forth in Schedule 8.2 hereto,  the  Manufacturer's
offer  to  sell  the  Front-End  System  and  the  Non  Proprietary   Equipment,
collectively  the  "Purchased  Equipment"  and to lease the  Leased  Proprietary
Equipment to the Operator shall automatically be deemed to have been accepted by
the  Operator  as of the  Acceptance  Date,  which  shall occur on the first day
following the completion of the Test Period and the Operator shall have no right
to revoke such acceptance for any reason.


     8.3.2 If the TCS-1,  or any part of it, fails to operate in accordance with
the specifications set forth in Schedule 8.2 hereto, the Manufacturer shall have
Ninety (90) days in which to cure the  problems  responsible  for such  failure.
Costs of all parts  and labor  required  to bring  the TCS-1  into full  working
condition  shall be borne by the  Manufacture  unless the  failure to operate in
accordance  with the  specifications  set forth in Schedule 8.2. shall have been
caused  by  any  act or  failure  to act on  the  part  of the  Operator  or its
personnel,  including  but not  limited to the  failure of the  Operator to have
brought the Site into conformance with the Site Plan Specifications.


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     8.3.3 Upon written  notice to the Operator  that the problems  which caused
the TCS-1 System to fail to operate as required during the Test Period have been
cured, the Manufacturer shall, at the request of the Operator, commence a second
Test Period for up to three (3) days, in which case the  acceptance  criteria of
Paragraph 8.2.1 shall pertain to such second Test Period (or any subsequent Test
Period) with the same force and effect as to the initial Test Period.

9.   RISK OF LOSS

     9.1 The risk of loss,  injury,  or  destruction  of the Leased  Proprietary
Equipment from any cause whatsoever, except negligence or willful destruction by
the  Operator  shall be borne by the  Manufacturer  during the term of the Lease
therefor provided hereunder.

     9.2 The risk of loss,  injury, or destruction of the NonLeased  Proprietary
Equipment from any cause whatsoever, except negligence or willful destruction by
the Operator shall be borne by the  Manufacturer  only until title passes to the
Operator.

     9.3 Any loss, injury, or destruction to the TCS-1, or any part of it, after
title to the Non Proprietary  Equipment passes to the Operator,  shall not serve
in any  manner to  release  the  Operator  from the  obligation  to pay the Rent
Payments provided for Section 4.3, above.

10.  REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE MANUFACTURER

     The  Manufacturer  hereby  represents,   warrants,  and  covenants  to  the
Operator, as follows:

10.1 Corporate Status

     Tirex America Inc. is (i) duly organized corporation,  validly existing and
in good standing under the laws of the State of Delaware; (ii) has full power to
own all of its properties  and carry on its business;  and (iii) is qualified to
do  business  as a  foreign  entity  in each of the  jurisdictions  in  which it
operates,  if any,  unless the  character of the  properties  owned by it or the
nature of the business  transacted by it, does not make qualification  necessary
in any other jurisdiction or jurisdictions.


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10.2 Corporate Action

     Prior to the date hereof,  the board of directors of the  Manufacturer  has
duly  adopted   resolutions   approving   the  execution  and  delivery  to  the
Manufacturer  of this Agreement and authorizing and consenting to each and every
one of the terms, warranties,  representations,  covenants and conditions herein
contained.

10.3 Patents

     10.3.1 The  Manufacturer  has applied for a patent in the United States and
Canada for the  Disintegration  System  forming  part of the Leased  Proprietary
Equipment.  The  Manufacturer is the sole owner of such patent  application and,
upon the granting of a patent in respect thereof,  the Manufacturer shall be the
sole owner of such patent and of all rights thereunder.

     10.3.2 The Manufacturer shall defend, to the best of its ability and at its
own expense, all actions,  suits, or proceedings instituted against the Operator
insofar as the same are based on any  claims  that the said  Leased  Proprietary
Equipment, or any part thereof, constitutes an infringement of any patent of the
United States or Canada and shall  indemnify  the Operator  against all damages,
costs, and expenses which the Operator may incur as a result of any action which
may be brought or threatened  against the Operator with respect to the equipment
covered by such patent, provided that:

     (a)  The Manufacturer shall have the right at any time or from time to time
          to modify  the TCS-1  System in a manner  which  will not  lessen  the
          utility thereof;

     (b)  The Operator gives the Manufacturer immediate notice in writing of the
          institution  of the  action,  suit,  or  proceeding  and  permits  the
          Manufacturer,  through  its  counsel,  to defend  same,  and gives the
          Manufacturer all information,  assistance, and authority to enable the
          Manufacturer to do; and

     (c)  The  Operator  has  made no  change  of any kind in the  TCS-1  System
          without obtaining the prior written permission of the Manufacturer.

     10.3.3 When  information is brought to the attention of the Manufacturer or
the Operator that others are unlawfully  infringing on the patents  covering the
machine,  the  Manufacturer  shall  prosecute  diligently  any  infringer at the
Manufacturer's own expense.

10.4 Warranties

     Subject to any default on the part of the  Operator  under the  Maintenance
Agreement,  the  Manufacturer  warrants  that  the  TCS-1  will  conform  to the
descriptions  contained  in Schedules  1.3,  1.6 (b), and 1.8. The  Manufacturer
further warrants the TCS-1 System against defects in


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workmanship  and  materials  or  failure  to  perform  in  accordance  with  the
specifications set forth in Schedule 8.2 for one year after the Acceptance Date.
No other  representations  or warranties  have been made by the  Manufacturer or
relied upon by the Buyer. If any defects in the Manufacturer's work or materials
are discovered within one year of delivery the Operator shall give notice within
seven (7) days of such discovery.  THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY AND
ALL OTHER WARRANTIES.

11.  REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE OPERATOR

     The  Operator   hereby   represents,   warrants,   and   covenants  to  the
Manufacturer, as follows:

11.1 Corporate / Legal Status

     Recycletron,  Inc.is  (i)  duly  incorporated  under  the  laws of  Canada,
organized  Corporation , validly existing and in good standing under the laws of
the  province of Canada;  (ii) has full power to own all of its  properties  and
carry on its business; and (iii) is qualified to do business as a foreign entity
in each of the jurisdictions in which it operates,  if any, unless the character
of the  properties  owned by it or the nature of the business  transacted by it,
does  not  make   qualification   necessary   in  any  other   jurisdiction   or
jurisdictions.

11.2 Financial Condition of the Operator

     The books and records of the  Operator are complete and accurate and fairly
present the financial condition and the results of operations of the Operator as
of the  date  hereof.  There  are  no  material  liabilities,  either  fixed  or
contingent,  not  reflected  in such books and records  other than  contracts or
obligations in the ordinary and usual course of business;  and no such contracts
or  obligations  in the  usual  course  of  business  constitute  liens or other
liabilities  which,  if  disclosed,  would  alter  substantially  the  financial
condition of the Operator as reflected in such books and records.

11.3 Defaults and Conflicts

     There are no  defaults  on the part of the  Operator  under  any  contract,
lease, mortgage, pledge, credit agreement,  title retention agreement,  security
agreement,  lien,  encumbrance or any other commitment,  contract,  agreement or
undertaking  to which the Operator is a party.  The execution of this  Agreement
will not violate or breach any material  agreement,  contract,  or commitment to
which the Operator is a party.


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11.4     Corporate Action

     Prior to the date hereof,  the boards of directors of the Operator has duly
adopted resolutions  approving the execution and delivery to the Manufacturer of
this  Agreement  and  authorizing  and  consenting  to each and every one of the
terms, warranties, representations, covenants and conditions herein contained.

11.5 Insurance and Damage to Equipment

     11.5.1 The Operator,  at its own cost and expense,  shall insure the Leased
Proprietary Equipment against burglary, theft, fire, and vandalism in the amount
of $______ and obtain public  liability  insurance with minimum limits of $_____
/$_____ for bodily injury and $______ for property  damage in such form and with
such  insurance  companies as shall be  satisfactory  to the  Manufacturer.  All
insurance policies shall name both the Operator and the Manufacturer as insureds
and copies of the policies and the receipts for the payment of premiums shall be
furnished to the  Manufacturer.  Each damage policy shall provide for payment of
all losses  directly to the  Manufacturer.  Each liability  policy shall provide
that all losses be paid on behalf of the Operator and the Manufacturer, as their
respective interests appear.

     In the event that the Operator  shall fail to comply with the provisions of
Paragraph  11.5.1,  above,  then the Operator shall pay to the  Manufacturer  an
adequate  premium in advance per annum to enable the  Manufacturer to insure the
Leased  Proprietary  Equipment and all such insurance  policies shall be held in
the custody of the Manufacturer.

     11.5.3 In the event that all or any part of the TCSs-1  System is  damaged,
due to any cause whatsoever, to the extent that the TCS-1 System is not useable,
notwithstanding   that  the  Manufacturer  may  have  been  partially  or  fully
compensated for the Leased  Proprietary  Equipment  forming part of such damaged
TCS-1  System  by  way  of  insurance  or  otherwise,   the  Manufacturer  shall
immediately  have  possession of the said Leased  Proprietary  Equipment and the
Manufacturer  may enter upon the  premises  where the TCS-1  System is  located,
remove the Leased  Proprietary  Equipment from the damaged TCS-1 System and take
possession of the said Leased  Proprietary  Equipment without previous demand or
notice and without legal process,  and remove it from the Operator's premises at
the Manufacturer's expense.

11.6 Access

     The  Operator  shall  insure  that the  Manufacturer,  and its  agents  and
employees,  shall at all times have free access to the  Operator's  premises for
the purpose of inspecting the Leased Proprietary Equipment and observing its use
and operation, and making alterations,  improvements,  or additions thereto; and
the Operator shall afford all reasonable facilities therefor,


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and  shall  allow  the   Manufacturer  to  make  such  reasonable   alterations,
improvements,  or additions as the  Manufacturer  shall deem  necessary,  at the
expense of the Manufacturer.

11.7 Taxes

     The Operator shall pay all taxes,  assessments,  penalties,  and fees which
may be levied or assessed on or with  respect to the  installation  of the TCS-1
System and, at all times during the term of the Lease of the Leased  Proprietary
Equipment,  the Operator shall pay all taxes and assessments which may be levied
upon or in respect of the TCS-1 System or its operation, and shall pay any other
liability  of any  character  which may be imposed or incurred as an incident to
the physical possession or operation of such System.

11.8 Compliance with Applicable Law

     The Operator shall provide,  at its own expense,  all requisite permits and
licenses necessary for the installation and operation of the TCS-1 System at the
Site and shall  exercise its best efforts to maintain  its  compliance  with all
applicable federal, state, and local laws, statutes, rules, and regulations and,
in the event of any non-compliance which renders impossible the operation of the
Site as a tire recycling facility,  the Operator shall exercise its best efforts
to cure such non-compliance promptly.

11.9 Subordination

     Not less than three (3) months prior to the anticipated  Delivery Date, the
Operator shall procure from every owner, landlord,  mortgagee,  or other secured
party having any  interest in the real  property on which the TCS-1 System is to
be installed or in the  Operator's  place of business or the equipment  therein,
and deliver to the  Manufacturer,  a written consent to such  installation and a
writing to the effect that the lien of any such  mortgage  or other  interest is
subordinate  to the  rights  of the  Manufacturer  with  respect  to the  Leased
Proprietary Equipment.

11.10 Ancillary Agreements

     11.10.1  The  Operator  will,  simultaneously  with the  execution  of this
Agreement,  and in  consideration  of the premises  and the mutual  promises and
agreements   made  herein,   enter  into  the  following   agreements  with  the
Manufacturer or such person, corporation,  firm, partnership, or other entity as
the Manufacturer shall appoint in its stead:

     (a)  The Royalty Agreement, of even date herewith, between the Manufacturer
          and the Operator providing for the Operator to pay to the Manufacturer
          a royalty of two


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          percent  (2%) of the gross  proceeds  from the sale by the Operator of
          rubber  crumb  fiber and steel from scrap tires  disintegrated  by the
          Operator  through the utilization of the TCS-1 System, a copy of which
          Royalty Agreement is attached as Schedule 11.10 (a) hereto; and

     (b)  The Maintenance Agreement, of even date herewith, between the Operator
          and the Manufacturer,  respecting the maintenance of the TCS-1 System,
          a copy of which Maintenance Agreement is attached as Schedule 11.10(b)
          hereto; and

     (c)  The Crumb  Purchase  Agreement,  of even date  herewith,  between  the
          Operator  and the  Manufacturer,  or such person,  corporation,  firm,
          partnership,  or other  entity to whom the  Manufacturer,  at its sole
          option,  may assign such Crumb Purchase  Agreement,  pursuant to which
          the  Operator  shall  agree to sell up to forty  percent  (40%) of the
          rubber  crumb  produced  by the TCS-1  System,  a copy of which  Crumb
          Purchase Agreement is attached as schedule 11.10.1 (C)

12.  DEFAULTS

12.1 Default by Manufacturer

     12.1.1 Each of the following events shall be deemed to constitute breach of
this Agreement  and,  unless cured within ninety (90) days,  shall  constitute a
default hereunder by the Manufacturer:

     (a) If at any time prior to the delivery of the TCS-1 System to the Site:

          (i)  The   Manufacturer   makes  an  assignment  for  the  benefit  of
               creditors;

          (ii) A voluntary  or  involuntary  petition is filed by or against the
               Manufacturer   under  any  law   having  for  its   purpose   and
               adjudication  of the  Manufacturer a bankrupt or the extension of
               the time of  payment  of,  adjustment  of,  or other  arrangement
               affecting   the   liabilities   of  the   Manufacturer,   or  the
               reorganization  of the  Manufacturer  and  such  petition  is not
               discharged  or  dismissed  within one hundred  twenty  (120) days
               after such petition is filed;


          (iii)A Receiver is appointed for the property of the  Manufacturer and
               is not  discharged or dismissed  within one hundred  twenty (120)
               days after such appointment;


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               or

          (iv) Any  distress,  execution,  or  attachment  is  levied  upon  the
               Manufacturer's  property to the extent that the  Manufacturer  is
               not able to fulfill its  obligations  to deliver the TCS-1 within
               ninety (90) of the anticipated Deliver Date.

     (b)  The Manufacturer  fails to deliver the TCS-1 System in accordance with
          the terms and provisions of Section 7, above,  within ninety (90) days
          of the Delivery Date unless prior thereto,  the Operator has failed to
          meet the  payment  provisions  set forth  above in Section 3.3 of this
          Agreement;

     (c)  The TCS-1 System fails to operate for a full Test (or re-test) Period,
          in  accordance  with  Section 8.2 hereof,  as  specified  Schedule 8.2
          hereto , within  ninety  (90)  days from the date the TCS-1  System is
          actually delivered to the Site.

12.2 Default by Operator

     Each of the following  events shall be deemed to constitute  breach of this
Agreement and, unless cured within ninety (90) days,  shall constitute a default
hereunder by the Operator:

     (a)  The Operator fails to make any payment required to be made pursuant to
          Sections 3.3 or 4.3 of this  Agreement  or any payment  required to be
          made by the Operator under the Maintenance  Agreement and such failure
          to make  payment  shall have  continued  for a period of ten (10) days
          after written notice from the Manufacturer;

     (b)  The Operator refuses to accept or allow the Manufacturer to install or
          test the TCS-1 System in accordance with Sections 7.2, 8.2, and 8.3 of
          this  Agreement,  notwithstanding  that  such  System  has  been:  (i)
          delivered to the  Operator's  Site on a timely basis or (ii) delivered
          to the Site and has  performed in accordance  with the  specifications
          set forth in Schedule 8.2 hereof for the prescribed Test Period;

     (c)  The Operator makes an assignment for the benefit of creditors;

     (d)  A  voluntary  or  involuntary  petition  is  filed by or  against  the
          Operator under any law having for its purpose and  adjudication of the
          Operator  a  bankrupt  or the  extension  of the time of  payment  of,
          adjustment of, or other  arrangement  affecting the liabilities of the
          Operator,  or the  reorganization of the Operator and such petition is
          not discharged or dismissed within one hundred twenty (120) days after
          such petition is filed;


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     (d)  A Receiver is appointed for the property of the Operator;

     (e)  Any distress,  execution, or attachment is levied upon the machines or
          the Operator's property; or

     (f)  The Operator  fails to faithfully  and fully comply with the terms and
          provisions  of Section 5.2 of this  Agreement,  with any such  failure
          deemed  to  be an  irremediable  material  breach  of  this  Agreement
          immediately upon its occurrence.

     (g)  The  Operator  fails  to  faithfully  and  fully  perform  each of its
          obligations  under the  Maintenance  Agreement  and fails to cure such
          breach within the time period  specified  therein with respect to such
          failure.

12.3 Remedies Available to the Operator upon Default by Manufacturer

     If the Manufacture  shall be in default pursuant to Paragraphs  12.1.1 (a),
(b), or (c) of this Agreement, unless such default shall have been caused by any
act or failure to act on the part of the  Operator or its  personnel,  including
but not  limited to the failure of the  Operator  to have  brought the Site into
conformance with the Site Plan Specifications, the Operator shall have the right
to rescind this  agreement by serving  written notice  ("Notice of  Rescission")
upon  the  Manufacturer.  In such  event,  the  Manufacturer  shall,  at its own
expense,  remove the TCS-1  System not later than one hundred  and twenty  (120)
days  following  its  receipt  of such  Notice  of  Rescission  and  all  monies
theretofore  paid by the Operator to the  Manufacturer  pursuant to Section 4.3,
above, shall be returned by the Manufacturer to the Operator

12.4 Remedies Available to the Manufacturer upon Default by the Operator

     12.4.1  The  Operator  acknowledges  and  agrees  that  its  breach  of any
provision contained in Section 5.2 of this Agreement will cause irreparable harm
to the Manufacturer. The Operator therefore agrees that, if it is alleged by the
Manufacturer  that the  Operator or any of the  Operator's  affiliates,  agents,
employees,  or associates  has breached,  or is  attempting  or  threatening  to
breach,  any provision  contained  hereinabove in the said Section 5.2, then the
Manufacturer  shall have the right to obtain from any court or arbitrator having
jurisdiction,  such equitable  relief as may be appropriate,  including a decree
enjoining  the  Operator  from any further such breach of such  provisions,  and
enjoining  the Operator  from engaging in the tire  recycling  business,  either
directly or indirectly  through or in association  with any other person,  firm,
corporation, or organization during the term of this Agreement.

     12.4.2 In the event of any default by the  Operator  under this  Agreement,
the  Manufacturer  may at its  option,  at any time  thereafter  terminate  this
Agreement by written notice


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<PAGE>

("Notice of  Termination"),  given in  Accordance  with Section 16 hereof.  such
termination  may  be  made  effective,   at  the  option  of  the  Manufacturer,
simultaneously with or at any time after the happening of any such default.

     12.4.3 Upon any  termination of this Agreement  prior to payment in full of
the  entire  Purchase  Price  of  US  $2,000,000  for  Purchased  Equipment,  in
accordance  with the terms of Section 3.3 of this  Agreement,  the  Manufacturer
shall  immediately  have  possession  of  the  entire  TCS-1  System,   and  the
Manufacturer may enter upon the premises where the said TCS-1 System is located,
take  possession  of it  without  previous  demand or notice and  without  legal
process, and remove it from the Operator's premises at the Operator's expense.

     12.4.4 Upon any  termination of this Agreement after payment in full of the
entire  Purchase  Price of US $ 2,000,000 for the  Purchased  Equipment has been
made by the Operator,  the Manufacturer shall immediately have possession of the
Leased  Proprietary  Equipment and the  Manufacturer may enter upon the premises
where the TCS-1 System is located,  remove the Leased Proprietary Equipment from
the said TCS-1 System and take  possession of the Leased  Proprietary  Equipment
without previous demand or notice and without legal process,  and remove it from
the Operator's premises at the Operator's expense.

     12.4.5 The Operator acknowledges and agrees that any refusal on its part to
permit the Manufacturer to enter its premises and remove either the TCS-1 System
or the Leased  Proprietary  Equipment in  accordance  with  Paragraph  12.4.3 or
12.4.4 of this Agreement will cause  irreparable harm to the  Manufacturer.  The
Operator therefore agrees that in the event of any such refusal on its part, the
Manufacturer  shall have the right to obtain from any court or arbitrator having
jurisdiction,  such equitable  relief as may be appropriate,  including a decree
enjoining the Operator from any further such refusal of entry and removal.

     12.4.6 In the event of any default by the Operator  prior to the Acceptance
Date, the Manufacturer shall be entitled to damages including but not limited to
retention of the full  deposit paid by the Operator and all costs of  delivering
and removing and re-delivering the TCS-1 System.

     12.4.7 In the event of any  default by the  Operator  after the  Acceptance
Date or pursuant to Paragraph 12.2(b) of this Agreement,  the Manufacturer shall
be  entitled  to damages  including  but not  limited to  retention  of the full
deposit  paid  by the  Operator,  all  costs  of  delivering  and  removing  and
re-delivering  the TCS-1  System,  and  damages  for the  Operator's  failure to
perform  for  the  full  term  of the  Lease  provided  in  Section  4.2 of this
Agreement,  including but not limited to immediate payment of the balance of all
Rent Payments due under the full term of the Lease,

     12.4.8 In the event of any default on the part of the Operator  pursuant to
Paragraphs 12.2(a) or 12.2(b) of this Agreement, the Manufacturer shall have the
right to allow the Operator,


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for a period  of sixty  (60)  days,  to  obtain a buyer  for the  TCS-1  System,
satisfactory to the  Manufacture,  provided  however that,  unless  specifically
waived in writing by the Manufacturer,  the Operator shall continue liable under
this Agreement  lease for the full term of the Lease provided for in Section 4.2
of this Agreement.

     12.4.9  In the  event  of any  default  on the  part of the  Operator,  the
Manufacturer  shall not be deemed to have waived any of its rights  hereunder by
reason of its failure to assert its rights or its failure to take  cognizance of
such breach.

     12.4.10  The  foregoing  remedies  provided  herein for the  benefit of the
Manufacturer  shall not be exclusive  but in addition to any other  remedies the
Manufacturer  may have by virtue of the  breach  by the  Operator,  in law or in
equity,  from any court or arbitration  proceeding having jurisdiction over such
matter.

13.  OPERATOR'S SALE OF NONLEASED PROPRIETARY EQUIPMENT

13.1 Manufacturer's Right to Retrieve Leased Proprietary Equipment Prior to Sale

     In the  event  that,  during or after  the term of the  Lease  provided  in
Section 4.2 of this Agreement, the Operator wishes to divest itself of the TCS-1
System,  pursuant to the  discontinuance  of its  business,  or  otherwise,  the
Operator  will give to the  Manufacturer  written  notice to that effect and the
Manufacturer  shall  have all  rights of entry  and  removal  provided  above in
Paragraphs  12.4.4  and  12.4.5  of this  Agreement,  provided  however  that in
addition to such  rights,  if such event shall occur during the term of the said
Lease, the  Manufacturer  shall also have the rights provided to it in Paragraph
12.4.7 of this Agreement.

13.2 Manufacturer's Right of First Refusal

     In the  event  that,  during or after  the term of the  Lease  provided  in
Section 4.2 of this Agreement, the Operator wishes to divest itself of the TCS-1
System,  pursuant to the  discontinuance  of its  business,  or  otherwise,  the
Operator  will give to the  Manufacturer  written  notice to that effect and the
Manufacturer  will have a right of first refusal to repurchase the TCS-1 System,
at its  fair  market  value,  within  a sixty  (60)  day  period  following  the
Manufacturer's receipt of such notice;


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<PAGE>

14.  ASSIGNMENT

     The Operator shall not transfer,  deliver, sublease, or encumber the Leased
Proprietary  Equipment  to any  person,  corporation,  or  firm,  and the  Lease
provided in Section 4.2 of this  Agreement  may not be assigned by the  Operator
except with the Manufacturer's express prior written consent.

15.  FAILURE OF PERFORMANCE

     Delays  in or  failure  of  performance  occasioned  by war,  fire,  flood,
embargo, car shortage, accident, explosion, expropriation of plant or product by
federal  or state  authority,  or other like  cause  beyond  the  control of the
Manufacturer,  or Act of God, or by strike,  lockout, or other labor trouble, or
inability  to  obtain  sufficient  labor  interfering  with  the  production  or
transportation  of the TCS-1  System,  or any part thereof,  or any  replacement
therefor,  whether because of governmental  action affecting the Manufacturer or
its suppliers, or by any action or proceeding at law or in equity, or otherwise,
shall not subject the Manufacturer to any liability.

16.  NOTICES

     All notices  required or permitted to be given hereunder shall be mailed by
certified mail, or delivered by hand or by recognized  overnight  courier to the
party to whom such notice is required or permitted to be given  hereunder at the
address  set forth  above for such  party,  in all cases with  written  proof of
receipt  required.  Any such  notice  shall be deemed to have  been  given  when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the  receiving  party.  Either  party may change the address to which
notice to it is to be  addressed,  by  written  notice to the  other  party,  as
provided herein.

17.  CONDITIONS PRECEDENT TO MANUFACTURER'S OBLIGATION

     The obligations of the  Manufacturer  hereunder are subject to fulfillment,
prior to the Deliver Date, of the following conditions:

17.1 Truth of Representation

     The representations and warranties by or on behalf of Operator contained in
this Agreement or in any document delivered to the Manufacturer  pursuant to the
provisions  hereof  shall  be true  in all  material  respects  at and as of the
Delivery Date as though such  representations and warranties were made at and as
of such time.


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<PAGE>

17.2 Compliance with Covenants

     The  Operator  shall  have  performed  and  complied  with  all  covenants,
agreements,  and  conditions  required  by this  Agreement  to be  performed  or
complied with by or prior to the Delivery Date.

17.3     Collateral Agreements

     Simultaneously with the execution of this Agreement, the Operator will:

     (a)  enter into the following agreements with the Manufacturer or any joint
          venture to which the Manufacturer is a party:

          (i)  the Maintenance Agreement,  attached as Schedule 11.10(b) to this
               Agreement;

          (ii) the Royalty  Agreement,  attached  as  Schedule  11.10(a) to this
               Agreement; and

          (iii)the  Rubber  Crumb  Purchase  Agreement,   attached  as  Schedule
               11.10(c) to this Agreement.

     (b)  furnish the  Manufacturer  with a copy of the resolutions of the board
          of directors of the Operator  authorizing the Operator to purchase the
          NonLeased  Proprietary  Equipment  and  lease the  Leased  Proprietary
          Equipment pursuant to the terms and conditions of this Agreement;

17.4 Financing Arrangements

     The Operator  will deliver to the  Manufacturer,  not less than one hundred
(100) days prior to the anticipated Delivery Date, to confirm the Delivery Date,
an  irrevocable  commitment  for  lease or letter  of  credit  financing,  which
commitment shall be:

     (a)  for the  full  amount  of the  Purchase  Price  of the  Nonproprietary
          Equipment then outstanding;

     (b)  subject  only  to the  conditions  that  the  TCS-1  will  consist  of
          Equipment   specified  in,  and  will  operate  in  conformance  with,
          Schedules 1.3, 1.6 (b), and 1.8, and respectively.


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<PAGE>

18.  ARBITRATION

     All  controversies  arising out of or relating  to this  Agreement,  or any
modification    thereof,    shall   be   settled   by    arbitration    in   the
__________________________________ in accordance with the Arbitration Rules then
obtaining of the ____________________________________.

19.  BINDING EFFECT.

     19.1 This  agreement  shall bind and inure to the  benefit  of the  parties
hereto and their  respective  legal  representatives,  successors  and  assigns,
provided, however, that this Agreement cannot be assigned by the Operator except
in accordance  with Section 14 of this  Agreement.  Nothing herein  expressed or
implied is intended or shall be  construed to confer upon or to give any person,
firm or  corporation  other than the parties hereto and their  respective  legal
representatives,  successors  and  assigns  any rights or  benefits  under or by
reason of this Agreement.

     19.2 All the right, title, and interest of the Manufacturer under the Lease
may be enforced by the  Manufacturer,  its  successors,  and assigns.  The Lease
shall continue in full force and effect  notwithstanding the death,  incapacity,
or  dissolution  of the  Operator or the  increase,  decrease,  or change in the
personnel of or members of the Operator,  and shall be binding upon the Operator
and the Operator's estate, legal representatives, heirs, and successors.

20.  GENERAL

20.1 Further Assurances

     At any time, and from time to time,  after the execution of this Agreement,
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.

20.2 Waiver

     Any  failure  on the part of any party  hereto  to  comply  with any of its
obligations,  agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.


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<PAGE>

20.3 Brokers

     Neither  party has  employed  any  brokers or finders  with  regard to this
Agreement, unless otherwise described in writing to all parties hereto.

20.4 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.

20.5 Governing Law

     This Agreement shall be governed by the laws of the State of Delaware.

20.6 Entire Agreement

     This Agreement is the entire agreement of the parties  covering  everything
agreed  upon or  understood  in the  transaction.  There  are no oral  promises,
conditions,  representations,  understandings,  interpretations  or terms of any
kind as conditions or inducements to the execution hereof.

20.7 Severability

     If any part of this Agreement is deemed to be unenforceable  the balance of
this Agreement shall remain in full force and effect.

20.8 Publicity

     All  notices  to third  parties  and all  other  publicity  concerning  the
transactions  contemplated  by this  Agreement  shall be  subject  to the  prior
approval of counsel to the Manufacturer.

20.9 Counterparts

     This  Agreement may be executed in any number of  counterparts  and by each
party on a separate  counterpart,  each of which when so executed and  delivered
shall be an original, but all of which together shall constitute one Agreement.


                                      279
<PAGE>

         In Witness Whereof, the parties hereto have caused this Amendment to be
executed the day and year first above written.
whatsoever.

                                       TIREX AMERICA INC.



                                       By    /s/ Terence C. Byrne
                                          ------------------------------
                                          Terence C. Byrne, President

                                       RECYCLETRON INC.

                                       By    /s/  David Bishop
                                          ------------------------------
                                          David Bishop, President


                                      280
<PAGE>

(Exhibit to Equipment Lease and Purchase Agreement with Recyclatron Inc.)

                                   ----------

                               TIREX AMERICA INC.

                                   ----------

     Rubber Crumb  Purchase  Option  Agreement,  made this 8th day of July 1997,
between:

                               Recycletron Inc.
                               770, rue Mill
                               Montreal, Quebec
                               H3C 1Y3
                               Tel: (514) 937-9565
                               Fax: (514) 933-1575
                                                            (the "Operator")

                                       and

                               Tirex America Inc.
                               740 St. Maurice, Suite 201
                               Montreal, Quebec   H3C 1L5
                               Tel: (514) 878-0727;
                               Fax: (514) 878-9847
                                                            (the "Manufacturer")

Whereas,  the Manufacturer  and the Operator are parties to a certain  equipment
lease and purchase  agreement,  of even date herewith (the "Equipment  Lease and
Purchase  Agreement"),  between the Manufacturer and the Operator respecting the
sale by the Manufacturer and the Purchase by the Operator of the "Nonproprietary
Equipment" and the operating lease, between the Manufacturer, as lessor, and the
Operator, as lessee,  respecting the "Proprietary Equipment", as those terms are
defined in the said Equipment Lease and Purchase Agreement.

     Whereas,  in  consideration  for the premises and the mutual  promises made
therein,  the Operator has agreed,  pursuant to the Equipment Lease and Purchase
Agreement, to enter into this


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<PAGE>

Option  Agreement with the  Manufacturer  pursuant to which the Operator  hereby
grants to the  Manufacturer  the option to purchase up to forty percent (40%) of
the rubber  crumb  yielded  by the  disintegration  of scrap  tires in the TCS-1
System which is the subject of the said Equipment  Lease and Purchase  Agreement
(the "Subject TCS-1 System").

Now, Therefore, it is agreed as follows:

1.   Definitions

     1.2 "Manufacturer" shall mean Tirex America Inc. and Tirex-Canada ( 3143619
Canada, Inc.), and all other corporations,  partnerships, or other entities, now
or in the future  controlled  by, under common  control  with, or in control of,
Tirex America Inc., jointly and severally.

     1.3 "Operator" shall mean Recycletron Inc. and its successors and assigns.

     1.4 All other Capitalized terms used herein and not otherwise defined shall
have the  respective  meanings  attributed  thereto in the  Equipment  Lease and
Purchase Agreement.

2.   Grant of Option

     The Operator hereby grants to the  Manufacturer an option (the "Option") to
purchase  up to  forty  percent  (40%)  of  the  rubber  crumb  yielded  by  the
disintegration  of scrap tires in the Subject  TCS-1 System (the  "Rubber  Crumb
Output").

3.   Term of Option

     The term of the Option shall be coextensive  with the term of the Equipment
Lease and Purchase Agreement.

4.   Conditions of Option

     The  Manufacturer's  rights to purchase the Rubber Crumb Output pursuant to
this Option shall be subject to fulfillment of the following condition:

     (a)  the  Manufacturer  shall furnish to the Operator,  in writing,  within
          ninety days of the  Acceptance  Date and every six months  thereafter,
          the Manufacturer's


                                      282
<PAGE>

          anticipated  purchase  projections (the "Six-Month  Projected Purchase
          Order")  specifying the grades,  types, and quantities of Rubber Crumb
          Output which the Manufacturer commits to purchase within the six-month
          period following the date of such Projected Purchase Order;

     the  price  specified in the  Projected  Purchase  Order will be negotiated
          every six months for a period of six months.

5.   Inspection of Books

     Upon written request,  the Manufacturer or his designated agent may examine
the books and  records of the  Operator  insofar as they  relate to this  Option
Agreement. Such examination shall take place at the offices of the Operator ( to
be determined by the Operator).

6.   Assignment

     6.1 This Option  Agreement  may not be assigned by the  Operator  except as
part of the assignment of the Equipment Lease and Purchase Agreement,  which may
only be assigned  pursuant to the express written  consent of the  Manufacturer,
and any such  assignment  shall not  relieve  the  Operator  of its  obligations
hereunder unless expressly waived in writing by the Manufacturer.

     6.2  This  Option  Agreement  may be  transferred,  assigned,  pledged,  or
hypothecated  by the  Manufacture  as  part  of the  sale  of  its  business  or
otherwise.

7.   Notices

     All notices  required or permitted to be given hereunder shall be mailed by
certified mail, or delivered by hand or by recognized  overnight  courier to the
party to whom such notice is required or permitted to be given  hereunder at the
address  set forth  above for such  party,  in all cases with  written  proof of
receipt  required.  Any such  notice  shall be deemed to have  been  given  when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the  receiving  party.  Either  party may change the address to which
notice to it is to be  addressed,  by  written  notice to the  other  party,  as
provided herein.


                                      283
<PAGE>

8.   Binding Effect.

     8.1 This  Option  Agreement  shall  bind and  inure to the  benefit  of the
parties  hereto  and their  respective  legal  representatives,  successors  and
assigns, provided, however, that this Option Agreement cannot be assigned by the
Operator except in accordance with Section 6.1 hereof.  Nothing herein expressed
or implied  is  intended  or shall be  construed  to confer  upon or to give any
person,  firm or corporation  other than the parties hereto and their respective
legal representatives, successors and assigns any rights or benefits under or by
reason of this Option Agreement.

     8.2 All the right,  title,  and  interest  of the  Manufacturer  under this
Option  Agreement  may be  enforced by the  Manufacturer,  its  successors,  and
assigns.  This  Option  Agreement  shall  continue  in  full  force  and  effect
notwithstanding  the death,  incapacity,  or  dissolution of the Operator or the
increase,  decrease,  or change in the  personnel of or members of the Operator,
and  shall be  binding  upon  the  Operator  and the  Operator's  estate,  legal
representatives, heirs, and successors.

9.   Further Assurances

     At any time, and from time to time,  after the execution of this Agreement,
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.

10.  Waiver

     Any  failure  on the part of any party  hereto  to  comply  with any of its
obligations,  agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.

11.  Brokers

     Neither  party has  employed  any  brokers or finders  with  regard to this
Agreement, unless otherwise described in writing to all parties hereto.

12.  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.


                                      284
<PAGE>

13.  Governing Law

     This Agreement shall be governed by the laws of the State of Delaware.

Entire Agreement

     This Agreement and the premises and mutual  promises in the Equipment Lease
and Purchase  Agreement  constitute the entire agreement of the parties covering
everything  agreed upon or understood  with respect to the Option.  There are no
oral promises, conditions, representations,  understandings,  interpretations or
terms of any kind as conditions or inducements to the execution hereof.

15.  Severability

     If any part of this Agreement is deemed to be unenforceable  the balance of
this Agreement shall remain in full force and effect.

16.  Publicity

     All  notices  to third  parties  and all  other  publicity  concerning  the
transactions  contemplated  by this  Agreement  shall be  subject  to the  prior
approval of counsel to the Manufacturer.

17.  Counterparts

     This  Agreement may be executed in any number of  counterparts  and by each
party on a separate  counterpart,  each of which when so executed and  delivered
shall be an original, but all of which together shall constitute one Agreement.


                                      285
<PAGE>

     In Witness Whereof, the parties hereto have caused this Option Agreement to
be executed the day and year first above written. whatsoever.

                                       TIREX AMERICA INC.

                                       By    /s/ Terence C. Byrne
                                          --------------------------------
                                          Terence C. Byrne, President

                                       RECYCLETRON INC.

                                       By   /s/  David Bishop
                                          --------------------------------
                                          David Bishop, President


                                      286
<PAGE>

(Exhibit to Equipment Lease and Purchase Agreement with Recyclatron Inc.)

                               TIREX AMERICA INC.

                                   ----------

         Royalty Agreement, made this 8th day of July ,1997 between:

                               Recycletron Inc.
                               770, rue Mill
                               Montreal, PQ
                               H3C 1Y3
                               Tel:  (514) 937-9565
                               Fax:  (514) 933-1575
                                                            (the "Operator")
                                       and

                               Tirex America Inc.
                               740 St. Maurice, Suite 201
                               Montreal, Quebec H3C 1L5
                               Tel: (514) 878-0727; Fax: (514) 878-9847
                                                            (the "Manufacturer")

     Whereas,  the  Manufacturer  and the  Operator  are  parties  to a  certain
equipment  lease and purchase  agreement,  of even date herewith (the "Equipment
Lease and  Purchase  Agreement"),  between  the  Manufacturer  and the  Operator
respecting the sale by the  Manufacturer and the Purchase by the Operator of the
"Proprietary Front-End System", the "Nonproprietary Equipment"(collectively, the
"Purchased  Equipment") and the operating lease,  between the  Manufacturer,  as
lessor,  and  the  Operator,  as  lessee,  respecting  the  "Leased  Proprietary
Equipment",  as those terms are defined in the said Equipment Lease and Purchase
Agreement.

     Whereas,  in  consideration  for the premises and the mutual  promises made
therein,  the Operator has agreed,  pursuant to the Equipment Lease and Purchase
Agreement,  to enter into this Royalty  Agreement with the Manufacturer  whereby
the Operator will pay to the Manufacturer  certain royalties calculated upon the
gross proceeds from all sales of rubber crumb,  fiber and steel from scrap tires
disintegrated  by the TCS-1  System  which is the subject of the said  Equipment
Lease and Purchase Agreement (the "Subject TCS-1 System").


                                      287
<PAGE>

Now, Therefore, it is agreed as follows:

1.   Definitions

     1.2 "Manufacturer"  shall mean Tirex Americ Inc. and Tirex-Canada ( 3143619
Canada, Inc.), and all other corporations,  partnerships, or other entities, now
or in the future  controlled  by, under common  control  with, or in control of,
Tirex America Inc., jointly and severally.

     1.3 "Operator" shall mean Recycletron Inc. and its successors and assigns.

     1.4 All other Capitalized terms used herein and not otherwise defined shall
have the  respective  meanings  attributed  thereto in the  Equipment  Lease and
Purchase Agreement.

2.   Royalty Fee

     2.1 The Operator shall pay to the Manufacturer,  not more than fifteen (15)
days after the end of each month, a royalty fee equal to two percent (2%) of the
gross proceeds from all sales of rubber crumb, fiber, and steel from scrap tires
disintegrated by the Subject TCS-1 System (the "Royalty Fee").

     2.2 For purposes of this Royalty Agreement, the term "gross proceeds" shall
mean all  revenues  from the sale of rubber  crumb,  fiber and steel  from scrap
tires disintegrated by the Subject TCS-1 System.

3.   Payment Periods

     Royalty Fees shall be reported and paid by the Operator to the Manufacturer
every month from the Acceptance Date for a period which is coextensive  with the
term of the Equipment Lease and Purchase Agreement.

4.   Royalty Reports

     The Operator  shall prepare  royalty  reports  ("Royalty  Reports"),  to be
delivered by the Operator to the Manufacturer, together with the Royalty Fee due
thereunder,  covering the  immediately  preceding  "Reporting  Periods",  in the
following manner:

     The  initial  Reporting  Period shall be the Reporting  Period in which the
          Acceptance  Date  falls.  For  example,  if  the  Acceptance  Date  is
          September 15, 1997, the initial


                                      288
<PAGE>

          Reporting  Period is the two-week  period which commenced on September
          15, 1997 and ended on September 30, 1997,  and the Royalty  Report and
          Royalty Fee for such "Reporting Period" is due on October 15, 1997.

     (b)  Each Royalty  Report shall  disclose the gross revenues from all sales
          of steel,  fiber,  and rubber crumb  produced by the  operation of the
          Subject TCS-1 System and the amount of the Royalty Fee calculated upon
          the gross proceeds therefrom.

5.   Inspection of Books

     Upon written request,  the Manufacturer or his designated agent may examine
the books and records of the  Operator  insofar as they  relate to this  Royalty
Agreement.  Such examination  shall take place at the offices of the Operator at
(To be determined by the Operator)

6.   Assignment

     6.1 This Royalty  Agreement  may not be assigned by the Operator  except as
part of the assignment of the Equipment Lease and Purchase Agreement,  which may
only be assigned  pursuant to the express written  consent of the  Manufacturer,
and any such  assignment  shall not  relieve  the  Operator  of its  liabilities
hereunder unless expressly waived in writing by the Manufacturer.

     6.2 This  Royalty  Agreement  may be  transferred,  assigned,  pledged,  or
hypothecated  by the  Manufacture  as  part  of the  sale  of  its  business  or
otherwise.

7.   Notices

     All notices  required or permitted to be given hereunder shall be mailed by
certified mail, or delivered by hand or by recognized  overnight  courier to the
party to whom such notice is required or permitted to be given  hereunder at the
address  set forth  above for such  party,  in all cases with  written  proof of
receipt  required.  Any such  notice  shall be deemed to have  been  given  when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the  receiving  party.  Either  party may change the address to which
notice to it is to be  addressed,  by  written  notice to the  other  party,  as
provided herein.


                                      289
<PAGE>

8.   Binding Effect.

     8.1 This  Royalty  Agreement  shall  bind and inure to the  benefit  of the
parties  hereto  and their  respective  legal  representatives,  successors  and
assigns,  provided,  however,  that this Royalty Agreement cannot be assigned by
the  Operator  except in  accordance  with  Section 6.1 hereof.  Nothing  herein
expressed or implied is intended or shall be construed to confer upon or to give
any  person,  firm or  corporation  other  than the  parties  hereto  and  their
respective legal representatives,  successors and assigns any rights or benefits
under or by reason of this Royalty Agreement.

     8.2 All the right,  title,  and  interest  of the  Manufacturer  under this
Royalty  Agreement  may be enforced by the  Manufacturer,  its  successors,  and
assigns.  This  Royalty  Agreement  shall  continue  in full  force  and  effect
notwithstanding  the death,  incapacity,  or  dissolution of the Operator or the
increase,  decrease,  or change in the  personnel of or members of the Operator,
and  shall be  binding  upon  the  Operator  and the  Operator's  estate,  legal
representatives, heirs, and successors.

9.   Further Assurances

     At any time, and from time to time,  after the execution of this Agreement,
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.

10.  Waiver

     Any  failure  on the part of any party  hereto  to  comply  with any of its
obligations,  agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.

11.  Brokers

     Neither  party has  employed  any  brokers or finders  with  regard to this
Agreement, unless otherwise described in writing to all parties hereto.


                                      290
<PAGE>

12.  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.

13.  Governing Law

     This Agreement shall be governed by the laws of the State of Delaware.

14.  Entire Agreement

     This Agreement and the premises and mutual  promises in the Equipment Lease
and Purchase  Agreement  constitute the entire agreement of the parties covering
everything agreed upon or understood with respect to the Royalty Fees. There are
no oral promises, conditions, representations,  understandings,  interpretations
or terms of any kind as conditions or inducements to the execution hereof.

15.  Severability

     If any part of this Agreement is deemed to be unenforceable  the balance of
this Agreement shall remain in full force and effect.

16.  Publicity

     All  notices  to third  parties  and all  other  publicity  concerning  the
transactions  contemplated  by this  Agreement  shall be  subject  to the  prior
approval of counsel to the Manufacturer.

17.  Counterparts

     This  Agreement may be executed in any number of  counterparts  and by each
party on a separate  counterpart,  each of which when so executed and  delivered
shall be an original, but all of which together shall constitute one Agreement.


                                      291
<PAGE>

In Witness Whereof,  the parties hereto have caused this Royalty Agreement to be
executed the day and year first above written. whatsoever.

    TIREX AMERICA INC.                     RECYCLETRON INC.

    By    /s/ Terence C. Byrne             By   /s/ David Bishop
       ---------------------------           -----------------------
       Terence C. Byrne, President           David Bishop, President


                                      292