EXHIBIT 10(llll)



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                                   ----------

                               TIREX AMERICA INC.

                                   ----------


                     EQUIPMENT LEASE AND PURCHASE AGREEMENT


     Equipment Lease and Purchase Agreement, made as of this 29th day of May
1997, among


                             Ocean  Venture III  Inc.,
                             a New Jersey corporation,
                             1497 Lakewood Road
                             Toms River, N.J. 08755
                                                                (the "Operator")

                                       and

                             Tirex America Inc.
                             3767 Thimens, Suite 207
                             Ville St. Laurent
                             Quebec, Canada H4R 1W4
                                                            (the "Manufacturer")


1. DEFINITIONS

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

     1.2  "Anticipated  Delivery Date" for each of the eight TCS-1 Systems to be
purchased and leased  hereunder shall mean the respective dates set forth below,
or such other dates as the parties shall mutually agree:


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                    Equipment                    Anticipated Delivery MonthYear
                    ---------                    ------------------------------
                  TCS-1 System 001                       October 1998
                  TCS-1 System 002                       January 1999
                  TCS-1 System 003                       April 1999
                  TCS-1 System 004                       July 1999
                  TCS-1 System 005                       October 1999
                  TCS-1 System 006                       January 2000
                  TCS-1 System 007A                      April 2000
                  TCS-1 System 008                       July 2000

     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
                (v)      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 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:

          (a)  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;
               and


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          (b)  freezing  chambers and cryogenic  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  Ocean   Venture  III  Inc.  and  all  other
corporations,  partnerships,  or other entities, now or in the future controlled
by, under common control with, or in control of, Ocean Venture III Inc.


     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.

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

     1.10 "Site" with respect to each of the eight TCS-1 Systems to be purchased
and leased  hereunder shall mean the Operator's  premises at 1497 Lakewood Road,
Tom's River, NJ 08755, or such other site as the parties shall agree.

     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  Nonproprietary  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 The Operator is a Corporation  organized  for the principal  purpose of
commercially   exploiting,   directly  or   indirectly,   through  one  or  more
subsidiaries, the TCS-1 System by


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purchasing the NonLeased Proprietary  Equipment,  leasing the Leased Proprietary
Equipment, and operating the TCS-1 System.

     2.3 The  Manufacturer  and the  Operator  are  parties to a certain  Letter
Agreement,  dated  October  5,  1995,  between  them  (the  "Letter  Agreement")
respecting the purchase  and/or lease by the Operator of a TCS-1 System from the
Manufacturer.

     2.4 The parties  hereto wish to terminate the Letter  Agreement and restate
the terms and conditions of the transactions contemplated therein this Equipment
purchase and Lease Agreement in accordance with Section 20 of this agreement.


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  for  eight  TCS-1  Systems  (collectively,  the
"Purchased  Agreement"),  above,  in accordance with the terms and conditions of
this  Agreement.  The Operator may at its election  take title to the  Purchased
Equipment for each of the said eight TCS-1 Systems 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")
for each of the eight TCS-1 Systems,  installed and set in operation pursuant to
Section 7 and 8 hereof,  shall be the sum of two million  United States  dollars
(US $2,250,000), FOB Montreal, which shall be deemed allocated as follows:

         (a)      Freezing Chamber and
                   Cryogenic Systems                US $ 1,500,000

         (b)      Front End Tire Preparation
                   and Bailing Systems              US $   750,000
                                                          --------
                                           Total    US $ 2,250,000


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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 of the Purchased
Equipment  for each of the  eight  TCS-1  Systems  being  purchased  and  leased
hereunder shall be paid as follows:

     (a)  US $ 25,000 14 months prior to the Anticipated Delivery Date;

     (b)  US $ 50,000 6 months prior to the anticipated Delivery Date.

     (c)  US $ 100,000 3 months prior to the anticipated Delivery Date.

     (d)  US $ 2,075,000 on the Acceptance Date.

     3.3.2 Where the Operator has entered into  arrangements,  in respect of any
of the eight TCS-1 Systems being  purchased and leased  hereunder,  for lease or
letter of credit  financing , satisfactory to the  Manufacturer,  payment of the
Purchase  Price with respect to such TCS-1  System  shall be made in  accordance
with such lease or letter of credit financing arrangements.


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


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          of one year with  further  successive  automatic  one-year  extensions
          subject to either  party's right to terminate this Lease at the end of
          any  extension  year by at  least  90 days  prior  written  notice  of
          termination of the other; or

     (c)  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.

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.


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         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
           Monthly Rental Payments       Payment 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.

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;


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     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.

     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

     Within thirty (30) days of execution of this  Agreement,  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;


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     (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

6.3 Notice to Inspect

     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.



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7. DELIVERY AND INSTALLATION

7.1 Delivery

     7.1.1 If, by a date not later than fifteen  business  days prior to each of
the Anticipated  Delivery Dates,  the Site is in conformance  with the Site Plan
Specifications  and all  legal  requirements  have been met in  accordance  with
Section 6.4, above,  then the  Manufacturer  shall deliver the respective  TCS-1
System,  which has been assigned for such Anticipated Delivery Date, to the Site
on or before the  applicable  Anticipated  Delivery  Date set forth in Paragraph
1.2, above.

     7.1.2 In the event that the  Operator  shall not meet the  requirements  of
Paragraph  7.1.1,  above for any of the eight  respective  TCS-1  Systems  to be
purchased  and leased  hereunder,  for  delivery  not later than the  particular
Anticipated  Delivery  Date assigned to such System,  then,  within ten business
days of the date  when the  respective  Site Plan  Specifications  and all legal
requirements  have been met, the  Manufacturer  shall  reschedule a new delivery
date for that  particular  TCS-1  System,  which new delivery  date shall not be
later than fourteen months from the date of such rescheduling.

     7.1.3  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.

     7.1.4 In the event that delivery of the TCS-1 System,  or any part thereof,
for a period not exceeding sixty (60) 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 5 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  Nonproprietary  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.


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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.

8.2 Test Period

     8.2.1  Immediately  upon giving  notice to the  Operator  that a particular
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 such 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 each of the TCS-1 Systems,  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 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  NonLeased  Proprietary  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  thirty  (30)  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


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failure of the Operator to have brought the Site into  conformance with the Site
Plan Specifications.

     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 Nonproprietary 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.

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


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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 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


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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

     The Operator is (i) duly  organized  corporation,  validly  existing and in
good standing under the laws of the State of New Jersey;  (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.

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.


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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 $500,000,  or such other amount that the parties  shall agree is required for
replacement costs, and obtain public liability  insurance with minimum limits of
$500,000 per occurrence and $1,000,000  collectively,  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 insured parties 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.

     11.5.2  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 TCS-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,  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


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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 three percent (3%) 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(b) 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.


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         11.10.2 In addition, the Operator will, at such time during the term of
  the Lease as the Manufacturer shall request, in further consideration of the
premises and the mutual  promises  and  agreements  made  herein,  enter into an
agreement with the Manufacturer or such person, corporation,  firm, partnership,
or other  entity as the  manufacturer  shall  appoint in its stead,  pursuant to
which the Operator  shall agree to sell up to forty  percent (40%) of the rubber
crumb to the  Manufacturer or such person as the  Manufacturer  shall appoint in
its stead:

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;

               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;


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<PAGE>

     (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;

     (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.


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<PAGE>

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  forty-five (45) 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 ("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


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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,  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.


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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  thirty-day   period   following  the
Manufacturer's receipt of such notice;

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.


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<PAGE>

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.

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 19.1(a) to this
               Agreement;

          (ii) the  Royalty  Agreement,  attached  as  Schedule  19.1(b) to this
               Agreement; and


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<PAGE>
<PAGE>

          (iii)the Rubber Crumb Purchase Agreement, attached as Schedule 19.1(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.

18.  ARBITRATION

     All  controversies  arising out of or relating  to this  Agreement,  or any
modification thereof, shall be settled by arbitration in New York City, pursuant
to the rules then obtaining of the American Arbitration Association.

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.


                                      239
<PAGE>

     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.  TERMINATION OF LETTER AGREEMENT BETWEEN THE MANUFACTURER AND OPERATOR

     The parties  agree that their  mutual  execution of this  Agreement,  shall
automatically cause the Letter Agreement, dated October 5, 1995, to be canceled,
terminated,  void and of no further  force or effect of the end that the parties
hereto shall have no further  obligations or  liabilities  under the said Letter
Agreement,  one against the other, and in consideration of the agreement of each
of the  parties  hereto,  each  of the  parties  does  hereby  remise,  release,
discharge,  indemnify and hold harmless the other party,  and each  shareholder,
officer, director, affiliate, associate, agent, and employee of such other party
of and from manner of actions and cause of action, suits, debts, dues, accounts,
bonds, wages, benefits, covenants, contracts, agreements,  judgments, claims and
demands  whatsoever in law or in equity,  and including  without  limitation all
such  actions,  claims and demands,  etc.  arising out of, being based upon,  or
being in any way connected with or related to the Letter Agreement.

21.  GENERAL

21.1 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.

21.2 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.

21.3 Brokers

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


                                      240
<PAGE>

21.4 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.

21.5 Governing Law

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

21.6 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.

21.7 Severability

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

21.8 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.

21.9 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.


                                      241
<PAGE>

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

                                       Tirex America Inc.

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

                                       OCEAN  VENTURE III  INC.,

                                       By    /s/ Louis Sanzaro
                                          ---------------------------------
                                          Louis Sanzaro, President
 

                                      242
<PAGE>

(Exhibit to Equipment Lease and Purchase Agreement with Ocean Venture III, Inc.)

                               TIREX AMERICA INC.

                                   ----------

                     RUBBER CRUMB PURCHASE OPTION AGREEMENT

                                   ----------

     Rubber Crumb Purchase  Option  Agreement,  made this 5th day of March 1996,
between:

                               Ocean Venture III, Inc.
                               1497 Lakewood Road
                               Toms River, N.J.   08755
                               Tel: (908) 244-1716
                               Fax: (908) 914-0373

                                                            (the "Operator")
                                       and

                               Tirex America Inc.
                               3767 Thimens, Suite 207
                               Ville St. Laurent
                               Quebec, Canada H4R 1W4
                                                            (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 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


                                      243
<PAGE>

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 its  successors  and
assigns.

     1.3  "Operator"  shall mean Ocean Venture III, 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 life of the Subject
TCS-1 System and shall commence as of the Acceptance Date.

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  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.


                                      244
<PAGE>

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 at
______________________________________.

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.

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.


                                      245
<PAGE>

     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.

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


                                      246
<PAGE>

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.

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

                                       TIREX AMERICA INC.

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

                                       OCEAN  VENTURE III  INC.,

                                       By    /s/ Louis Sanzaro
                                           --------------------------------
                                           Louis Sanzaro, President


                                      247
<PAGE>

(Exhibit to Equipment Lease and Purchase Agreement with Ocean Venture III, Inc.)

                               Tirex America Inc.

                                   ----------

                                ROYALTY AGREEMENT

                                   ----------

         Royalty Agreement, made this 5 day of March 1997, between:

                               Ocean Venture III, Inc.
                               1497 Lakewood Road
                               Toms River, N.J.   08755
                               Tel: (908) 244-1716
                               Fax: (908) 914-0373
                                                            (the "Operator")

                                       and

                               Tirex America Inc.
                               3767 Thimens, Suite 207
                               Ville St. Laurent
                               Quebec, Canada H4R 1W4
                                                            (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
AProprietary Front-End System@, the "Nonproprietary Equipment"(collectively, the
APurchased  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


                                      248
<PAGE>

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").  Now,
Therefore, it is agreed as follows:

1.   Definitions

     1.2  "Manufacturer"  shall mean Tirex America Inc. and its  successors  and
assigns.

     1.3  "Operator"  shall mean Ocean Venture III, 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 three  percent (3%) 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  throughout the life of the Subject TCS-1
System.

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  Reporting  Period is the two-week
              period which commenced on September 15, 1997


                                      249
<PAGE>

              and ended on  September  30,  1997,  and the  Royalty  Report  and
              Royalty  Fee for such  AReporting  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
______________________________________________.

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.


                                      250
<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.


                                      251
<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.


                                      252
<PAGE>

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

                                       TIREX AMERICA INC.

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

                                       OCEAN  VENTURE III  INC.,

                                       By    /s/ Louis Sanzaro
                                          --------------------------------
                                          Louis Sanzaro, President


                                      253