EXHIBIT 10 (ii)


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MEMORANDUM OF AGREEMENT  MADE AND ENTERED INTO THIS ELEVENTH DAY OF DECEMBER ONE
THOUSAND NINE HUNDRED AND NINETY-EIGHT.

B E T W E E N:    IM(2) MERCHANDISING AND MANUFACTURING INC., a body politic and
                  corporate,  duly  incorporated  and  having  its  office at 60
                  Morgan  Road,  Baie  d'Urfe,  Quebec  H9X 3A4,  herein  acting
                  through and  represented  by DAVID  SINCLAIR,  its  PRESIDENT,
                  hereunto duly authorized as he so declares,

                  Hereinafter called the "COMPANY"

                                                               OF THE FIRST PART

A N D:            THE  TIREX  CORPORATION   CANADA  INC.,  a  body  politic  and
                  corporate,  duly incorporated and having its office at 740 St.
                  Maurice St.,  Montreal,  Quebec H3C 1L5. herein acting through
                  and represented by TERENCE C. BYRNE,  its PRESIDENT,  hereunto
                  duly authorized as he so declares,

                  Hereinafter called the "MANUFACTURER"

                                                              OF THE SECOND PART

WHEREAS the Company is a corporation  whose principals have a certain  expertise
in the  manufacture  of "crumb"  rubber  welcome mats and related  products (the
"Goods");

WHEREAS the Manufacturer is presently a tire processing  company and is desirous
of establishing a manufacturing facility with respect to the Goods;

WHEREAS the Company has the sales and  marketing  expertise to sell the Goods in
North America and elsewhere; and

WHEREAS the Company has entered into a contract for the sale of the Goods to The
Akro Corporation of Canton, Ohio, U.S.A., ("Akro");

WHEREAS the  Company has  acquired  from Akro the  exclusive  license to use the
molds and tooling  described in Exhibit B to the Akro contract (the "Proprietary
Designs");


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WHEREAS the parties are  desirous  of  entering  into an  agreement  whereby the
Manufacturer  shall  manufacture  the Goods for sale to the Company on the terms
and conditions hereinafter set forth.

NOW, THEREFORE,  WITNESSETH THAT FOR AND IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL PROMISES AND COVENANTS  HEREIN  CONTAINED THE PARTIES HERETO AGREE AS
FOLLOWS:

ARTICLE 1 PREAMBLE

1.1   The above  preamble  hereto shall be deemed to form part of this Agreement
      as if incorporated in the body hereof.

ARTICLE 2 DEFINITIONS

2.1     "Akro Contract" means the contract  entered into between the Company and
        Akro on the 26th day of November 1998, a copy of which is annexed hereto
        as Appendix I.

2.2     The term  "Manufacturer",  as used herein  shall,  unless the context of
        this  Agreement  necessarily  requires  otherwise,  include not only The
        Tirex  Corporation  Canada  Inc.,  but also  The  Tirex  Corporation,  a
        Delaware  corporation  with offices at 740 St.  Maurice  St.,  Montreal,
        Quebec, H3C 1L5, and all other corporations, partnerships and such other
        entities now or in the future  control by, under common control with, or
        in control of The Tirex Corporation, jointly and severally.

ARTICLE 3 EXCLUSIVE DEALINGS

3.1     The Manufacturer shall manufacture the Goods exclusively for the Company
        using the tooling and molds provided to the  Manufacturer by the Company
        from time to time in accordance with the samples which the  Manufacturer
        has   heretofore   delivered  to  the  Company  and  which  the  Company
        acknowledges  as having been  accepted and approved  and, in  accordance
        with such other  samples as may be approved by the Company  from time to
        time in the future.

3.2     The  Company  shall  purchase  exclusively  from the  Manufacturer  such
        quantities   of  the  Goods  as  shall  satisfy  all  of  the  Company's
        requirements  for  resale  during the term of this  Agreement  both with
        respect  to the Akro  Contract  as well as all  other  customers  of the
        Company.  The following sales goals are estimates for planning  purposes
        only and reflect the quantities  which the Company  anticipates  that it
        will be obliged to deliver to Akro in  accordance  with the terms of the
        Akro  Contract  and  reflecting  the prices  which the Company  shall be
        charging to Akro.  Such sales goals do not however reflect the Company's
        requirements for sales to parties other than Akro and which, for greater
        certainty, are hereby declared to be subject to all of the provisions of
        this Agreement unless the context hereof clearly indicates the contrary.


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                Calendar Year                      Amount - U.S. Dollars
                -------------                      ---------------------

                    l999                               $1,525,000
                    2000                                3,000,000
                    2001                                5,000,000
                    2002                                7,500,000
                    2003                                7,500,000

        The  Manufacturer  acknowledges  that  it has  taken  cognizance  of the
        provisions of paragraph 5 of the Akro Contract which not only sets forth
        the  sales  goals of such  contract,  but also the  consequences  of the
        failure to meet a sales goal thereunder.  The Manufacturer  acknowledges
        that if Akro fails to meet a sales goal as set forth in  paragraph  5 of
        the Akro  Contract,  and is  consequently  given an extension of six (6)
        months to cure a shortfall,  that the sales goals set forth above may be
        modified accordingly. It is expressly understood that the failure of the
        Manufacturer  to meet a sales goal shall not constitute a default by the
        Manufacturer under this Agreement.

3.3     The  Company's   obligations  to  purchase  all  of  such   requirements
        exclusively from the Manufacturer  shall be subject to the provisions of
        Section 5.6 hereof.

3.4     The Manufacturer  shall sell exclusively to the Company all of the Goods
        manufactured by the Manufacturer during the term of this Agreement.

3.5     The Company  shall have the right to determine the quantity of the Goods
        which the  Manufacturer  is  obliged  to  manufacture  in virtue of this
        Agreement  provided that in the event that such quantity exceeds by more
        than twenty-five percent (25%) the minimums specified above, the Company
        shall  give not less than  ninety  (90) days  notice of such  additional
        requirements.  The Manufacturer's  obligations to supply such additional
        requirements,  and all other  obligations of the Manufacturer  hereunder
        relating to delivery  schedules and  quantities  shall be subject to the
        fulfilment  by the Company in a timely manner of its  obligations  under
        this Section 3.5 and Sections 4.1.1 and 5.5 below.

ARTICLE 4 OBLIGATIONS OF THE COMPANY

4.1     It shall be the obligation of the Company to do all of the following:

        4.1.1   to supply,  without charge to the Manufacturer,  all tooling and
                molds  which may be  required  by the  Manufacturer  in order to
                manufacture the Goods, it being understood that such tooling and
                molds shall remain the property of the Company.  The  obligation
                of the  Company  to  supply  such  tooling  and  molds  shall be
                fulfilled in a timely  manner so as not to impede the ability of
                the  Manufacturer  to fulfil  its  obligations  under  Article 3
                within the required time frame;


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        4.1.2   to actively promote the sale and marketing of the Goods;

        4.1.3   to make all  decisions in its  reasonable  discretion  conceding
                credit to  customers of the Goods and to collect all proceeds of
                sale;

ARTICLE 5 LICENSE

5.1     The Company  hereby  grants to the  Manufacturer  an  exclusive  license
        throughout  the term of this  Agreement to use,  develop and improve any
        and all molding equipment based upon the Proprietary Designs but subject
        to the rights of Akro with respect thereto.

5.2     The  Manufacturer  shall pay to the  Company a  license  fee of  SEVENTY
        THOUSAND CANADIAN DOLLARS ($70,000.00 Canadian), as follows:

        5.2.1   The  sum  of  THIRTY  THOUSAND  DOLLARS  ($30,000.00)  upon  the
                execution of this Agreement; and

        5.2.2   A further sum of FORTY THOUSAND DOLLARS ($40,000.00) which shall
                be paid by the Manufacturer on behalf of the Company directly to
                the  Company's  employee  Sean  Khodadad,  at  the  rate  of Ten
                Thousand Dollars  ($10,000.00) per month in advance,  commencing
                with  the  date of the  signature  of this  Agreement,  it being
                understood   that  the  said  Sean  Khodadad  shall  assist  the
                Manufacturer in setting up its  manufacturing  facility and that
                all of the expenses of the said Sean Khodadad during such period
                shall  be paid by the  Manufacturer  as  well,  on a  reasonable
                basis.

5.3     It shall be the obligation of the  Manufacturer to manufacture the Goods
        in a timely  manner  in  accordance  with the  standards  necessary  and
        desirable for the purposes of this  Agreement and in such  quantities as
        shall be required to meet the demand of the  Company's  customers in the
        Territory (unless such quantities  exceed the manufacturing  capacity of
        the  Manufacturer).  The Goods shall be  manufactured in accordance with
        the samples annexed hereto as Appendix II;

5.4     The Manufacturer  acknowledges  that its  manufacturing  capacity is, or
        shortly shall be sufficient to meet the Company's  delivery  obligations
        under the Akro Contract and more  particularly the delivery schedule set
        forth in Exhibit D thereof.  Furthermore,  the  Manufacturer  undertakes
        that it will be in a position to supply ten thousand  (10,000)  mats per
        week on or before February 15th, 1999, and twenty thousand (20,000) mats
        per week by March 15th, 1999. Failure by the Manufacturer to comply with
        such undertaking shall entitle the Company to demand a penalty of Twenty
        Thousand Dollars  ($20,000.00) for each week of delay up to a maximum of
        four (4) weeks.  Should such delay  exceed  four (4) weeks,  the Company
        shall have the option to terminate  this  Agreement by simple  notice to
        the Manufacturer.


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5.5     The  Manufacturer  shall  have  the  right to  cause  its  manufacturing
        obligations to be performed, in part, by third parties, with the consent
        of the Company, which shall not be unreasonably withheld, and subject to
        the proviso that the  Manufacturer and such third party shall be jointly
        and severally  liable for the  fulfilment of all  obligations  hereunder
        relating  to  the  manufacture  of the  Goods  to the  extent  that  the
        manufacture  of such Goods is carried out by such third party,  and with
        the future proviso that the Company shall receive a written  undertaking
        from the  Manufacturer  and such third party confirming the foregoing at
        the time that such consent is requested.  The obligations of the Company
        to provide tooling and molds to the Manufacturer  shall apply as well to
        any such third party.

5.6     In the event that the  Manufacturer  is unable to supply any  additional
        needs of the  Company  then the  Company  within  the time frame of this
        Agreement and\or within the time frame of the Akro Contract, the Company
        shall  be  free  to  purchase  Goods  elsewhere  to  the  extent  of the
        shortfall.

5.7     It shall be the  responsibility  of the  Manufacturer to pay the cost of
        purchasing and\or leasing all of the machinery or equipment required for
        the  manufacture  of the Goods other than tooling and molds  referred to
        above, it being understood that such machinery and\or equipment shall be
        and remain the property of the Manufacturer or the lessor of same.

ARTICLE 6 TERM OF AGREEMENT

6.1     The term of this  Agreement  shall commence as at January 1st, 1999, and
        shall continue for a period of FIVE (5) YEARS, unless terminated earlier
        in accordance  with the  provisions  hereof.  The Company shall have the
        option  to extend  the term of this  Agreement  for a further  period of
        three (3) years by giving notice of such  extension to the  Manufacturer
        not later than December 31st,  2002, and a further option to extend this
        Agreement  for a subsequent  term of three (3) years by giving notice to
        the Manufacturer not later than December 31st, 2005.

ARTICLE 7 PRICE AND PAYMENT

7.1     The price  payable by the  Company  for the Goods  shall  consist of the
        aggregate of:

        7.1.1   the manufacturing costs ("Manufacturing Costs") of the Goods, as
                indicated in Appendix I hereof.  Said  Manufacturing  Costs have
                been  agreed by the  parties  and  include  the  overhead of the
                Manufacturer  which is  comprised  only of the  items  listed in
                Appendix II hereof; plus

        7.1.2   the cost of shipping the Goods to the warehouse of the Company's
                customer including,  if applicable,  duties,  brokerage fees and
                charges of like nature ("Shipping Costs"); plus


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        7.1.3   forty-five percent (45%) of the profits as hereinafter  defined.
                The term  "profits"  shall mean the resale price  charged by the
                Company to its customers as set forth in the Company's  invoices
                (excluding  sales taxes,  value added taxes,  and other items of
                like nature which are charged to such  customers and remitted by
                the Company to the taxing authorities);  minus the Manufacturing
                Costs and Shipping Costs of the Goods in question.

        Such  price  shall  be  paid  by  the  Company  to the  Manufacturer  in
        accordance  with the  provisions  of Section 7.3 below.  For purposes of
        this  Agreement  the term  "profits"  shall mean the total  resale price
        charged by the Company to Akro under the terms of the Akro  Contract and
        as set forth in the Company's  invoices to Akro minus the  Manufacturing
        Costs, which Manufacturing Costs shall be calculated as follows:

                7.1.2.1 The costs listed on Appendix I shall remain in force for
                        a  period  of  twelve  (12)  months  from  the  date  of
                        commencement of this Agreement. Thereafter, in the event
                        that the  Manufacturer  is  desirous of  increasing  the
                        amounts  specified in Appendix I, it may only do so upon
                        at least one hundred and eighty (180) days notice to the
                        Company. Any such increase in cost must be based upon an
                        actual  increase  in the  out-of-  pocket  costs  to the
                        Manufacturer  of producing the Goods,  including  actual
                        increases in the out-of-pocket costs to the Manufacturer
                        of only those  items of  overhead  list on  Appendix  IV
                        hereof  and no others,  and any new costs so  determined
                        shall  again  remain  in force  for a period of at least
                        twelve (12) months. The Manufacturer  reserves the right
                        to negotiate  with the Company in good faith to increase
                        its  prices  for  other  legitimate  reasons,  it  being
                        understood  however  that  no  such  increase  shall  be
                        effected  unless it can be passed on to the customers of
                        the  Company,  with a  reasonable  markup,  so that  the
                        Company  participates  in the profits  derived from such
                        increase.

7.2     In the  event  of a  dispute  concerning  the  justification  of a price
        increase  the  matter  shall be  submitted  to  arbitration  by a single
        arbitrator  who is a partner in a major  international  accounting  firm
        which has an office in Montreal  and to be selected by  agreement of the
        parties, and failing such agreement by a Judge of the Superior Court for
        the District of Montreal.

7.3     The Company  shall provide to the  Manufacturer  a copy of each purchase
        order which the Company receives from its customers  ("Customer Purchase
        Order"),  and upon which  each  purchase  order from the  Company to the
        Manufacturer


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        ("IM(2) Purchase  Order") is based.  The Manufacturer  shall invoice the
        Company  for the price of the Goods  calculated  in the manner set forth
        above in  Section  7.1.  In  calculating  the  Profits  portion  of such
        purchase price foreign currency  received by the Company shall be valued
        in Canadian  dollars  based upon the actual  conversion  of such dollars
        made by the Company at its bank in Montreal at the time that the Company
        receives payment of such foreign  currency,  or if no such conversion is
        made by the Company,  at the value which the Company would have received
        if such funds had been  converted  to Canadian  dollars on the date that
        the Company received payment. The terms of payment of the IM(2) Purchase
        Order shall be one percent  (1%),(ten  [10] days net),  forty-five  (45)
        days from delivery to customers warehouse.

7.4     Losses  resulting  from bad debts  shall be  absorbed by the Company and
        shall not be taken into account in the calculation of profits.

ARTICLE 8 DELIVERY

8.1     All Goods shall be  delivered by the  Manufacturer  in  accordance  with
        whatever  delivery schedule has been mutually agreed upon by the parties
        in  writing  unless  caused  by  default  of the  Company  to  meet  its
        obligations  under  Section 3.5  hereof,  if the  Manufacturer  fails to
        deliver the Goods in accordance  with the delivery  schedule the Company
        shall be entitled to:

        8.1.1   partially  cancel the applicable  order as to the affected Goods
                and require Manufacturer to deliver all available Goods; or

        8.1.2   cancel the applicable order for default; or

        8.1.3   maintain the applicable order,  accept late delivery and recover
                amounts  paid by the  Company  in  connection  with  the  failed
                transaction as a direct consequence of such failure.

ARTICLE 9 ORDERS

9.1     Subject to the terms and conditions  hereof,  Manufacturer  shall accept
        any order for Goods from the  Company or other  party  which,  by mutual
        agreement of the parties hereto,  is entitled to order Goods  hereunder.
        Any terms and conditions in any such orders that are  inconsistent  with
        or in addition to the terms and  conditions  hereof shall not be binding
        upon Manufacturer unless Manufacturer expressly accepts them in writing.
        Manufacturer  is not  authorized  to ship any Goods  unless and until an
        order has been issued  therefor.  Subject to the terms and conditions of
        Section 7.1.2.1 above, any preparation or work performed by Manufacturer
        prior to receipt of an order shall be at Manufacturer's expense.

ARTICLE 10 PACKING, MARKING AND CUSTOM INVOICES


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10.1    The  packaging  for the Goods shall  conspicuously  state that the Goods
        have been designed by the Company and they shall bear such trademarks as
        are  designated  by the  Company  in a manner,  style,  size and  colour
        determined  and  specified by the Company in writing.  Any and all other
        notations or markings of any kind shall be subject to the prior  written
        approval  of the  Company  bearing  in mind the  provisions  of the Akro
        Contract.  Subject  to the  foregoing,  the  Manufacturer  shall  not be
        identified in any respect on the Goods,  or on any  packaging  materials
        associated therewith. All shipments shall be suitably packed, marked and
        shipped  in  accordance  with  all  requirements   stated  herein,   all
        applicable laws, regulations,  codes and other governmental requirements
        and all  requirements  of the applicable  carrier.  A separate  delivery
        sheet  on  each  local  shipment  is  required,  regardless  of  whether
        deliveries of two or more  shipments are made at the same time.  Packing
        slips must  accompany  each  shipment  and  Manufacturer  shall  provide
        duplicate  invoices  for  each  shipment.   Subject  to  the  terms  and
        conditions of Section  7.1.2.1  Manufacturer  shall bear the cost of all
        boxing,  packing and crating.  Each shipping  container shall be marked,
        and each  packing  slip and  invoice  shall be  written  in the  English
        language,  all in accordance  with the Company's  written  instructions.
        Prior to any exportation, one copy of the required customs invoice shall
        be enclosed in a waterproof  envelope or wrapper clearly marked "customs
        invoice" and securely attached to the outside of the shipping  container
        except  as   specifically   authorized   by  the   Company  in  writing,
        Manufacturer  shall not make any use of any trade names,  trademarks  or
        any other proprietary information materials or rights of the Company.

ARTICLE 11 INSPECTION

11.1    The Company  shall be allowed (but not  obligated)  to inspect the Goods
        and reject any portion  thereof that fails to conform to this Agreement.
        As  reasonably  requested  by the  Company,  the  Company  shall also be
        entitled (but not  obligated) to visit  Manufacturer's  premises  during
        ordinary business hours to conduct  inspections of the Goods and observe
        Manufacturer's  testing of the Goods. The parties  acknowledge and agree
        that any  inspection of the Goods by the Company is not likely to result
        in any determination as to whether the Goods conform to the requirements
        of this  Agreement  (i.e.  that  they are  consistent  with the  samples
        provided to the Company).  The Company shall have all remedies  provided
        by applicable law in connection with any nonconforming Goods.

ARTICLE 12 WARRANTY

12.1    Manufacturer  warrants that the Goods as delivered  shall conform to all
        samples  supplied  by  Manufacturer,  will not  degrade in any  material
        respect,  and will be merchantable  and fit for their intended  purposes
        and comply with all applicable  laws,  regulations  and  standards.  The
        warranties  shall  remain in effect as provided in Exhibit F of the Akro
        Contract.  There are no other  warranties  of any kind not  specified or
        referenced herein or in separate written agreement of the parties.


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12.2    In the event any of the Goods  fail at any time  during  the  applicable
        warranty period to meet the foregoing requirements,  the Company may, at
        its option:

        12.2.1  require Manufacturer at its own expense to make such adjustments
                or  replacements  as may be  necessary  to meet  the  reasonable
                requirements of the Company's customer;

        12.2.2  elect to accept or retain any such Goods, subject to appropriate
                adjustment to the purchase price of the goods;

        12.2.3  pursue any other remedy provided by applicable law.

        In any event,  Manufacturer shall promptly reimburse the Company for any
        and all direct  loss,  damage and  expenses  incurred as a result of the
        delivery and\or use of such nonconforming Goods.

ARTICLE 13 TRADE MARKS AND DESIGNS

13.1    All trade marks and designs  used by the Company in the  description  of
        the Goods shall remain the property of the Company or its  distributors,
        other than the mark  "Rutex"  which is and shall  remain the property of
        the Manufacturer.

ARTICLE 14 CONFIDENTIALITY

14.1    Each of the parties hereto agree to keep all of the terms of the present
        Agreement confidential unless it is exempted from so doing in writing by
        the other party  except to the extent  required  by the U.S.  Securities
        laws,  Manufacturer  shall not  advertise or publicize the fact that the
        Company is using  Manufacturer's  services,  or has  contracted  for the
        purchase of the Goods from  Manufacturer  without  first  obtaining  the
        Company's  consent,  which  shall  not  be  unreasonably  withheld.  Any
        know-how,  information  or materials  which either party has  heretofore
        disclosed  or  hereafter  discloses  to the other  shall at all times be
        deemed  the  confidential  and  proprietary  information  of  the  party
        disclosing  such  matter  and  shall be kept  confidential  by the other
        party,  and shall not be used or  disclosed  by the other  party for any
        purpose  other than the  performance  of such other  party's  obligation
        pursuant to this Agreement.  Confidential  and  proprietary  information
        shall not be deemed to include know-how,  information or materials which
        are generally available to the public at the time of disclosure.

ARTICLE 15 TOOLING

15.1    At all times full and complete  ownership rights relative to the tooling
        referenced  or  described  in Exhibit "B" (the  "Tooling"),  shall be in
        accordance with the provisions of the Akro Contract. No ownership rights
        are  conferred  upon  Manufacturer  by virtue of this  Agreement  or the
        arrangements  referred to herein.  Manufacturer  shall not  encumber the
        Company's property in any way or subject


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        the same to any claim,  levy,  attachment,  lien or other  proceeding or
        process  affecting,  limiting or  challenging  in any way the  Company's
        ownership  rights  except in the event of  non-payment  of the Company's
        obligations towards the Manufacturer.

15.2    Manufacturer  agrees  that it shall not use the  Tooling for any purpose
        other than those directly  relating to the manufacture and supply of the
        Goods for the Company, without the prior written consent of the Company.

15.3    Subject  to the  terms  and  conditions  of  Section  15.1  above,  upon
        termination  of  this   Agreement,   including  the  expiration  of  any
        applicable  notice period,  Manufacturer  shall allow the Company or its
        authorized  contractor  full  access to  Manufacturer's  facilities  for
        purpose of disassembling and removing the Tooling.

ARTICLE 16 TERMINATION

16.1    Either party may terminate this Agreement at any time for cause provided
        that the  terminating  party  notifies  the other party of the cause and
        gives such party sixty (60) days in which to effect a cure. If such cure
        is not reasonably  acceptable to the terminating  party, or if such cure
        is not effected within the  aforementioned  sixty (60) day period,  then
        the termination shall be effective immediately following such sixty (60)
        day period.  Termination  for cause shall  include but not be limited to
        the following causes:

        16.1.1  any material  breach of this  Agreement  by the  non-terminating
                party; or

        16.1.2  the  filing of a  bankruptcy  petition  by or  against  the non-
                terminating   party,   the  appointment  or  application  for  a
                receiver,  examiner  or  custodian  with  respect  to  the  non-
                terminating party's assets and liabilities,  or the making of an
                assignment  for the  benefit  of  creditors  or other  agreement
                relating to the liquidation of all or  substantially  all of the
                non- terminating party's assets; or

        16.1.3  the  making  of  any  material  misrepresentation  by  the  non-
                terminating party to the other party; or

        16.1.4  the persistent and  unjustified  failure of the  Manufacturer to
                deliver  Goods in  accordance  with  any  agreed  upon  delivery
                schedule;

        16.1.5  the  parties  failing  to  agree  on  price,  after  good  faith
                negotiations,  of all styles within the product line  comprising
                the Goods;


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16.2    In addition, the Company,  subject to the provisions of Section 3.5, may
        terminate any order or any part of any order in the event that:

        16.2.1  the Goods  comprised  therein are  defective or otherwise do not
                conform to this Agreement; or

        16.2.2  Manufacturer  fails to deliver any Goods in accordance  with any
                agreed upon delivery schedule.

        Further,  the Company may terminate its distribution of any style in the
        product  line on thirty (30) days prior  notice to  Manufacturer  if the
        Company   reasonably   determines  that  its  profits  margin  or  sales
        applicable to such styles in the product line are not adequate. Any such
        termination  of a  style  by the  Company  shall  not  give  rise to any
        remedies  for the  Manufacturer  or  otherwise  affect any rights of the
        parties under this Agreement.

ARTICLE 17 PRODUCT WARNINGS

17.1    Manufacturer  agrees to supply the Company  with  written  MSDS date and
        applicable product warnings applicable to the Goods, including,  but not
        limited to use instructions, guidelines and restrictions.

ARTICLE 18 TECHNICAL ADVICE

18.1    Technical  advice  furnished  by  either  party in  connection  with the
        obligations of the other party shall be based upon information  believed
        to be  reliable,  but  neither  party  shall  assume any  obligation  or
        liability for such advice or the results  obtained by the other party in
        reliance thereon.

ARTICLE 19 INDEMNIFICATION

19.1    Manufacturer  hereby  agrees to defend,  indemnify and hold harmless the
        Company,  its  successors  and  assigns,  from and  against  any and all
        losses, liabilities,  claims, actions, judgments,  damages and expenses,
        including, without limitation, reasonable attorneys' fees arising out of
        or in connection with:

        19.1.1  the manufacture or use of the Goods, including,  but not limited
                to any defective condition of the Goods;

        19.1.2  any breach of this Agreement by Manufacturer; or

        19.1.3  any act or omission by  Manufacturer,  its employees,  agents or
                contractors.

19.2    The  Company  hereby  agrees  to  defend,  indemnify  and hold  harmless
        Manufacturer,  its  successors  and assigns from and against any and all
        losses,


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        liabilities,   claims,   actions,   judgments,   damages  and  expenses,
        including, without limitation, reasonable attorneys' fees arising out of
        or in connection with:

        19.2.1  the  Company's  failure  to meet  its  obligations  towards  its
                customers in connection with any breach of this Agreement by the
                Company; or

        19.2.2  any act or omission by the  Company,  its  employees,  agents or
                contractors; or

        19.2.3  claims of design or patent infringement on molds or tooling.

ARTICLE 20 REMEDIES

20.1    In the event of any failure of performance hereunder, the non-defaulting
        party shall have all rights and remedies contained herein, together with
        any and all rights and remedies provided at law and/or in equity.

ARTICLE 21 NOTICE

21.1    Except as otherwise  expressly set forth in this Agreement,  all notices
        required  to be given or  delivered  hereunder  shall be in writing  and
        shall be deemed to have been  given  when  delivered  personally,  or by
        documented   courier  delivery  service,   or  sent  by  facsimile  with
        confirmation  of receipt by the addressee.  Notices shall be sent to the
        addresses  listed below,  unless and to the extent that other  addresses
        are given by the parties in conformance herewith:

                If to Manufacturer:

                     The Tirex Corporation Canada Inc.
                     740 St. Maurice Street
                     Suite 201
                     Montreal, Quebec H3C 1L5
                     Attn: Mr. Terry Byrne
                     Fax:   (514) 878-9847

                If to The Company:

                     IM(2) Merchandising & Manufacturing Inc.
                     60 Morgan Road
                     BAIE D'URFE QC H9X 3A4
                     Attn: Mr. David Sinclair
                     Fax: (514) 426-1507

ARTICLE 22 LANGUAGE

22.1    The  parties  agree that this  Agreement  may be  translated  into other
        languages  for ease of  administration,  but that as between the parties
        hereto the English version


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        of this Agreement shall for all intents and purposes be controlling. Les
        parties conviennent et acceptent que le present contrat soit redige dans
        la langue anglaise et acceptent  qu'il soit traduit en d'autres  langues
        pour des fins d'administration. Toutefois, entre les parties, la version
        anglaise du present contrat doit dans tous les cas avoir preseance.

ARTICLE 23 INSURANCE

23.1    At all  times  during  the term of this  agreement,  Manufacturer  shall
        maintain  in full  force and  effect,  at  Manufacturer's  sole cost and
        expense,  comprehensive public liability insurance coverage and products
        liability  insurance coverage against claims for personal injury,  death
        or  property  damage  in  limits  of not  less  than  $3,000,000.00  per
        occurrence  for  bodily  injury  and not  less  than  $1,000,000.00  per
        occurrence  for property  damage,  or such other  minimum  limits as the
        Company shall  reasonably  request in writing.  All  insurance  shall be
        obtained  from  companies  licensed  to do  business  in  the  Territory
        reasonably  acceptable  to the Company.  All  insurance  policies  shall
        require sixty (60) days prior notice to the Company of  cancellation  or
        other material change in coverage. All insurance policies shall name the
        Company as an additional  insured and Manufacturer  shall provide to the
        Company a  certificate  of insurance  coverage  issued by an  applicable
        insurance carriers upon request.

ARTICLE 24 RELATIONSHIP OF PARTIES

24.1    The  parties   acknowledge   and  agree  that  they  are   independently
        contracting   parties  and  that  no  joint   venture,   partnership  or
        incorporated  association  is  established  hereby.  Except as otherwise
        expressly  stated  herein,  any costs,  liabilities  and/or  obligations
        incurred  by a party  in  connection  with  the  manufacture,  sale  and
        purchase of the Goods shall be borne solely by such party. Neither party
        is the agent of the other party and neither  party shall take any action
        on behalf of the other party in any agency capacity.

ARTICLE 25 COUNTERPARTS

25.1    This Agreement may be executed in one or more  counterparts,  any one of
        which need not contain  the  signature  of more than one party,  but all
        counterparts taken together shall constitute one and the same Agreement.

ARTICLE 26 SEVERABILITY WAIVER

26.1    Whenever  possible each provision of this Agreement shall be interpreted
        in such a manner as to be effective and valid under  applicable  law. If
        any  provision  of this  Agreement is held to be  prohibited  or invalid
        under  applicable  law  by  a  court  of  competent  jurisdiction,  such
        provision shall be ineffective only to the extent of such prohibition or
        invalidity,  without invalidating the remainder of such provision or the
        remaining provisions of this Agreement. No delay by either party in


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        exercising any right or remedy under this  Agreement  shall operate as a
        waiver  thereof nor will any single or partial  exercise of any right or
        remedy preclude any other or further exercise thereof or the exercise of
        any other  right or remedy.  The rights and  remedies  provided  in this
        Agreement  are  cumulative  and not  exclusive of any rights or remedies
        provided by law.

26.2

26.3

26.4

26.5

26.6

26.7

26.8     

ARTICLE 27 SURVIVAL

27.1    The provisions of Section  hereof shall survive any  termination of this
        Agreement.

ARTICLE 28 GOVERNING LAW

28.1    This  Agreement  shall be governed by and  construed  under the internal
        laws of the Province of Quebec  without  giving  effect to principles of
        conflict of laws thereof.

ARTICLE 29 ENTIRE AGREEMENT

29.1    This Agreement shall  constitute the entire agreement of the parties and
        supersedes all prior agreements,  oral or written,  relating to the sale
        and purchase of the Goods on or after the  effective  date  hereof.  The
        parties  agree to be bound by the terms and  conditions  hereof  and all
        specifications  and  documents  referenced  herein or  attached  hereto.
        Except as expressly provided herein, this Agreement may be modified only
        in writing signed by both parties.  Any attempted  acknowledgment  of an
        order containing terms and conditions  inconsistent  with or in addition
        to the terms and  conditions  hereof  shall not be binding  upon  either
        party.  No  waiver  of any of the terms or  conditions  hereby  shall be
        effective unless made in writing signed by both parties.


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IN WITNESS WHEREOF THE PARTIES HERETO HAVE EXECUTED AND DELIVERED THIS AGREEMENT
AS OF THE DATE FIRST ABOVE WRITTEN.

                                             IM(2) MERCHANDISING &
                                             MANUFACTURING INC.

                                             By/s/ David Sinclair
                                               ---------------------------------
                                             Title President

                                             THE TIREX CORPORATION CANADA INC.

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


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