EXHIBIT 10 (ss)


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                              THE TIREX CORPORATION

                                   ----------

                                  PASSENGER CAR
                     EQUIPMENT LEASE AND PURCHASE AGREEMENT

                                   ----------

      Passenger Car Equipment Lease and Purchase Agreement, made this 9th day of
October 1998, among

                     ENERCON America Distribution Limited
                     540 Tansy Lane
                     Westerville, Ohio 43081

                                                 (the "Operator")

                                                 and

                     The Tirex Corporation
                     740 St. Maurice, Suite 201
                     Montreal, Quebec H3C 1L5

                                                 (the "Manufacturer")

1.    DEFINITIONS

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

      1.2  Delivery  Date  shall  mean May 30,  1999 or such  other  date as the
parties hereto shall mutually agree.

      1.3  "Leased  Equipment  shall mean  Items 010 and 011 of the  Proprietary
Equipment, as set forth on Schedule 1.8 hereto.

      1.4 "Manufacturer" shall mean The Tirex Corporation 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, The Tirex
Corporation, jointly and severally.

      1.5 "Nonproprietary  Equipment" shall mean the constituent,  integral, and
inseparable parts of the TCS-1 System specified in Schedule 1.5 hereto.

      1.6 "Operator"  shall mean ENERCON  America  Distribution  Limited and all
other  corporations,  partnerships,  or  other  entities,  now or in the  future
controlled  by, under common  control  with, or in control of,  ENERCON  America
Distribution Limited, jointly and severally.

      1.7  "Projected  Maintenance  Agreement"  shall mean the agreement for the
maintenance of the TCS-1 System,  which the  Manufacturer  and the Operator will
prepare on mutually agreeable terms.


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      1.8  "Proprietary  Equipment" shall mean the  constituent,  integral,  and
inseparable parts of the TCS-1 System specified in Schedule 1.8 hereto.

      1.9  "Purchased  Equipment  shall  mean  Items  001  through  009  of  the
Proprietary   Equipment,   as  specified   on  Schedule  1.8  hereto,   and  the
Nonproprietary Equipment, as specified on Schedule 1.5 hereto.

      1.10 "Site" shall mean the premises of Carbon Black  Technologies,  Ltd in
Johnstown, Pennsylvania or such other site as the Operator shall specify.

      1.11 "TCS-1 System" shall mean the  Manufacturer's  proprietary  cryogenic
passenger  car tire  disintegration  system,  consisting  of:  (i) the  patented
"Leased Equipment" and the (ii) "Purchased  Equipment" which includes but is not
limited to a front-end tire preparation  system and a freezing chamber which the
Manufacturer  believes  are  proprietary  to it and for which  the  Manufacturer
intends to apply for patents.  This System will accept whole passenger car tires
with an inside diameter not exceeding seventeen (17) inches and will process the
tire in such a manner as to allow the  System  to  separate  the steel and fiber
from the rubber which will be reduced to a size no larger than 5 mesh. The TCS-1
System shall meet or exceed all applicable  U.S.  permitting and operating rules
and regulations including but not limited to those promulgated by OSHA and EPA.

      1.12 "Test  Period"  shall mean a three day period  which  shall  commence
within ten 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 24
hours per day.

2.    RECITALS

Whereas:

      2.1  The  Manufacturer  has  invented,  designed,  developed,  built,  and
patented part of, 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: (i) purchasing the Nonproprietary  Equipment
and  Items  001  -  009  of  the  Proprietary  Equipment  (referred  to  herein,
collectively,  as the "Purchased Equipment");  (ii) leasing Items 010 and 011 of
the  Proprietary  Equipment  (referred to herein,  collectively,  as the "Leased
Equipment"); and (iii) operating the TCS-1 System.

3.    AGREEMENT FOR PURCHASE AND SALE OF THE PURCHASED EQUIPMENT

3.1   Purchase and Sale

      The Operator agrees to purchase,  and the Manufacturer agrees to sell, the
Purchased  Equipment,  as defined in Section 1.7,  above, in accordance with the
terms and conditions of this


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Agreement.  The  Operator  may at  its  election  take  title  to the  Purchased
Equipment in a wholly owned  subsidiary  corporation to be formed by it for such
purpose.  Such  election by the  Operator  shall  nowise  modify,  diminish,  or
otherwise effect 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 herein after provided.

3.2   Purchase Price

      The purchase price for the Purchased  Equipment  (the  "Purchase  Price"),
installed and set in operation pursuant to Section 7 hereto, shall be the sum of
two million,  two hundred fifty thousand United States dollars (US  $2,250,000),
FOB Montreal.

3.3   Payment Terms

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

(a)   15%   (US $337,500)       upon execution of this Agreement;

(b)   15%   (US $337,500)       upon  acceptance  by the  Operator of  equipment
                                drawings,  layout  drawings,  and other  written
                                specifications, such acceptance to be based upon
                                local   permitting  and   applicable   operating
                                requirements   and  shall  not  be  unreasonably
                                withheld

(c)   30%   (US $675,000)       two months after Manufacturer's giving notice of
                                commencement of manufacture.

(d)   10%   (US $225,000)       two  months  prior to the  anticipated  Delivery
                                Date.

(e)   15%   (US $337,500)       on the Delivery Date; and

(f)   15%   (US $337,500)       on the Acceptance Date.

3.4   Taxes

      Manufacturer and Operator acknowledge that there are a variety of country,
state and/or local taxes that may be assessed on the  Purchased  Equipment,  the
Leased  Equipment,   and  the  purchase,   sale,  and  operation  thereof.   The
Manufacturer  shall  be  responsible  for  the  prompt  payment  of  all  taxes,
assessments,  levies, export taxes, or other governmental or regulatory payments
that may be assessed by the  government of Canada or any political  sub-division
therein.  The Operator shall be responsible for the prompt payment of all taxes,
assessments,  levies, import taxes, or other governmental or regulatory payments
that shall be assessed by the  government of the United States of America or any
political sub-division therein.


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4.    AGREEMENT FOR OPERATING LEASE

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  Equipment,  consisting of
Items 010 and 011  specified  on Schedule 1.8 hereto,  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 under which the Operator  shall
            replace the Leased Equipment or the entire TCS-1 System, as the case
            may be, with new equipment,  free of any installation charge payable
            by the Operator;

      (b)   Continue to use the same equipment  installed  hereunder and thereby
            extend the term of this Lease at a reduced  rental rate of US $6,250
            per month for a period of one year with further successive automatic
            one-year   extensions  subject  only  to  the  Operator's  right  to
            terminate  this  Lease at the end of any  extension  year upon prior
            written notice of not less than 90 days; or

      (c)   Request that the Manufacturer exercise its right of first refusal to
            repurchase the Purchased  Equipment pursuant to Section 13.2 of this
            Agreement,  in which  event the  Manufacturer  shall have sixty (60)
            days following the Manufacturer's  receipt of such notice to either:
            (i) notify the Operator of its intent to  repurchase  the  Purchased
            Equipment  and,  within ninety (90) 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, as soon as  practicable  thereafter,  enter upon the
            premises where the TCS-1 System is located,  take  possession of the
            Leased Equipment without previous demand or notice and without legal
            process,  retrieve  the Leased  Equipment  from the TCS-1 System and
            remove the Leased  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  Equipment at the rate of twelve thousand,
five hundred United States  dollars (US $12,500) per month,  payable in advance,
as follows:


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      (a)   30 days prior to the Delivery  Date: (i) the first month's rent and;
            (ii) as a security deposit, the last two months rent.

      (b)   One calendar month following the Delivery Date: the Rent Payment for
            the period (the "Partial-Month Period") which commences one calendar
            month  following  the Delivery  Date 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.


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EXAMPLE:  If the Delivery Date is September 15, 1998:

================================================================================
Referenced Terms         Period Covered        Date Payment Due      Amount of
                                                                      Payment
--------------------------------------------------------------------------------
"First Month"          September 15, 1998      August 17, 1998       US $12,500
                            through
                        October 14, 1998
--------------------------------------------------------------------------------
"Security               Last two monthly       August 17, 1998       US $25,000
 Deposit"                rent payments
                       payable under lease
--------------------------------------------------------------------------------
"Partial Month          October 15, 1998       October 15, 1998      US $ 6,250
 Period                     through
                        October 31, 1998
--------------------------------------------------------------------------------
"First Regular          November 1, 1998       November 1, 1998      US $12,500
 Monthly Rental             through
 Payment"               November 30, 1998
================================================================================

      4.3.2 In the  event of that  payment  of any Rent  Payment  is made by the
Operator  more than five days after the date when such  payment  shall have been
due,  the  Operator  shall pay a late charge of one  percent  (1%) 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 Equipment

      5.2.1  The  Leased  Equipment  shall  at all  times  remain  the  sole and
exclusive  property of the  Manufacturer  (which reserves the right to assign or
encumber the Leased  Equipment  subject to the rights of the Operator  under the
Operating Lease contained in Section 4 of this Agreement) and the Operator shall
have no right,  title, or interest to the Leased Equipment but only the right to
use  such  Equipment  under  this  Lease.  The  Leased  Equipment  shall  not be
transferred or sublet by the Operator to any other person,  firm or corporation,
the Operator shall not permit any other


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person, firm, or corporation to use the Leased Equipment, and the said operating
lease  contained  herein may not be assigned by the  Operator  without the prior
written consent of the  Manufacturer.  In the event that the Manufacturer  shall
assign or  encumber  the Leased  Equipment,  it shall give the  Operator  prompt
written notice of such assignment or encumbrance.

      5.2.2  The  Leased  Equipment  shall  remain  personal   property  of  the
Manufacturer 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  Equipment  in a manner  which  will not  lessen the
utility of the Leased Equipment;

      5.2.4 The Operator  shall not enter into,  remove,  tamper with, or breach
the security of, the Leased 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
Equipment,  or of any part  thereof.  The  Operator  shall not permit any Leased
Equipment  to be abused,  not permit the removal of any plate or markings put on
the Leased  Equipment  by the  Manufacturer,  nor attach  anything  to or remove
anything from the Leased Equipment.

      5.2.5 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 and/or as trained by the Manufacturer pursuant to Section 8.2.3
of this Agreement.

      5.2.6 The  Operator  agrees that,  in  consideration  of the  Manufacturer
entering  into  this  Lease,  it will not move the  TCS-1  System  from the Site
without the prior written consent of the Manufacturer.

6.    SITE PREPARATION

6.1   Site Plan Specifications

      6.1.1 Within 45 days of the execution of this Agreement,  the Manufacturer
will  furnish  to  the  Operator  "Site  Plan  Specifications"   respecting  the
electrical,  ventilation, water supply, equipment drawings, layout drawings, and
disposal, and any other specifications required at the site for the installation
and operation of the TCS-1 System. Delivery of the foregoing specifications will
be made by the  Manufacturer  to the  Operator  at the  Manufacturer's  plant in
Montreal.

      6.1.2 Within 15 days of the delivery of the Site Plans  Specifications  in
accordance  with  Subparagraph  6.1.1,  above,  the  Operator  will  notify  the
Manufacturer of any failure of such Specifications to comply with all applicable
regulations  and  requirements.  Unless  such  notice  of  failure  to comply is
received by the Manufacturer,  the said Site Plans Specifications will be deemed
to have been accepted by the Manufacturer.


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6.2   Preparation of Site

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

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

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

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

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

      (e)   a "front-end loader" capable of moving and depositing the tires onto
            the trommel screen specified in Schedule 1.5 hereto.

6.3   Notice to Inspect

      6.3.1  The  Operator  shall,  not  later  than  one  month  prior  to  the
anticipated  Delivery Date, give written notice to the Manufacturer (the "Notice
to Inspect") that  preparation of the site for the installation and operation of
the TCS-1 has been completed in accordance with the Site Plan Specifications and
request  that  the  Manufacturer  inspect  the  site in  order  to  confirm  its
conformance with the Site Plan Specifications.

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.

      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,  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  postpone  the  Delivery  Date until all such  changes or  additions  are
completed.  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


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accordance with the Manufacturer's instructions and that the Site is in complete
conformance with the Site Plan  Specifications.  The Manufacturer shall have the
right,  within two weeks of its receipt of such Notice to  re-inspect  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  or the
Manufacturer  fails to inspect the Site within a reasonable time in light of the
Manufacturer's commitments to other customers.

7.    DELIVERY AND INSTALLATION

7.1   Delivery

      7.1.1 Unless the  Delivery  Date is  rescheduled  in  accordance  with the
provisions of paragraph 6.4.2 above,  the  Manufacturer  shall deliver the TCS-1
System to the site not later than 30 days after the Manufacturer determines that
the Site is in conformance with the Site Plan  Specifications and that all legal
requirements have been met, in accordance with Section 6.4, above.

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

      7.1.3 In the event that delivery of the TCS-1 System, or any part thereof,
for a period not exceeding thirty (30) days, shall be prevented by causes beyond
the control of the Manufacturer, 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  postponed  for an
additional period equal to the period of delay. 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 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 Purchased Equipment and the Leased Equipment.


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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 the TCS-1 System
is available for testing operations, the Manufacturer shall, at its own expense,
furnish an engineer  (technician?) to supervise the operation of the TCS-1 for a
period of three days (the "Test  Period").  During  the Test  Period,  the TCS-1
System shall  demonstrate  the capability of  disintegrating  scrap tires at the
rate of the equivalent of one million  (1,000,000)  passenger car tires per year
on a twenty-four hour per day, seven-day per week, continuous operating basis.

      8.2.2 All power, fuel, light,  water, oil, or other necessary supplies and
all  personnel  (other  than  the  engineer  or  technician   furnished  by  the
Manufacturer),  authorizations,  permits, real and personal property, contracts,
equipment,  reports,  etc.  necessary for the successful  operation of the TCS-1
System, as set forth on Schedule 8.2.2, 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  Projected  Maintenance
Agreement or otherwise, the Manufacturer shall, during the Test Period, instruct
at least two of the  Operator's  employees in  accordance  with Section 5.2.5 of
this Agreement 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 Paragraph 8.2.1,  above, the Manufacturer's
offer to sell the Purchased  Equipment and to lease the Leased  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 Paragraph 8.2.1,  above, the Manufacturer shall
have  ninety  (90)  days in  which  to cure the  problems  responsible  for such
failure.  Costs of all parts and  labor  required  to bring the TCS- 1 into full
working  condition  shall be borne by the  Manufacture  unless  the  failure  to
operate in


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<PAGE>

accordance with the  specifications  set forth in Paragraph 8.2.1,  above, 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.

      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  days,  in which case the  acceptance  criteria  of
Paragraph 8.3.1 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 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 Purchased  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 Purchased  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

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


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10.2  Corporate Action

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

10.3  Patents

      10.3.1 The  Manufacturer  has  obtained a patent in the United  States and
Canada for the Disintegration  System which constitutes the "Leased  Equipment".
The Manufacturer is 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  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 patent  covering the
Leased  Equipment,  or on any other patent  granted to the  Manufacturer  in the
future on any other  component  or part of the  TCS-1,  the  Manufacturer  shall
prosecute diligently any infringer at the Manufacturer's own expense.

      10.3.4  The  Manufacturer  has  designed,  developed,  and  built  a fully
computerized  front-end  tire  preparation  system and a freezing  chamber.  The
Manufacturer  believes that such equipment is proprietary to it and intends,  as
promptly as practicable,  to file patent applications therefor. The Manufacturer
has no present  knowledge of any information  which would  adversely  affect the
validity  of its  outstanding  patent  or the  issuance  of  additional  patents
pursuant to the above described projected patent applications.  However, nothing
in this Paragraph shall constitute


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<PAGE>

a warranty by the Manufacturer that further patents will granted or that, in the
absence  of a final  court  determination,  any  particular  patent is valid and
enforceable  or that any  patent may not be the  subject of patent  infringement
claims.

10.4  Warranties

      Subject to the failure of the Operator to maintain the TCS-1 in accordance
with  standards  and  procedures  to be specified in the  Projected  Maintenance
Agreement or otherwise, the Manufacturer warrants that the TCS-1 will be capable
of  disintegrating  scrap  tires at the rate of the  equivalent  of one  million
(1,000,000)  passenger car tires per year on a twenty-four  hour,  seven day per
week operating basis. The Manufacturer  further warrants and represents that the
TCS-1 System will meet or exceed all  applicable  U.S.  permitting and operating
rules and regulations including but not limited to those promulgated by OSHA and
the EPA. 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  Paragraph  8.2.1,  above  for one year  after the
Acceptance  Date. No other  representations  or warranties have been made by the
Manufacturer   or  relied  upon  by  the   Operator.   If  any  defects  in  the
Manufacturer's  work or materials are discovered within one year of delivery the
Operator shall give notice within five 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 Status

      ENERCON America  Distribution  Limited is (i) duly organized  corporation,
validly  existing and in good standing under the laws of the State of Ohio; (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.


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<PAGE>

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,
and the  Operator  will,  within  30 days of the  execution  of this  Agreement,
furnish  the  Manufacturer  with  a copy  of the  resolutions  of the  board  of
directors of the  Operator  authorizing  the Operator to purchase the  Purchased
Equipment and lease the Leased Equipment pursuant to the terms and conditions of
this Agreement;

11.5  Insurance

      11.5.1 The Operator, at its own cost and expense,  shall insure the Leased
Equipment  against  burglary,  theft,  fire,  and  vandalism in the amount of US
$1,000,000 and obtain public  liability  insurance with minimum  limits,  as the
parties shall  mutually  agree,  for property  damage in such form and with such
insurance companies as shall be satisfactory to the Manufacturer.  All insurance
policies  shall name both the  Operator  and the  Manufacturer  as insureds  and
copies of the policies  and the  receipts  for the payment of premiums  shall be
furnished to the  Manufacturer.  Each damage policy shall provide for payment of
all losses  directly to the  Manufacturer.  Each liability  policy shall provide
that all losses be paid on behalf of the Operator and the Manufacturer, as their
respective interests appear.

      11.5.2 In the  event  that the  Operator  shall  fail to  comply  with the
provisions  of  Paragraph  ll.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 Equipment and all such insurance  policies shall be held in
the custody of the Manufacturer.

11.6  Indemnification

      The Operator  agrees to indemnify,  protect,  save,  and keep harmless the
Manufacturer,  its agents, employees,  successors,  and assigns from and against
all losses, damages,  injuries,  claims, demands, and expenses,  including legal
expenses , of whatsoever nature arising out of the use, condition (including but
not limited to latent and other defects and whether or not  discoverable by it),
or  operation  of the TCS-1  System,  or any part of it, by any person who used,
operated,


                                                                             353
<PAGE>

or came into  contact  with such TCS-1 System at the Site and to defend any suit
seeking such damages even though the  allegations  of such suit are  groundless,
false, or fraudulent,  provided  however that the Operator agrees to give prompt
notice to the Manufacturer  once the Operator has actual knowledge of any claims
as to which indemnity shall be sought, and shall permit the Manufacturer (at the
Operator's  expense) to assume the  defense of any such claim or any  litigation
resulting  therefrom;  provided  that  counsel for the  Manufacturer,  who shall
conduct  the  defense  of  said  claim  or   litigation,   shall  be  reasonably
satisfactory to the Operator; The Operator shall not, in the defense of any such
claim or litigation, except with the consent of the Manufacturer, consent to the
entry of any judgment or enter into any  settlement  that does not include as an
unconditional term, the giving by the claimant or plaintiff to Manufacturer of a
release from all liability in respect to such claim or litigation.

11.7  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  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.

11.8  Taxes

      The Operator shall pay all taxes,  assessments,  penalties, and fees which
may be levied or assessed on or with  respect to the  installation  of the TCS-1
System and, at all times  during the term of the Lease of the Leased  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.

11.9  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.


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<PAGE>

11.10 Subordination

      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
Equipment.

11.11 Ancillary Agreements

      11.11.1 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, other than to the  Manufacturer  pursuant to
            the Crumb  Rubber  Purchase  Option  Agreement,  by the  Operator of
            rubber  crumb  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 11.11(a) hereto; and

      (b)   The Crumb Rubber Purchase Option  Agreement,  of even date herewith,
            between  the   Operator  and  the   Manufacturer   or  such  person,
            corporation,  firm, partnership, or other entity as the Manufacturer
            shall appoint in its stead,  granting an option to the  Manufacturer
            to  purchase  up to 40% of the crumb  rubber  produced  by the TCS-1
            System,  a copy of which Agreement is attached as Schedule  11.11(b)
            hereto

      11.11.2 It is the  intention  of the parties  that within sixty days after
payment of the first payment due under  Paragraph 3.3, above,  the  Manufacturer
and  the  Operator,  jointly,  shall  commence  the  development  of a  mutually
acceptable Projected Maintenance Agreement and that within five business days of
the completion of the said Projected Maintenance  Agreement,  the Operator will,
in  consideration  of the premises and the mutual  promises and agreements  made
herein, enter into the Projected  Maintenance Agreement with the Manufacturer or
such person, corporation, firm, partnership, or other entity as the Manufacturer
and the Operator  shall jointly  agree to and appoint in its stead,  on mutually
agreed upon terms.  Notwithstanding the foregoing, the failure of the parties to
enter into the Projected  Maintenance  Agreement will not constitute a breach of
this Agreement or otherwise affect the respective  rights and obligations of the
parties hereunder.


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<PAGE>

12.   DEFAULTS

12.1  Default by Manufacturer

      Each of the following events shall be deemed to constitute  breach of this
Agreement and, unless cured within 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 90 days of the anticipated Deliver Date.

(a)

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

      (c)   The TCS-1  System  fails to  operate  for a full  Test (or  re-test)
            Period,  in accordance  with Section 8.2 hereof,  within ninety (90)
            days from the date the TCS-1 System is  completely  installed at 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 90 days, shall constitute a default hereunder
by the Operator:


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<PAGE>

      (a)   The Operator fails to make any payment  required to be made pursuant
            to Sections 3.3 or 4.3 of this  Agreement  or, if the parties  shall
            enter into the Projected Maintenance Agreement, any payment required
            to be made by the Operator under the Projected 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 Section  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;

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

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

      (g)   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.

      (h)   The Operator fails to reasonably, faithfully, and fully maintain the
            TCS-1 in accordance with standards and procedures to be specified in
            the Projected Maintenance Agreement or otherwise,  and fails to cure
            such breach within the time period specified therein with respect to
            such failure.

12.3  Remedies Available to the Operator upon Default by Manufacturer

      If the  Manufacture  shall be in default  pursuant to Paragraphs 12.1 (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 and the Operator shall thereupon be entitled
to  stipulated  damages  in the  agreed  to amount of one  million  dollars  (US
$1,000,000). In such event, the Manufacturer shall, at its own


                                                                             357
<PAGE>

expense,  remove the TCS-1  System as  promptly  as  practicable  following  its
receipt of such  Notice of  Rescission  and all monies  theretofore  paid by the
Operator to the Manufacturer  pursuant to Sections 3.3 and 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 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 any
aspect  of the  tire  recycling  business  which  is in  competition  with  tire
recycling businesses which utilize tire disintegration equipment manufactured by
the Manufacturer,  either directly or indirectly  through or in association with
any other person,  firm,  corporation,  or organization  during the term of this
Agreement.  Notwithstanding the foregoing,  for purposes of this Agreement,  the
parties  agree  that  a tire  recycling  business  utilizing  a  microwave  tire
recycling  system will not be deemed to be in  competition  with tire  recycling
businesses  which  utilize tire  disintegration  equipment  manufactured  by the
Manufacturer

      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  $2,250,000  for the 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 the Leased  Equipment and 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 $2,250,000 for the Purchased Equipment has been made
by the Operator,  the  Manufacturer  shall  immediately  have  possession of the
Leased  Equipment  and the  Manufacturer  may enter upon the premises  where the
TCS-1 System is located,  remove the Leased Equipment from the said TCS-1 System
and take possession of the Leased  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 Equipment


                                                                             358
<PAGE>

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 liquidated damages including but not
limited to retention  of up to one million  dollars (US  $1,000,000)  out of the
monies  paid  by the  Operator  pursuant  to  Paragraph  3.3 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 liquidated  damages  including but not limited to retention of up
to one million  dollars (US  $1,000,000)  out of the monies paid by the Operator
pursuant  to  Paragraph   3.3,  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.

      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.  In the event that the Operator
shall  fail  to  obtain  a buyer  for  the  TCS-1  System,  satisfactory  to the
Manufacture,  the  Manufacturer  shall use its best  efforts  to  dispose of the
equipment,  either as a single  TCS-1  System or as separate  components  in any
appropriate public disposal manner. In the event of a sale of the equipment to a
Buyer located by either the Operator or the Manufacturer, the Manufacturer shall
return to the Operator all funds  received  from such disposal in excess of: (i)
liquidated  damages under  Paragraphs  12.4.6 or 12.4.7,  above,  (b) any monies
owing to  Manufacturer  by Operator under Section 3.3, and any costs incurred by
the Manufacturer for the removal and public disposal of the repossessed TCS-1.

      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.


                                                                             359
<PAGE>

13.   OPERATOR'S SALE OF Purchased Equipment

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

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

13.2  Manufacturer's Right of First Refusal

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

14.   ASSIGNMENT

      The Operator shall not transfer, deliver, sublease, or encumber the Leased
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 Delivery 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 prior or simultaneously with to the Delivery Date.

(ii)  17.3 Financing Arrangements

      The Operator  will deliver to the  Manufacturer  within sixty (60) days of
the execution of this Agreement,  evidence satisfactory to the Manufacturer that
the Operator has  arranged for adequate  financing to meet the payment  schedule
set forth in Section 3.3, above.

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 in
accordance with the Arbitration Rules then obtaining of the American Arbitration
Association.


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<PAGE>

19.   BINDING EFFECT.

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

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

20.   GENERAL

20.1  Further Assurances

      At any time, and from time to time, after the execution of this Agreement,
each party will execute such additional  instruments and take such action as may
be  reasonably  requested by the other party to confirm or perfect  title to any
property transferred hereunder or otherwise to carry out the intent and purposes
of this Agreement.

20.2  Waiver

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

20.3  Brokers

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

20.4  Headings

      The section and  subsection  headings in this  Agreement  are inserted for
convenience  only and shall not affect in any way the meaning or  interpretation
of this Agreement.

20.5  Governing Law

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


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<PAGE>

20.6  Entire Agreement

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

20.7  Severability

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

20.8  Publicity

      All  notices  to third  parties  and all other  publicity  concerning  the
transactions  contemplated  by this  Agreement  shall be  subject  to the  prior
approval of counsel of the Manufacturer and the Operator, provided however, that
any failure of the  Operator or its counsel to approve any such notices or other
publicity shall in no way prevent the Manufacturer from complying fully with its
public  disclosure  obligations  under the rules and  regulations  of the United
States  Securities  and Exchange  Commission or any other  governmental  body or
agency in the United States or in any other applicable jurisdiction.

20.9  Counterparts

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

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

                                  THE TIREX CORPORATION

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

                                  ENERCON AMERICA DISTRIBUTION LIMITED

                                  By/s/ David L. Holmes
                                    --------------------------------------------
                                        David L. Holmes


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