EXHIBIT 10 (tt)


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                              THE TIREX CORPORATION

                                   ----------

                                   TRUCK TIRE
                     EQUIPMENT LEASE AND PURCHASE AGREEMENT

                                   ----------

      Truck  Tire  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 TCTS-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.


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      1.7  "Projected  Maintenance  Agreement"  shall mean the agreement for the
maintenance of the TCTS-1 System,  which the  Manufacturer and the Operator will
prepare on

      mutually agreeable terms.

      1.8  "Proprietary  Equipment" shall mean the  constituent,  integral,  and
inseparable parts of the TCTS-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 "TCTS-1 System" shall mean the Manufacturer's  proprietary  cryogenic
truck  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 truck tires with an
inside diameter not exceeding  twenty-four (24) 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 TCTS-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 TCTS-1  System,
during which Test Period, the TCTS-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 TCTS-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 TCTS-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 TCTS-1 System.


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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  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.


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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.

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  TCTS-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


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            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  TCTS-1  System is  located  and remove the
            entire   TCTS-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 TCTS-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  TCTS-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:

      (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 TCTS-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 TCTS-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 TCTS-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  TCTS-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 TCTS-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 TCTS-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 TCTS-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 TCTS-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 TCTS-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 TCTS-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 TCTS-1 System shall be placed in suitably  protected  containers
the nature of which shall be determined by mutual agreement of the parties.  The
TCTS-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  TCTS-1  System  from  the
Manufacturer's plant in Montreal to the Site.

      7.1.3  In the  event  that  delivery  of the  TCTS-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 TCTS-1
System at the Site.

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

8.2 Test Period

      8.2.1  Immediately  upon  giving  notice to the  Operator  that the TCTS-1
System is available for testing  operations,  the Manufacturer shall, at its own
expense,  furnish an engineer  (technician?)  to supervise  the operation of the
TCTS-1 for a period of three days (the "Test  Period").  During the Test Period,
the TCTS-1 System shall demonstrate the capability of disintegrating scrap truck
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 TCTS-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 TCTS-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
TCTS-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 TCTS-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  TCTS-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 TCTS-1  into full
working condition shall be borne by the Manufacture unless the


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failure to operate in 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 TCTS-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 TCTS-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 TCTS-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  TCTS-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 TCTS-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


                                                                             376
<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  TCTS-1  in
accordance  with  standards  and  procedures  to be specified  in the  Projected
Maintenance  Agreement or otherwise,  the Manufacturer  warrants that the TCTS-1
will  be  capable  of  disintegrating  scrap  truck  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  TCTS-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 TCTS-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.


                                                                             377
<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 TCTS-1  System,  or any part of it, by any person who used,
operated,


                                                                             378
<PAGE>

or came into contact with such TCTS-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 TCTS-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 TCTS-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 TCTS-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.


                                                                             379
<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 TCTS-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 TCTS-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 TCTS-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.


                                                                             380
<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  TCTS-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 TCTS-1
                  within 90 days of the anticipated Deliver Date.

(a)

      (b)   The  Manufacturer  fails to deliver the TCTS-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  TCTS-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 TCTS-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:


                                                                             381
<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 TCTS-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
            TCTS-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


                                                                             382
<PAGE>

expense,  remove the TCTS-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  TCTS-1  System,  and  the
Manufacturer  may  enter  upon the  premises  where  the said  TCTS-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
TCTS-1  System is  located,  remove the Leased  Equipment  from the said  TCTS-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.


                                                                             383
<PAGE>

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

      12.4.6 In the event of any default by the Operator prior to the Acceptance
Date, the Manufacturer shall be entitled to 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 TCTS-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 TCTS-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 TCTS-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  TCTS-1  System,  satisfactory  to the
Manufacture,  the  Manufacturer  shall use its best  efforts  to  dispose of the
equipment,  either as a single  TCTS-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 TCTS-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.


                                                                             384
<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
TCTS-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
TCTS-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 TCTS-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 TCTS-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.


                                                                             385
<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.


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<PAGE>

18. ARBITRATION

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

19. BINDING EFFECT.

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

      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.


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<PAGE>

20.4 Headings

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

20.5 Governing Law

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

20.6 Entire Agreement

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

20.7 Severability

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

20.8 Publicity

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


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<PAGE>

      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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