Document:

EMPLOYING COURSE GRAINED (10-28 MESH) WASTE
VULCANIZED RUBBER FOR THE MANUFACTURE OF
HIGH PERFORMANCE DESULPHURIZED AND MODIFIED RUBBER

AGREEMENT ON THE TRANSFER OF TECHNOLOGICAL
ACHIEVEMENT

	Party A: Guangzhou Research Institute
		 for Utilization of Reclaimed
		 Resources

	Party B: Canadian Rebound Rubber Corp.

	Chinese Guangzhou Research Institute for Utilization
of Reclaimed Resourced, legally registered in China, is a
research centre for the renewal and utilization of discarded
and waste resources responsible for, on national, provincial
as well as municipal levels, undertakings respect the renewal
and utilization of discarded waste resources.  This institute,
having achieved excellent results in the technology concerning
the activation and transmutation of rubber powder and synthetic
technology concerning activators and modifiers, has received
numerous national-level innovation and technology awards and
is recognized nationally and internationally for its leading
achievements.

	The Canadian Rebound Rubber Corp. specializes in
environmental protection technology research and development,
"three wastes" multiple-utilization technology, environmental
protection engineering design, construction and other trades.

	Parties A and B, having reached the following
understanding pursuant to friendly consultation conducted in
Guangzhou, make terms and conditions listed below to be jointly
observed.

EXECUTIVE SUMMARY

	Party A, during the implementation period of the
nation's "Seven Five" policy (1985-1990, i.e. China's 7th
Five-Year plan.  Note:  the following "Eight Five", "Nine Five"
refer to , respectively, the 8th and the 9th Five-Year Plan
until the year 2000) conducted research in low-temperature
reclamation of waste vulcanized rubber (80-100 degrees C)
and headed into production, having also during the "Nine Five"
period accepted the undertaking to experimentally manufacture
high performance desulphurized and modified rubber employing
course grained (10-28 mesh) waste vulcanized rubber (breaking
strength not less than 13 Mpa, rate of elongation ranging
between 300-400%).

<PAGE>1

	After nearly two yeas of scientific and technological
task force problem solving, and after having attained
successful results both in the  laboratory and during the
projected transitional production trials at 300 tons per year
capacity level, in order to provide, for future large-scaled
production, stable technological parameters, formulated
technological processes and facilities and as well to provide
for more transitional phased product for practical
applications and tests by tire production factories, it is
now necessary to perfect the existing equipment, instruments
and apparatuses etc. at the transitional test factories for
desulphurized and modified rubber, and increase the
transitional production volume to a capacity of 500 ton per
year.

	Due to insufficient funding for experiment for the
transitional phased experimental undertakings, Party A has
been unable to fulfill its duty to complete the testings
according to schedule.  As a result, Party A intends to, at
1/3 anticipated sale proceed on the future transfer of this
item (appraised by the state to be US $1,200,000) sell to
Party A in advance, so as to be able to secure partial
funding, complete these transitional testings in conjunction
with Party B and attain satisfactory scientific and
technological achievement at an early date.

	Having gained an understanding and especially during
the period from the end of January, 1997 to early February,
through numerous communication, consultations and site
inspections, Party B is aware of the advanced technological
processes involved in the manufacture of desulphurized and
modified rubber utilizing coarse grained (10-28 mesh) waste
vulcanized rubber, and is aware of the product - the
superiority of the quality of desulphurized and modified
rubber is unsurpassed by any renewed rubber of any kind made
by any method in the world today.  This technology may be
considered at present a major breakthrough in the renewal
technology of waste rubber.  Party B is willing to purchase,
in advance, the right to the achievements of this item so as
to assist tin this technology attaining successful testings
at an early date, and for the purpose of applying these results
for its production purposes.

TERMS AND CONDITIONS

ONE, Party A's Responsibilities

1. Party A assisted by Party B , shall strive to attain
achievements of the technology for desulphurized and
modified rubber within 1 to 1 1/2 years.

<PAGE>2

2. Party A shall provide to Party B the entire technology
package of employing course grained (10-28 mesh) waste
vulcanized rubber in the manufacture of desulphurized and
modified rubber (technological processes for desulphurized
and modified rubber, product inspection and assurance
guidelines).

3. Party A shall provide to Party B advanced technical
instructions on the construction of a sesulphurized and
modified rubber factory, technological processes and series
of other advanced technological guidance.

4. Party A is responsible for training of Party B's
desulphurized and modified rubber production technical
staff (Party B's staff are responsible for own
transportation, food and lodging).  Parties A and B
welcomed to exchange technical personnel to visit each
other for joint research and development.

TWO, Party B's Responsibilities

1. Party B, in order to ensure that Party A attain the
desulphurized and modified rubber technological achievements
at an early date and in order that it may itself be able to
utilize the technological results of this item, shall make
advance payment for the technology transfer in the sum of US
$400,000, to be paid in full by three installments.  First
payment, payable before April 13, 1997, the sum of US
$140,000, the second payment, payable before July 13, 1997,
the sum of US $130,000, and the third payment, payable before
October 13, 1997, the balance of US $130,000.

2. Party B only has the right to utilize the achievements
of the desulphurized and modified rubber technology and has
no right to assign to any unit or individual any right to
such technological achievements.

3. No participating member of the technical staff of
Parties A and B of this research project may disclose any
information or particulars respecting the research of this
technology or with regard to progress therein.

4. During construction of the plant and during production
period of desulphurized and modified rubber, Party B, when
requiring Party A to provide technical assistance, shall
pay for all travel, food and lodging costs of such
assisting members of Party A.

THREE

Should any party, during the implementation period,
determine that any of the above terms and conditions
require corrections or amendment, such corrections or
amendment must be approved by Party A and Party B in
advance.

<PAGE>3

FOUR

	Upon this Agreement taking effect after signing
and sealing, both Parties A and B must strictly adhere
to each of the terms and conditions.  Party which
contravenes this Agreement shall compensate the other
for all economic losses.

FIVE

	This Agreement shall be in four copies (four in
Chinese and four in English).  Parties A and B shall
retain two copies in Chinese and two copies in English.

SIX

	The Chinese copy shall prevail as the standard
for this Agreement.

Party A:  Guangzhou Research Institute for Utilization
	  of Reclaimed Resources.

/s/LI XING RU
--------------------		seal
Authorized Signatory

Party B:  Canadian Rebound Rubber Corp.

/s/D.ELROY FIMRITE
--------------------		seal
Authorized Sigantory

/s/MICHAEL PINCH
---------------------		seal
Authorized Sigantory

			 							 						March 12, 1997LETTER OF APPOINTMENT

	Party A:	Guang Zhou Research Institute
			for Utilization of Reclaimed
			Resources

	Party B:	Canadian Rebound Rubber Corp.

	Chinese Guang Zhou Research Institute for Utilization
of Reclaimed Resources, legally registered in China, is a
research centre for the renewal and utilization of discarded
and waste resources responsible for, on national, provincial
as well as municipal levels, undertakings respect the renewal
and utilization of discarded and waste resources.  This
institute, recognized nationally and internationally, has
had outstanding technological achievements in the renewal of
waste vulcanized rubber, has bred leading high tech talents
in this particular field, and commands authority within the
domestic and international academic circles.

	The Canadian Rebound Rubber Corp. specializes in
environmental protection technology research and development,
"three wastes" multiple utilization technology development,
environmental protection engineering design, construction
and scientific and technological information.

	Parties A and B, pursuant to friendly consultation
conducted in Guangzhou in March, 1997, reached and
understanding.  As early as possible, utilizing their
respective technological advantages both parties shall
promote the applications of Party A's technological
achievements in the area outside China, convert the same
into production power, generate wealth for mankind and
in accordance with the same, make the following terms and
conditions to be jointly observed.

	ONE
Party A appoints Party B to promote, in the market
outside China, the applications of its two national
level technological achievements namely, the technology
concerning the activation and transmutation of rubber
powder and rubber renewal technology, and the resulting
economic benefits shall be shared 70% by Party A and 30%
by Party B.

	TWO
Should Party A be able to, with the assistance of Party B,
successfully develop technology "employing coarse grained
(10-28 mesh) waste vulcanized rubber for the manufacture
of desulphurized and modified rubber", then the related
technological achievements shall be assigned to Party B
for promotion in the area outside China and all resulting
economic benefits derived shall be shared 60% by Party A
and 40% by Party B.

	THREE
If, in spite of the assistance of Party B and despite of
its best efforts, Party A is unable to successfully develop
the technology "employing coarse grained (10-28 mesh)
waste vulcanized rubber in the manufacture of desulphurized
and modified rubber", and there is shortage of funding,
Party B shall provide additional financial assistance in
order to secure success.  Division of economic benefits
derived subsequently therefrom shall be separately
determined by further consultation.

	FOUR
During the appointment of Party B by Party A, should
Party A reach new findings with regard to the utilizations
of reclaimed rubber, similarly Party B may proceed in the
area outside China to promote applications thereof and the
resulting economic benefits shall be determined by further
consultation.

	FIVE
All rights and title to the above technologies are the
property of Party A.  Should Party B during its promotion
of Party A's technological achievements in the area outside
China, encounter practical application problems Party A
shall be responsible for providing problem resolutions,
however, travel, food, and lodging expenses of Party A's
technical staff sent abroad shall be the responsibility of
Party B.

	SIX
This agreement shall be in four copies (four in Chinese
and four in English language).  Both parties shall retain
two copies in Chinese and two in English.

	SEVEN
The Chinese copy shall prevail as the standard for this
agreement.

Party A:	Guang Zhou Research Institute for
		Utilization of Reclaimed Resources

/s/LI XING RU
--------------------		seal
Authorized Signatory

Party B:	Canadian Rebound Rubber Corp.

/s/ D. ELROY FIMRITE
--------------------		seal
Authorized Signatory

				March 12, 1997

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