Document:

Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

                                 LEASE AGREEMENT

      THIS AGREEMENT OF LEASE, ( the "Lease") made as of the last date endorsed
hereon ("Effective Date"), by and between NAPPEN & ASSOCIATES, A PENNSYLVANIA
LIMITED PARTNERSHIP, T/A 309 DEVELOPMENT COMPANY ("Lessor")

                                      A N D

      ESW AMERICA, INC., A DELAWARE CORPORATION, DULY REGISTERED TO DO BUSINESS
IN THE COMMONWEALTH OF PENNSYLVANIA ("Lessee").

      Lessee and Lessor, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged and intending to be legally bound hereby, agree as follows:

      1. LEASE AND PREMISES.

            A. Lessor hereby demises and leases to Lessee and Lessee hereby
hires from Lessor that certain premises situate in Montgomery Township,
Montgomery County, Pennsylvania, known and numbered Lot No. 2, Bethlehem Pike
Industrial Center, together with the building ("Building"), as shown on layout
plan marked Exhibit "A", containing approximately 40,220 sq. ft., more or less,
and improvements constructed thereon, such ground, Building and improvements
being hereinafter called the "Premises".

            B. Lessee acknowledges that it has inspected the Premises and leases
the same in the condition existing on the Effective Date. Notwithstanding
anything set forth herein to the contrary, Lessor, at Lessor's sole cost and
expense, shall, prior to the Lease Commencement Date, provide the leasehold
improvements shown on Exhibit "B". ("LR Tenant Improvements")in accordance with
all applicable laws and regulations. Lessor warrants and agree that HVAC system
of the Building has sufficient capacity to heat and cool the building as
represented on Exhibit "C" attached to reasonably established standards.

            C. The Premises shall be occupied and used for office, warehouse and
light manufacturing, in accordance with applicable laws, ordinances and
regulations. Under no circumstances whatsoever may the Premises be used in whole
or in part for personal, family, residential or household purposes.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      2. TERM.

            A. The term of this Lease shall be five (5) years,16 days commencing
December 15th, 2004 ("Lease Commencement Date") and expiring at 11:59 p.m. on
December 31st, 2009, unless extended, renewed or previously terminated, as
hereinafter set forth. For purposes of this Lease the date of expiration of the
latest term, Renewal Term (as hereinafter defined) or Extension Term (as
hereinafter defined) of this Lease shall be termed the "Lease Termination Date".

            B. If Lessee remains in possession of the Premises, (including
failure to restore the same to the condition required hereunder being deemed to
constitute possession of the Premises) after the Lease Termination Date, (a
"Holding Over"), without the prior written consent of Lessor, such Holding Over
shall create a Holding Over tenancy from month to month, commencing on the day
after the Lease Termination Date (the "Holdover Term"), with respect to the
Premises on all of the same terms and conditions as are in effect on the last
day of the preceding term, except that the monthly installment of Minimum Annual
Rent payable during each Holdover Term shall be increased to an amount equal to
three times the monthly installment of Minimum Annual Rent in effect on the last
day of the preceding term (the "Holdover Rent"). Notwithstanding anything set
forth to the contrary, Lessor may cancel the Holdover Term at any time within
such Holding Over tenancy upon five (5) days prior notice to Lessee, but such
cancellation notwithstanding, Holdover Rent shall accrue and shall be payable by
Lessee until such time ("Restoration Date") as Lessee vacates fully the Premises
and restores the same to the condition required hereunder.

            C. Lessor shall not be liable to Lessee in any respect in the event
that Lessor is unable to complete the LR Tenant Improvements by December 15th
2004, provided Lessee shall not be required to pay any installment of Minimum
Annual Rent (as hereinafter defined) or Additional Rent (as hereinafter defined)
until such time as Lessor substantially completes the LR Tenant Improvements
(i.e., the LR Tenant Improvements are completed to the extent, Lessee can use
the Premises for the purposes set forth in Sub-Article 1(C)).

            D. Lessee is hereby granted a license to occupy the Premises for the
period commencing November 1, 2004, and ending December 14th, 2004 at Midnight.
("License Period"). During the License Period, all of the terms and conditions
of this Lease shall be in full force and effect with the exception of Paragraph
3, INFRA., so that no Minimum Annual Rent will be payable during the License
Period, and Paragraph 4, INFRA., so that no Additional Rent will be payable
during the License Period.

      3. MINIMUM ANNUAL RENT.

            The minimum rent for the period commencing December 15th 2004 and
ending December 31st 2004 shall be *** Dollars to be paid at the time of signing
this Lease. The minimum annual rent thereafter, ("Minimum Annual Rent") payable
by Lessee to Lessor shall be *** per year, lawful money of the United States of
America, payable in monthly installments in advance during the balance of the
term of this Lease in sums of *** on the first day of each month, commencing
January 1st, 2005.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      4. ADDITIONAL RENT.

            As Additional Rent ("Additional Rent") hereunder, Lessee shall pay
Lessor the following on or before the date such additional payment shall become
due, but not later than ten (10) days from rendition of a bill therefor (unless
otherwise set forth herein):

            A. All "Taxes" (as hereinafter defined) assessed or imposed upon the
Premises during the term of this Lease and any Extension Term or Renewal Term or
applicable to the Premises during the term of this Lease, including penalties
thereon, as indicated by bills of taxing authorities. The amount due hereunder
on account of such Taxes shall be apportioned for that part of the first and
last calendar years covered by the original term, Renewal Term or Extension Term
hereof as regards county and township real estate taxes and for that part of the
first and last July 1st fiscal years covered by the original term, Renewal Term
or Extension Term hereof regarding school real estate taxes. On or before the
Lease Commencement Date, Lessee shall pay Lessor the pro rated portion of the
township and county taxes on the Premises for the calendar year in which the
Lease Commencement Date occurs and the pro rated portion of school real estate
taxes on the Premises for the July 1st fiscal year in which the Lease
Commencement Date occurs. Lessor shall promptly forward to Lessee all bills
received by Lessor for such Taxes and the amount of such Taxes shall be paid by
Lessee to Lessor at least one (1) month before the expiration of the net payment
period for said Taxes and before penalties are assessed. In the event Lessee
desires to take advantage of any early payment discount, said tax payment shall
be paid by Lessee to Lessor at least one (1) month before the expiration of any
discount period. A bill submitted by Lessor to Lessee shall be conclusive
evidence of the amount of Taxes assessed or levied as well as the items taxed.

            "Taxes" as utilized in this Lease shall mean all taxes, assessments
and charges of whatsoever nature levied upon or with respect to the Premises or
Lessor's ownership interest in the Premises. "Taxes" shall include, without
limitation, all general real property taxes and general and special assessments,
charges, fees, or assessments for transit, housing, police, fire or other
governmental services or purported benefits inuring to the Premises, service
payments in lieu of taxes, and any tax, fee or excise on the act of entering
into and/or maintaining this Lease or any other lease of space on the Premises,
or the use or occupancy of the Premises or any part thereof, or on the rent
payable under any lease or in connection with the business of leasing the
Premises, including, but not limited to, business privilege taxes that have
been, or are now, or hereafter levied or assessed against Lessor by the United
States of America, the Commonwealth of Pennsylvania or any political
subdivision, political corporation, district or other political or public
entity, whether quasi in nature or otherwise, but not including any federal or
state income tax levied solely on Lessor's income generally. "Taxes" does not
include transfer taxes of any nature whatsoever arising from the purchase, sale
or lease of any real property or taxes levied on any other property owned by
Lessor.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            Lessee at all times shall be responsible for and shall pay before
delinquency, all municipal, county, state or federal taxes assessed against any
leasehold interest or any personal property of any kind, owned, installed or
used by Lessee.

            Lessee, at its sole cost and expense, and after having given twenty
(20) days prior written notice to Lessor, may contest by appropriate legal
proceedings, promptly instituted and thereafter conducted in good faith with due
diligence, the amount or validity, in whole or in part of any Taxes; provided,
however, Lessee shall have at the time of giving notice to Lessor,
contemporaneously deposited with Lessor such financial security, by certified
funds or an irrevocable letter of credit, for payment of the contested Taxes,
said amount deposited with Lessor to equal one hundred twenty percent (120%) of
the total contested Taxes, including interest and penalties, or other security
as may reasonably be required by Lessor.

            B. All sums which may become due by reason of the failure of Lessee
to comply with any of the terms, covenants and conditions of this Lease to be
kept and observed by Lessee, and any and all damages and costs and expenses
(including without limitation thereto, reasonable attorney's fees) which Lessor
may suffer or incur by reason of any default of Lessee and any damages to the
Premises caused by any act or omission of Lessee together with interest to the
date of payment at a rate per annum equal to five hundred (500) basis points
above the prime interest rate (Prime + 5%) of First Union National Bank,
Philadelphia, Pennsylvania, or its successor, in effect during the period said
payment is due.

            C. The premiums for insuring the Premises, including alterations,
additions and improvements other than Lessee's fixtures and equipment against
loss or damage by fire, all extended coverage, and rental value insurance
(covering twelve (12) months' rental on a fully gross basis) for the full, fair
and insurable value thereof, exclusive of foundations, excavations, and
pavement, and insuring Lessor against liability for bodily injury (including
death), personal injury and property damage. The premiums shall be pro-rated for
such portion of the term of the Lease that is included within any period in
which an insurance policy is in effect.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            D. Upon the written request of Lessor's mortgagee, Lessee will pay
to Lessor, together with each monthly installment of Minimum Annual Rent, an
amount equal to one-twelfth of the aggregate annual amount of (I) the taxes
referred to in subparagraph A hereof and (ii) the insurance premiums referred to
in subparagraph C hereof, all as estimated by Lessor; such amounts shall be held
in escrow by Lessor or transmitted to any Mortgagee requiring such payments and
applied on account of the taxes and insurance premiums as and when payments
therefor are due. Without limitation of the foregoing, Lessee shall also pay to
Lessor such additional amounts as Lessor's Mortgagee may request from time to
time to provide a sufficient fund, at least thirty (30) days prior to the due
date (or, in the case of any tax which may be paid in installments, the due date
of the next installment thereof) for payment of such taxes and premiums. Any
amounts held in escrow by Lessor pursuant to this paragraph may be deposited in
a non-interest bearing account. Lessor may apply such deposit against any
arrearage by Lessee in the payment of Minimum Annual Rent and/or Additional
Rent. In the event Lessor assigns its interest in this Lease, Lessor shall have
the right to pay the balance of such amounts then in its possession to the
assignee, and Lessor shall thereupon be completely released from any liability
with respect to such amounts.

            E. Lessee shall pay Lessor a management fee of *** per Lease Year,
payable on the Lease Commencement Date and each anniversary thereof during the
term of this Lease and any Extension Term or Renewal Term. Lessor shall provide
Lawn mowing and shrubbery trimming at Lessee's sole cost and expense, as
Additional Rent; providing in no event, however, shall Lessor be liable to
Lessee for damages, including consequential damages, for any loss or damage
sustained by Lessee due to, or alleged to be due to, failure to perform such
work in a timely or proper manner.

            F. In the event Lessee requests any consents or approvals of Lessor
and Lessor is obliged to expend counsel fees and costs by reason thereof, Lessee
will reimburse Lessor for the counsel fees and costs incurred, as Additional
Rent, within ten (10) days of submission of bills therefor.

            G. If Lessee does not pay any installment of Minimum Annual Rent or
any item of Additional Rent on the day when the same shall become due and
payable, and such failure shall continue for a period of ten (10) days, Lessee
shall pay Lessor as Additional Rent a service charge at the rate of One and
One-Half Percent (1-1/2%) per month (or such lesser charge as may be the legal
maximum for a debtor of the same nature and character as Lessee in the
jurisdiction which the Premises is located) on the amount of such installment of
Minimum Annual Rent or item of Additional Rent or all of the same for each month
or a portion of a month that the same shall remain unpaid; provided, however,
that such charge shall in no event be less than *** for any month or a portion
of a month that any installment of Minimum Annual Rent or item of Additional
Rent shall remain unpaid. Such charge shall be in the form of Additional Rent
for the purposes of defraying administrative expenses of Lessor and is not
intended as a penalty against Lessee. The provision of this paragraph shall not
preclude Lessor from exercising its options as set forth in any other sections
of this Lease, or as provided by law.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      5. UTILITIES.

            Lessee shall heat the Premises at its own expense and shall also pay
all charges of utility companies or public authorities for electricity, gas,
telephone, water, steam, sewer service or other services or utilities furnished
to the Premises. Under no circumstances shall Lessor be required to furnish or
be responsible for the furnishing of or the failure of any utility companies or
public authorities to furnish any utilities or any other service of any kind to
the Premises or any part thereof.

      6. REPAIRS.

            A. Except as otherwise set forth herein, Lessee shall be responsible
for all maintenance to the Premises and at Lessee's sole expense, shall make all
necessary or appropriate repairs, replacements, renewals, and additions,
interior and exterior, ordinary and extraordinary, foreseen and unforeseen,
required to keep and maintain the Premises, including the Building and all
Systems therein(as hereinafter defined), equipment and apparatus appurtenant
thereto or used in connection therewith, in good order and condition including,
but not limited to, parking lot and driveway repair, and maintenance, cleaning
and snow and ice removal, but not replacement, in its entirety, of the parking
lot and driveway macadam. Lessor shall be responsible, only, for maintenance to
the roof and Structural (defined as "load bearing elements but not, exterior
walls and window and door jambs and sills) portions of the Building, and
replacement, in its entirety, of the parking lot and driveway macadam, if
un-repairable by Lessee, not arising from the act or neglect of Lessee, its
agents, servants, and business visitors, in accordance with the provisions of
subparagraph B hereof. Pertaining to Lessee's responsibility to maintain the
heating, air-conditioning, plumbing, electrical and sprinkler systems of the
Premises ("Systems"), in addition to all required repairs and replacements,
Lessee agrees that it shall, to the extent generally available, at its cost and
expense, enter into a service contract or contracts with responsible service
companies providing for at least two (2) semi-annual periodic inspections, and
complete maintenance including all necessary parts and labor, commencing upon
the Lease Commencement Date, which contract or contracts shall continue during
the term of this Lease and any Renewal Term or Extension Term thereof and will
be subject to the approval of Lessor, which Lessor agrees not to unreasonably
withhold. A copy of said service contract shall be deposited with Lessor prior
to the Lease Commencement Date and said contract must provide for at least
fifteen (15) days' notice to Lessor prior to cancellation thereof. True and
correct copies of all inspection reports received from the service contractor
shall be furnished to Lessor no later than ten (10) days after receipt of same.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            B. Upon receipt of written notice from Lessee, Lessor agrees to
proceed with due diligence to repair at its own cost and expense, any leaks in
the roof, or make any repairs and replacements to the roof of the Building or
make any repairs to the Structural portions of the Building, and replace, if
un-repairable by Lessee,, the parking lot and driveway macadam, in its entirety,
provided such repairs and replacement are not necessitated by any act or neglect
on the part of Lessee, its agents, servants or business visitors. In no event,
however, shall Lessor be liable to Lessee for damages, including consequential
damages, for any loss or damage sustained by Lessee due to, or alleged to be due
to, failure to make such repairs or replacement in a timely or proper manner. In
the event Lessor fails to make said repairs or replacement within a reasonable
time and in a proper manner, after notice by Lessee, Lessee may proceed to
effect said repairs or replacement and Lessor shall repay Lessee the reasonable
costs of said repairs or replacement, but Lessee may not set off the amount of
such costs against any rent due to Lessor pursuant to the terms of this Lease.
Provided, however, that within ten (10) days of receipt of any such bill for
repairs, Lessor may submit the questions of the reasonableness of said bills
and/or Lessor's responsibility to pay for same to arbitration before the
American Arbitration Association in Philadelphia, Pennsylvania, and in
accordance with the rules and regulations of the American Arbitration
Association in Philadelphia, Pennsylvania. The decision of the arbitrators shall
be final and binding upon the parties and shall be unappealable. The cost of
arbitration shall be borne equally by the parties. Each party shall bear its own
costs.

            C. Any repairs, replacements, renewals and additions, and any labor
performed or materials furnished in, on or about the Premises shall be performed
and furnished by Lessee and/or Lessor, as the case may be, in strict compliance
with all applicable laws, regulations, ordinances and requirements of all duly
constituted municipal authorities or other governmental bodies having
jurisdiction over the Premises and the requirements of any board of underwriters
having jurisdiction thereof.

      7. INSURANCE.

            A. LIABILITY.

                  Lessee shall provide and keep in force at its own cost and
expense:

                  (I) Commercial General Liability Insurance, including Personal
Injury, Bodily Injury Including Death, and Property Damage covering premises
liability, independent contractors liability, and contractual liability, with
minimum limits of coverage of One Million Dollars ($1,000,000.00) per occurrence
and Two Million Dollars ($2,000,000.00) aggregate applicable to the Premises
only.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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                  (ii) Worker's Compensation Insurance in the full statutory
amount.

                  (iii) All policies carried hereunder, providing liability
coverage, will include Lessor as an additional named insured with respect to
ownership of the Premises.

            B. LESSEE'S PERSONAL PROPERTY. Lessee shall keep its personal
property and trade fixtures in the Premises insured with "all risks" insurance
in an amount to cover 100% of the replacement cost of the property and fixtures.

            C. Insurance policies required by this Lease shall:

                  (I) Be issued by insurance companies licensed to do business
in the State of Pennsylvania, with general policyholder's ratings of at least A
and a financial rating of at least XI in the most current Best's Insurance
Reports available on the date of issuance. If the Best's ratings are changed or
discontinued, the parties shall agree to an equivalent method of rating
insurance companies;

                  (ii) Provide that the insurance not be cancelled or materially
changed in scope or amount of coverage unless thirty (30) days advance notice is
given to the Lessor;

                  (iii) Be primary policies -- not contributing with, or in
excess of the coverage that the Lessor may carry;

                  (iv) Be permitted to be carried under a "blanket policy".
However, a specific minimum limit must be listed which is applicable to the
Premises and acceptable to the Lessor.

                  (v) Be maintained during the entire term and any Extension
Term or Renewal Term of this Lease.

            D. By the Lease Commencement Date and prior to Lessee entering
possession of the Premises, and upon each renewal of its insurance policies,
Lessee shall provide certificates of insurance to Lessor by notice hereunder.
The certificates shall specify amounts, types of coverage, the waiver of
subrogation, specified in Paragraph 16 hereof, and the insurance criteria listed
in this paragraph 7. The policies shall be renewed or replaced and maintained by
Lessee. If Lessee fails to give any required certificate within the time
provided herein, Lessor may obtain and pay for that insurance and receive
reimbursement from Lessee as Additional Rent, any other provision of this Lease
notwithstanding.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      8. DESTRUCTION OF PREMISES.

            A. TOTAL DESTRUCTION OF BUILDING. In the event the Building is
totally destroyed or so damaged by fire or other casualty covered by a policy or
policies of insurance maintained by Lessor that the same cannot be repaired and
restored within ninety (90) days from the happening of such injury, the current
term of this Lease shall absolutely cease and terminate and the Minimum Annual
Rent and Additional Rent shall abate for the balance of the term. Nothing
contained herein shall be construed to affect Lessor's right to collect the
proceeds of rental value insurance on the Building.

            B. PARTIAL DESTRUCTION OF BUILDING. If the damage covered by a
policy or policies of insurance maintained by Lessor, be only partial and such
that the Building can be restored to approximately its former condition within
ninety (90) days from the date of the casualty loss, Lessor may, at Lessor's
option, restore the same with reasonable promptness, reserving the right to
enter upon the Premises for that purpose or terminate the current term of this
Lease. Lessor also reserves the right to enter upon the Premises whenever
necessary to repair damage caused by fire or other casualty to the building of
which the Premises is a part if the building is a multi-tenant building, even
though the affect of such entry be to render the Premises or part thereof
untenantable. The rent shall be apportioned and suspended during the term that
any portion of the Premises is untenantable, taking into account the ratio of
the untenantable portion to the total Premises and the duration of such
untenantability. Nothing contained herein shall affect or limit Lessor's right
to collect the proceeds of any rental value insurance on the Premises. If a
dispute arises as to the amount of rent due under this clause, Lessee agrees to
pay the full amount claimed by Lessor, but Lessee shall have the right to
proceed by law to recover the excess payment, if any.

            C. In the event of a total casualty loss of the Building, Lessor
shall, within a reasonable time thereafter, give Lessee notice in writing of
other un-rented space owned by Lessor in proximity to the Premises("Offer
Notice").Within ten (10) days of the date of receipt by Lessee of Lessor's Offer
Notice (" Acceptance Period"), Lessee shall have the first option to lease any
space specified in the Offer Notice by giving notice to Lessor of acceptance of
the Offer Notice and the space accepted ("Substituted Space"). If Lessee accepts
the Offer Notice, by written acceptance received by Lessor on or before the end
of the Acceptance Period, the parties shall execute a Lease Amendment Agreement,
substituting the Substituted Space for the Premises, for the balance of the term
of this Lease, with the same provisions, except that the Minimum Annual Rent
shall be adjusted by the square footage of the Substituted Space multiplied by
the per square foot Minimum Annual Rent applicable to the Premises, hereunder.
Notwithstanding anything set forth herein to the contrary, this right of first
refusal shall terminate absolutely in the event Lessee has not properly
exercised this option by written acceptance received by Lessor on or before the
end of the Acceptance Period.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            D. Lessor shall not be liable for any damage, compensation or claim
by reason of the necessity of repairing any portion of the Premises, the
interruption of the use of the Premises, any inconvenience or annoyance arising
as a result of such repairs or interruption or the termination of this Lease by
reason of damage or destruction of the Premises or any part thereof.

      9. CONDEMNATION.

            A. TOTAL CONDEMNATION. In the event the entire Premises is taken or
condemned by any public or quasi-public authority exercising the right of
eminent domain, the term of this Lease shall terminate as of the date the
condemning authority takes possession of the Premises, with the same force and
effect as though such date were the date fixed herein for expiration of the
term. The entire amount of any award for such taking shall belong to the Lessor,
except for moving, business interruption expenses, and damages to Lessee's
personal property, if any, awarded directly to Lessee and Lessee hereby waives
any other right it may have to any portion of such award.

            B. PARTIAL CONDEMNATION. In the event that a portion of the
Premises, but not the entire Premises is taken or condemned for a public or
quasi-public use, the Minimum Annual Rent herein shall abate equitably in
proportion to the area of the building on the Premises condemned as of the date
on which the condemning authority shall take possession of the condemned
property. Provided, however, that if the condemnation was so extensive that the
Premises is not suitable for Lessee's use as set forth herein, the taking shall
be considered a total taking and subparagraph A above will apply. The entire
amount of any award for such taking shall belong to Lessor except for moving,
business interruption expenses and damages to Lessee's personal property, if
any, awarded directly to Lessee and Lessee hereby waives any other right it may
have to any portion of such award. If the parties are unable to agree as to
whether any taking is so substantial as to constitute a total taking for the
purposes of this Lease, or as to the amount of abatement of rent after a partial
taking, the matter shall be submitted to arbitration in Philadelphia,
Pennsylvania, in accordance with the rules of the American Arbitration
Association then in force and the decision of the arbitrators shall be final and
binding on both parties.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            C. If the condemning authority should take only the right to
possession for a fixed period of time or for the duration of an emergency or
other temporary condition, then, notwithstanding anything hereinabove provided,
this Lease shall continue in full force and effect without any abatement of rent
and the amounts payable by the condemning authority with respect to any period
of time prior to the expiration or sooner termination of this Lease (not
exceeding the Minimum Annual Rent and Additional Rent paid by Lessee to Lessor
during said period of time) shall be paid by Lessor to Lessee out of the amount
of any condemnation award received by Lessor.

      10. USE AND COMPLIANCE WITH REGULATIONS.

            A. Lessee hereby covenants and agrees that it will at no time use
the Premises for any other use or purpose than lawful purposes. Lessee further
agrees that it will at no time use the Premises in any manner which may be
deemed a violation of any municipal (including but not limited to township
authorities, regulatory agencies and water and sewer authorities), state or
federal law, rules, regulations or requirements. Lessee shall comply at its sole
cost and expense with any and all municipal, state and federal rules,
regulations, requirements or laws, including additional installations which may
be required, covering Lessee's specific use and occupancy of the Premises;
Lessor shall comply, at its sole cost and expense with any and all municipal,
state and federal rules, regulations, requirements or laws, and/or additional
installations covering buildings and property generally, without regard to
Lessee's specific use and occupancy thereof. Lessor represents and warrants that
the applicable zoning ordinances permit Lessee's intended use of the Premises as
specified in Paragraph 1(C) hereof. The applicable use and occupancy regulations
of Montgomery Township, Montgomery County, Pennsylvania, require a tenant to be
in possession of its space and set up for operation before making application
for a certificate of occupancy ("CO") and the necessary township inspection.
Accordingly, Lessee shall take possession of the Premises, set up its operation
and promptly thereafter, make application to Code Enforcement Officer of
Montgomery Township for a CO for the Premises and obtain any required CO. Lessee
shall provide Lessor with a true and correct copy of its CO promptly after
issuance, by notice hereunder. In the event issuance of a CO is withheld by
reason of any condition of the Premises not related to Lessee's specific use and
occupancy, Lessor, at its sole cost and expense, shall promptly use its best
efforts to rectify this condition and otherwise will cooperate with Lessee and
render reasonable assistance to Lessee for issuance of the CO. Lessee hereby
agrees to protect, indemnify and save Lessor harmless from and against any and
all loss, damage, expense, cause of action, suits, demands, judgments and claims
of any nature whatsoever arising as a result of Lessee's breach of the covenants
contained in this paragraph, in addition to any other indemnification provisions
set forth in this Lease. Lessee shall deposit no process wastes into the
sanitary sewer system serving the Premises and agrees that only sanitary waste
shall be inserted into the sanitary sewer system. Two (2) EDU(s) of sanitary
sewer capacity has been allocated to the Premises and Lessee shall not exceed
said allocation. Without limiting the generality of the foregoing, Lessee, at
its sole cost and expense shall comply with U.S. Department of Health and Human
Services GUIDELINES FOR PROTECTING BUILDING ENVIRONMENTS FROM AIRBORNE CHEMICAL,
BIOLOGICAL OR RADIOLOGICAL ATTACKS, (PUB. NO. 2002-139). See www.cdc.gov/niosh.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            B. As used herein, "Hazardous Substance" means any substance which
is toxic, ignitable, reactive or corrosive and which is regulated by any local
government, the State of Pennsylvania or the United States Government. Hazardous
Substance includes any and all materials or substances which are defined as
'hazardous waste', 'extremely hazardous waste' or 'hazardous substance' pursuant
to state, federal or local governmental laws or regulations. "Hazardous
Substance" includes, but is not restricted to asbestos, polychlorinated
biphenyls (PCBs) and petroleum. Lessee shall not cause or permit any Hazardous
Substance to be used, stored, generated or disposed of on or in the Premises by
Lessee, Lessee's agents, employees, contractors or invitees, without first
obtaining Lessor's written consent, which may be withheld , delayed or
conditioned at Lessor's sole and absolute discretion. If Hazardous Substances
are used, stored, generated or disposed of on or in the Premises or if the
Premises become contaminated in any manner for which Lessee is legally liable,
Lessee shall indemnify, defend and hold harmless the Lessor from any and all
claims, damages, fines, judgments, penalties, costs, liabilities or losses
(including without limitation, a decrease in value of the Premises or the
Building or the Lot, damages because of adverse impact on marketing of the
Premises and any and all sums paid for settlement of claims, attorneys',
consultant and expert fees) arising during or after the term hereof and arising
as a result of such contamination by Lessee. This indemnification includes,
without limitation, any and all costs incurred because of any investigation of
the Lot or any clean-up, removal or restoration mandated by a federal, state or
local agency or political subdivision. In addition, if Lessee causes or permits
the presence of any Hazardous Substance on the Premises and this results in
contamination, Lessee shall promptly, at its sole expense, take any and all
necessary actions to return the Premises to the condition existing before the
presence of any such Hazardous Substance on the Premises, provided, however,
that Lessee shall first obtain Lessor's approval for any such remedial action.
Within ten (10) days after receipt, Lessor and Lessee shall advise the other
party in writing and provide the other party with copies of (as applicable), any
notices alleging violation of any law or regulation relating to any Hazardous
Substance upon any portion of the Premises, the Building or the Lot; any claims
made or threatened in writing regarding non-compliance with any law or
regulation involving the presence of any Hazardous Substance on any portion of
the Premises, the Building or the Lot; or any governmental or regulatory actions
or investigations instituted or threatened regarding non-compliance with any law
or regulation involving any Hazardous Substance upon any portion of the

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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Premises, the Building or the Lot. If Lessor has reasonable cause to believe
that the Premises is in violation of any of the provisions of this Article 10
(B) , Lessor shall, upon prior notice to Lessee, have the right, but no
obligation, at any time that is reasonable under the circumstances: (i)to enter
upon the Premises, take samples, review Lessee's books and records for any
notices related to environmental violations, interview Lessee's employees and
officers; (ii) either, cause environmental site assessments in accordance with
ASTM Standard E-1527-97 (as amended, from time to time, (the "ESA's") to be
performed, or require Lessee to cause the ESA's to be performed and provided to
Lessor within a reasonable time; and (iii) conduct such other activities as
Lessor, in its sole and absolute discretion, deems appropriate, ((i),(ii) and
(iii) being referred to herein as the "Audit". Lessee shall cooperate fully in
the conduct of the Audit. Lessor shall not unreasonably disturb the normal
operation of the Premises in the course of the Audit. Lessee shall, upon demand,
pay, as Additional Rent all costs and expenses of Lessor connected with the
Audit if it discloses the need for any remedial work. Prior to the Lease
Commencement Date, and thereafter, promptly, following notice from Lessor,
Lessee shall provide Lessor with true and correct copies of all documents
concerning Hazardous Substances which are, or will be, stored, used, consumed or
generally are, or will be, present on the Premises, including, but not limited
to, all material safety data sheets, manifests, programs, manuals, reporting
procedures, warnings, instructions or other documents. Where materials generated
by Lessee are disposed of off of the Premises, Lessee agrees that Lessor is not
the owner of the materials, and indemnifies and holds Lessor harmless for any
costs incurred in defending and paying for any action where it is alleged that
Lessor is the owner of the materials.

            C. Within ten (10) days after receipt, Lessor and Lessee shall
advise the other party in writing and provide the other with copies of (as
applicable), any notices alleging violation of the Americans with Disabilities
Act of 1990 ("ADA") relating to any portion of the Premises, the Building or the
Lot; any claims made or threatened in writing regarding non-compliance with the
ADA and relating to any portion of the Premises, the Building or the Lot; or any
governmental or regulatory actions or investigations instituted or threatened
regarding non-compliance with the ADA and relating to any portion of the
Premises, the Building or the Lot.

      10.1 LESSOR'S ENVIRONMENTAL REPRESENTATION

            A. Lessor warrants and represents that to the best of its knowledge
information, and belief, no Hazardous Substances exist upon the Premises, as of
the Effective Date.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            B. Lessor shall reimburse Lessee for all out of pocket costs
incurred by Lessee as a result of a breach of Lessor's environmental warranty
and representation set forth in Subparagraph A.

      11. INDEMNIFICATION.

            A. The Lessee shall keep, save and hold harmless the Lessor from any
and all losses, damages and liability for anything and everything whatsoever (i)
arising from or out of the occupancy of the Premises and use of abutting and
nearby common areas or any part thereof or any sidewalks, streets, driveways,
right of way or roadways, adjacent or nearby thereto, during the term of this
Lease, or any Renewal Term or Extension Term thereof, by or under the Lessee,
the Lessee's agents, servants, contractors, sub-contractors, or business
visitors, and (ii) from any loss or damage or liability ,as above described,
arising from any fault or negligence by the Lessee or any failure on the
Lessee's part to comply with any of the covenants, terms and conditions
contained in this Lease, or regardless of Lessee's fault, except as otherwise
provided in Article 16 , INFRA.

            B. Notwithstanding anything set forth herein to the contrary, in the
event Lessor is held liable to an employee of Lessee (either an actual employee
or one deemed to be an employee by operation of law) on account of work-related
injuries sustained by such employee, Lessee shall be liable to Lessor for
damages, contribution and indemnity in any action at law or otherwise. This
subparagraph 11(B) shall constitute "a written contract" between Lessor and
Lessee pursuant to Section 303(b) of the Workmen's Compensation Act, 77 P.S.
(section)481(b).

      12. MECHANIC'S LIENS.

            Lessee shall not permit any mechanic's, materialmen's or similar
liens to remain upon the Premises for labor or material furnished to Lessee or
claimed to have been furnished to Lessee in connection with work of any
character performed or claimed to have been performed on the Premises by, or at
the direction of, or with the consent of Lessee, whether such work was performed
or materials furnished before or after the commencement of the term of this
Lease. Lessee may, however, contest the validity of any such lien or claim,
provided Lessee shall give Lessor such reasonable security to insure payment and
to prevent any sale, foreclosure or forfeiture of the Premises by reason of such
non-payment as Lessor may require. Upon final determination of the validity of
any such lien or claim, Lessee shall immediately pay any judgment or decree
rendered against Lessee or Lessor with all proper costs and charges and shall
cause such lien to be released of record without cost to Lessor.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      13. SUBORDINATION.

            A. This Lease shall be subordinate in all respects to the lien of
any mortgage now or hereafter encumbering the Premises or any part thereof, with
the same force and effect as if such mortgage had been executed, acknowledged,
delivered and recorded prior to the execution of this Lease. The subordination
contained in this Paragraph 13 is and shall be effective without the necessity
of any further act or writing by either party hereto, but Lessee agrees that it
will, immediately upon Lessor's request, and at no additional charge to Lessor,
deliver such additional documents as any mortgagee may require to confirm such
subordination. Lessee, at the request of any mortgagee or any one acquiring
title to Lessor's estate or the Premises by foreclosure, deed in lieu of
foreclosure or otherwise, shall attorn to the then owner and recognize such
owner as Lessor for the balance of the term of this Lease, subject to all of the
terms and provisions hereof. Such mortgagee or purchaser at said foreclosure
sale shall not be:

            (1) Liable for any act or omission of Lessor;

            (2) Subject to any offsets or defenses which Lessee may have against
the Lessor;

            (3) Bound by any rent or Minimum Annual Rent which the Lessee may
have paid to the Lessor for more than the current month; or

            (4) Bound by any amendment or modification of the Lease made,
without its consent.

            B. At Lessee's request, by notice hereunder, Lessor shall obtain a
Subordination, Non-Disturbance and Attornment Agreement from Lessor's mortgagee
in the mortgagee's standard form. Any fee charged for this agreement by the
mortgagee shall be paid by Lessee as Additional Rent.

            C. Notwithstanding anything else contained herein to the contrary,
any mortgagee of the Premises, shall have the option to subordinate its mortgage
to this Lease by written notice to Lessor and Lessee, in which event this Lease
shall thereupon become senior to the lien of such mortgage.

      14. ESTOPPEL CERTIFICATE.

            Lessee agrees to execute and deliver to any mortgagee or purchaser
of the Premises immediately upon request, and at no additional charge to Lessor,
an "Estoppel Certificate" stating the amount of rent due from Lessee hereunder,
that this Lease remains in full force and effect without modification, any
reasonable representations requested by said mortgagee or purchaser, and that
Lessee has no setoffs against rent; or if this Lease has been modified, or if
Lessee has any setoffs against rent, the exact nature of the modification and
the precise amount of the setoffs.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      15. ASSIGNMENT AND SUBLETTING.

            Lessee may assign this Lease in whole or in part, under-let
(including, but not limited to permitting or licencing third parties to maintain
employees, personnel, inventory or other personal property on the Premises or
any part thereof) and sublet all or a portion of the Premises providing the use
and occupancy of the Premises of the assignee, underlessee or sublessee shall
(i) be no more hazardous than that of Lessee's present business; (ii) shall not
involve construction of any Alterations and Improvements to the Premises; and
(iii) shall comply with zoning and all other governmental regulations and
regulations of insurance underwriters. Provided further, Lessee shall obtain
prior written approval from Lessor for any assignment, underletting or
subletting, which shall not be unreasonably withheld. Lessor may specifically
withhold consent to any assignment, underletting or subletting if the proposed
assignee's, underlessee's or sublessee's projected use and occupancy of the
Premises: (y) involves the use, storage, generation or disposal of Hazardous
Substances, as defined in subparagraph 10(B) of this Lease or (z) violates any
provisions of subparagraphs 15 (i), (ii) or (iii), above. However, Lessee shall
not be relieved of any liability or responsibility under the terms of this Lease
by reason of such assignment, underletting or subletting. Neither Lessee, nor
any assignee, underlessee or sub-lessee may assign, mortgage or pledge this
Lease or any permitted sublease or underlease, as collateral, without an
additional written consent by the Lessor, which consent may be withheld for any
reason whatsoever, and without such consent no such assignment, mortgage or
pledge shall be valid.

            An assignment of this Lease shall be deemed to have occurred if in a
single transaction or a related or unrelated series of transactions, and whether
Lessee is a corporation, partnership or other entity, more than fifty percent
(50%) or more of the ownership interests in Lessee (whether shares, partnership
interests, membership interests or other equity, and whether one or more classes
thereof) are transferred, diluted, reduced, or otherwise affected with the
result that the owners or holders on the date of this Lease of the ownership
interests in each class of equity of Lessee together cease to own fifty percent
(50%) or more of such equity. This section shall not apply to sale of shares of
stock on the NASDAQ National Listings or the New York or American Stock
Exchanges.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      16. WAIVER OF SUBROGATION.

            Lessor and Lessee hereby release each other and otherwise waive any
claim that each may have against the other for damage to property which and to
the extent such damage is covered by property insurance maintained, or required
by this Lease to be maintained, by such party and further agree that all
insurance policies which each of them shall carry to insure the Premises and the
contents therein against casualty loss shall contain waivers of the right of
subrogation against Lessor and Lessee herein, their heirs, administrators,
successors and assigns.

      17. SECURITY DEPOSIT.

            Lessee shall have deposited with Lessor upon execution hereof, the
sum of *** as security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease, Lessor may use,
apply or retain all or any portion of said security deposit, and interest earned
thereon, for the payment of any rent or other charge in default or for the
payment of other sums to which Lessor may become obligated by reason of Lessee's
default, or to compensate Lessor for any loss or damage which Lessor may suffer
thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee
shall within ten (10) days after written demand thereof, deposit funds with
Lessor, by good check, in an amount sufficient to restore said deposit to the
full amount herein-above stated and Lessee's failure to do so shall be a
material breach of this Lease. If Lessee is in default under this Lease more two
(2) times within any twelve (12) month period, irrespective of whether or not
such default is cured, then, without limiting Lessor's other rights and remedies
provided for in this Lease or at law or equity, or both, the Lessee, within ten
(10) days of notice from Lessor, shall deposit with Lessor such amount as is
necessary to increase the deposit held by Lessor to two (2) times the amount
held at the time of said notice. Lessor shall be required to keep said deposit
separate from its general accounts, in an interest bearing account. If Lessee
performs all of Lessee's obligations hereunder, said deposit, or so much thereof
as had not theretofore been applied by Lessor, shall be returned to Lessee with
interest earned thereon (or at Lessor's option, to the last assignee, if any, of
Lessee's interest hereunder) at the expiration of the term hereof, and after
Lessee has vacated the Premises. No trust relationship is granted herein between
Lessor and Lessee with respect to said security deposit. In the event Lessee has
performed all of its obligations hereunder without default during the first
Lease Year, the security deposit shall be reduced to *** and Lessor shall
refund, promptly, the difference.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      18. INSPECTION - ACCESS.

            A. Lessor may, at all reasonable times, by itself or its duly
authorized agents, after reasonable notice to Lessee, except in the event of an
emergency, go upon and inspect the Premises and every part thereof and/or at its
option to make repairs, alterations and additions to the Premises or the
building of which the Premises is a part. Provided, however, that Lessor agrees
that it will not enter upon the Premises for repairs except during business
hours, without the consent of Lessee, unless said repairs are of an emergency
nature. Elective additions and alterations can only be made by Lessor without
interfering with the Lessee's business.

      19. RIGHT OF ASSIGNEE.

            All rights granted to Lessor hereunder may be exercised by any
assignee of Lessor's right, title and interest in this Lease in his, her or
their name, any statute, rule of court, custom or practice to the contrary
notwithstanding. In addition, upon such assignment, Lessor may pay over any
security deposit hereunder to said assignee and upon said payment, all
obligations of Lessor to Lessee pertaining to said security deposit shall
terminate. In addition, upon assignment of Lessor's interest herein to an
assignee, any obligations of Lessor hereunder shall cease and terminate and said
Assignee shall be responsible therefor to Lessee.

      20. RESTRICTIONS ON FLOOR AND WALL LOADS.

            Lessee shall not place a load on any floor or wall of the Premises
which is greater than the floor load per square foot or wall load per square
foot respectively which such floor or wall respectively was designed to bear and
which is permitted by law.

      21. SIGNS.

            Lessee may erect reasonable signs which will not damage or injure in
any way the roof of the Building or any other portion of the Building and will
not detract from the appearance of the Premises and surrounding environments,
having first obtained Lessor's permission, said permission to not be
unreasonably withheld. Lessee shall conform, at its sole cost and expense, with
all governmental rules and regulations, with respect to Lessee's sign, and will
save Lessor harmless from any mechanic's lien claim or claims for personal
injury or property damage arising from the erection, provision, installation or
maintenance and removal of said sign. At the termination of this Lease, Lessee
shall remove all signs and shall restore the Premises to its original good
condition, at Lessee's sole cost and expense.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      22. QUIET ENJOYMENT.

            Notwithstanding anything herein contained to the contrary, Lessee's
possession and quiet enjoyment of the Premises will not be interfered with by
Lessor or any person claiming by, through or under Lessor or by any predecessor
of Lessor so long as Lessee complies with the terms of this Lease and is not in
default hereunder.

      23. EVENTS OF DEFAULT - REMEDIES.

            A. The following events or any one or more of them shall be events
of default under this Lease:

                  (i) Lessee shall fail to pay any Minimum Annual Rent,
Additional Rent or other sums payable hereunder when the same are due and
payable; or

                  (ii) Lessee shall fail to perform or comply with any of the
other terms, covenants, agreements or conditions hereof; or

                  (iii) Lessee shall make a general assignment for the benefit
of creditors or shall admit in writing its inability to pay its debts as they
become due, or shall file a petition in bankruptcy or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or shall file an
answer admitting or not contesting the material allegations of a petition
against it in any such proceeding, or shall seek or consent to or acquiesce in
the appointment of any trustee, receiver or liquidator of Lessee or any material
part of its property; or

                  (iv) If within sixty (60) days after commencement of any
proceedings against Lessee seeking any reorganization, arrangement, composition,
readjustment, liquidation or dissolution or similar relief under any present or
future statute, law or regulation, such proceedings shall not have been
dismissed or, if, within sixty (60) days after the appointment without the
consent or acquiescence of Lessee of any trustee, receiver or liquidator of
Lessee or any material part of its properties, such appointment shall not have
been vacated

                  (v) Lessee shall vacate the Premises in violation of Paragraph
28 hereof.

            B. In the event of any such event of default (regardless of the
pendency of any proceeding which has or might have the effect of preventing
Lessee from complying with the terms of this Lease) Lessor at any time
thereafter may exercise any one or more of the following remedies:

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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                  (i) EXCLUSION. -Deleted by the Parties.

                  (ii) TERMINATION OF LEASE. Lessor may terminate this Lease, by
notice to Lessee (the "Termination Notice") setting forth the Lease Termination
Date, without any right by Lessee to reinstate its rights by payment of rent due
or other performance of the terms and conditions hereof. On or before the Lease
Termination date, Lessee shall surrender possession of the Premises to Lessor
and restore the Premises to the condition required by the terms and conditions
of this Lease. Lessor shall immediately become entitled to receive from Lessee
all unpaid installments of Minimum Annual Rent, Holdover Rent, Additional Rent,
and other charges hereunder, accruing up to and including the Restoration Date.

                  (iii) RE-LEASING. Without terminating this Lease, Lessor may
re-enter and repossess the Premises or any part thereof (which shall not
constitute an eviction or a surrender of the Lease by Lessee) and lease them to
any other person upon such terms as Lessor shall deem reasonable for a term
within or beyond the term of this Lease; provided, however, that any such
re-leasing prior to termination shall be for the account of Lessee, and Lessee
shall remain liable for:

                        (1) All Minimum Annual Rent, Additional Rent and other
sums which would be payable under this Lease by Lessee in the absence of such
expiration, termination or repossession, less

                        (2) The net proceeds, if any, of any re-leasing
effective for the account of Lessee after deducting from such proceeds without
limitation, all repossession costs, broker's commissions, attorneys'
commissions, attorneys' fees and expenses, employees' expenses, reasonable
alteration costs and expenses of preparation for such re-leasing.

                        If the Premises are at the time of default sublet or
leased by Lessee to others, Lessor may, as Lessee's agent, collect rents due
from any subtenant or other tenant and apply such rents to the rent and other
obligations due hereunder without in any way affecting Lessee's obligations to
Lessor hereunder. Such agency, being given for security, is hereby declared to
be irrevocable.

                  (iv) ACCELERATION OF RENT. Lessor may declare rent and all
items of Additional Rent for the entire balance of the then current term
immediately due and payable, together with all other charges, payments, costs
and expenses payable by Lessee as though such amounts were payable in advance on
the date of the event of default occurred.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            C. Except as expressly provided herein no repossession of the
Premises or any part thereof or exclusion of Lessee from the Premises pursuant
to subparagraph B above or otherwise shall relieve Lessee of its liabilities and
obligations hereunder, all of which shall survive such exclusion, expiration, or
repossession and Lessor may, at its option, sue for and collect rent and other
charges due hereunder at any time and from time to time as and when such charges
accrue or are accelerated.

            D. With respect to any portion of the Premises which Lessee has not
opened for the conduct of its normal business activities, during normal business
hours, Lessor may access the Premises, change the locks, and remove all persons
and property therefrom and store such property in a public warehouse or
elsewhere at the cost of and for the account of Lessee, without service of
notice or resort to legal process (all of which Lessee expressly waives) and
without being deemed guilty of trespass or becoming liable for any loss or
damage which may be occasioned thereby. Lessor shall have a lien for the payment
of all sums agreed to be paid by Lessee herein upon all Lessee's property, which
lien is to be in addition to any landlord's lien now or hereafter provided by
law.

            E. The parties hereby waive trial by jury in any action, proceeding,
or counterclaim brought by either of them against the other on any matters
arising out of or in any way connected with this Lease, the relationship of
Lessor and Lessee, Lessee's use or occupancy of the Premises and/or any claim of
injury or damages. In the event Lessor commences any proceedings for non-payment
of rent or Additional Rent, Lessee will not interpose any counterclaim of any
nature or description in any such proceedings. This shall not be construed,
however, as a waiver of Lessee's right to assert any such claims in any separate
action brought by Lessee.

            F. Lessee hereby expressly waives any and all rights of redemption
granted by or under any present or future law in the event this Lease is
terminated or Lessee is evicted or dispossessed by reason of violation by Lessee
of any of the provisions of this Lease.

            G. In the event of breach or threatened breach by Lessee of any
provision of this Lease, Lessor shall have the right of injunction as if other
remedies were not provided for herein.

            H. No right or remedy herein conferred upon or reserved to Lessor is
intended to be exclusive of any other right or remedy herein or by law provided,
but each shall be cumulative and in addition to every other right or remedy
given herein or now or hereafter existing at law or in equity or by statute.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            I. If Lessee shall default in the performance of any covenant
required to be performed by it under this Lease, Lessor may perform the same for
the account and at the expense of Lessee, after first giving notice to Lessee of
its intention to do so. If Lessor at any time is compelled to pay or elects to
pay, any sum of money or to do any act which will require the payment of any sum
of money by reason of the failure of Lessee to comply with any provisions
hereof, or if Lessor is compelled to incur any expense, including reasonable
counsel fees, in instituting, prosecuting or defending against any action or
proceedings instituted by reason of any default of Lessee hereunder, the amount
of such payments or expenses shall be paid by Lessee to Lessor as Additional
Rent on the next day following such payment or the incurring of such expenses
upon which a regular monthly rental is due, together with interest thereon at
the rate set forth herein.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            J. No waiver by Lessor of any breach by Lessee of any of its
obligations, agreements or covenants hereunder shall be a waiver of any
subsequent breach or of any other obligation, agreement or covenant, nor shall
any forbearance by Lessor to seek a remedy for any breach by Lessee be a waiver
by Lessor of its rights and remedies with respect to such or any subsequent
breach.

            K. Lessee expressly agrees that the entering of judgment therein
shall not bar Lessor from bringing subsequent actions or proceedings from time
to time.

                                 *** NOTICE ***

            In Pennsylvania, court decisions provide that a Tenant can waive its
due process rights to a deprivation of hearing and notice when it VOLUNTARILY,
KNOWINGLY AND INTELLIGENTLY CONSENTS to an agreement containing a cognovit
(meaning, CONFESSION OF JUDGMENT) clause. See JORDAN V. FOX, ROTHSCHILD, O'BRIEN
& Frankel, 20 F.3d 1250 (3d Cir. 1994) (holding that judgment against a
REASONABLY SOPHISTICATED, CORPORATE [OR BUSINESS] DEBTOR who has signed an
instrument containing a document permitting judgment by confession as part of a
commercial transaction IS ENFORCEABLE in the same manner as any other judgment);
RAPPAPORT V. NORLAR, INC., No. 93-4756, 1994 U.S. Dist. Lexis 5754 at *18 (E.D.
Pa. April 29, 1994) and GERMANTOWN SAVINGS BANK V. TALACKI, 520, 657 A.2d 1285,
1289 (Pa. Super. Ct. 1995).

            THE FOLLOWING PARAGRAPHS 23(L) AND 23(M) EACH SETS FORTH A WARRANT
OF ATTORNEY FOR ANY PROTHONOTARY OR ATTORNEY OF COURT OF RECORD TO CONFESS
JUDGMENT AGAINST THE LESSEE. IN GRANTING THESE WARRANTS OF ATTORNEY TO CONFESS
JUDGMENT AGAINST THE LESSEE, THE LESSEE, FOLLOWING CONSULTATION WITH (OR
DECISION NOT TO CONSULT) SEPARATE COUNSEL FOR THE LESSEE AND WITH KNOWLEDGE OF
THE LEGAL EFFECT THEREOF, HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND
UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE LESSEE HAS OR MAY HAVE TO PRIOR
NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND
LAWS OF THE UNITED STATES OF AMERICA, THE COMMONWEALTH OF PENNSYLVANIA OR
ELSEWHERE. IT IS SPECIFICALLY ACKNOWLEDGED BY THE LESSEE THAT THE LESSOR HAS
RELIED ON THESE WARRANTS OF ATTORNEY IN EXECUTING THIS LEASE AND AS AN
INDUCEMENT TO GRANT FINANCIAL ACCOMMODATIONS HEREUNDER TO THE LESSEE.

            LESSEE EXPRESSLY WARRANTS AND REPRESENTS THAT THE FOLLOWING WARRANT
OF ATTORNEY TO CONFESS JUDGMENT HAS BEEN AUTHORIZED EXPRESSLY BY PROPER ACTION
OF THE BOARD OF DIRECTORS OF LESSEE.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
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            LESSEE AND LESSOR HEREBY CONSENT TO THE JURISDICTION OF THE COURT OF
COMMON PLEAS OF MONTGOMERY COUNTY PENNSYLVANIA OR THE FEDERAL DISTRICT COURT FOR
THE EASTERN DISTRICT OF PENNSYLVANIA FOR ANY PROCEEDING IN CONNECTION HEREWITH,
AND HEREBY WAIVE OBJECTIONS AS TO VENUE AND CONVENIENCE OF FORUM IF VENUE IS IN
MONTGOMERY COUNTY, PENNSYLVANIA OR IN THE FEDERAL DISTRICT COURT FOR THE EASTERN
DISTRICT OF PENNSYLVANIA. IN ANY ACTION OR SUIT UNDER THIS LEASE, SERVICE OF
PROCESS MAY BE MADE UPON LESSOR OR ANY LESSEE BY MAILING A COPY OF THE PROCESS
BY FIRST CLASS MAIL TO THE RECIPIENT AT THE RESPECTIVE ADDRESS SET FORTH IN
PARAGRAPH 26, INFRA. LESSOR AND LESSEE HEREBY WAIVES ANY AND ALL OBJECTIONS TO
SUFFICIENCY OF SERVICE OF PROCESS IF DULY SERVED IN THIS MANNER.

            L. Upon the occurrence of any event of default which is not cured
within any period of time herein provided, Lessee, with understanding of the
RELINQUISHMENT OF CERTAIN RIGHTS to which Lessee would otherwise be entitled as
a matter of law and due process including the right to notice and judicial
hearing, hereby irrevocably empowers any prothonotary, clerk or attorney of any
court of the Commonwealth of Pennsylvania to appear for Lessee, with or without
declaration filed, as of any term, and therein TO CONFESS OR ENTER JUDGMENT
AGAINST LESSEE for rent and/or the charges, payments, costs and expenses herein
reserved as rent, or herein agreed to be paid by lessee, and then due and unpaid
and for interest and costs, together with a reasonable attorney's commission of
not less than Ten Percent (10%) of such rents or other charges or expenses then
due. Such authority shall not be exhausted by one exercise thereof, but judgment
may be confessed as aforesaid from time to time as often as any of said rent
and/or other charges reserved as rent or agreed to be paid by Lessee shall fall
due or be in arrears.

            M. Upon the occurrence of any event of default which is not cured
within any period of time herein provided, Lessee with understanding of the
RELINQUISHMENT OF CERTAIN RIGHTS, to which Lessee would otherwise be entitled as
a matter of law and due process, including the right to notice and judicial
hearing, hereby authorizes and empowers any attorney of any court of record in
the Commonwealth of Pennsylvania as attorney for Lessee, as well as for all
persons claiming under, by or through Lessee, to appear for Lessee and enter in
any competent court, in accordance with the then applicable rules of such court,
an action in ejectment for possession of the Premises, without any stay of
execution or appeal, against Lessee and all persons claiming under, by or
through Lessee and therein CONFESS JUDGMENT FOR THE RECOVERY BY LESSOR OF
POSSESSION OF THE PREMISES, for which this Lease (or a copy of thereof) shall be
sufficient warrant, whereupon if Lessor so desires, a writ of possession may be
issued forthwith, without any prior writ or proceeding whatsoever. It is hereby
expressly agreed that if for any reason, after such action has been commenced,
the same shall be discontinued, marked satisfied of record or terminated, or
possession of the Premises remain in or be restored to Lessee, Lessor shall have
the right for the same default, or any subsequent default, to bring one or more
actions in the manner herein set forth to recover possession of the Premises.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            N. In any action involving a confession of judgment by Lessor
against Lessee, Lessor shall first cause to be filed in such action an affidavit
made by it or someone acting for it, setting forth the facts necessary to
authorize the entry of judgment and if a true copy of this Lease (and such
affidavit shall be sufficient evidence of the truth of the copy) be filed in
such action, it shall not be necessary to file the original as warrant of
attorney, any rule of court, custom or practice to the contrary notwithstanding.
Lessee hereby releases Lessor and any and all attorneys who may appear for
Lessee, from all liability for all errors in said proceedings.

            O. If proceedings shall be commenced by Lessor to recover possession
under the Acts of Assembly and Rules of Civil Procedure, either at the end of
the term or earlier termination of this Lease, or for nonpayment of rent or any
other reason, Lessee specifically waives the right to the three (3) month notice
and to the fifteen (15) or thirty (30) days notice required by the Landlord and
Tenant Act of 1951, and agrees that notice under either Pa. R.C.P. 2973.2 or Pa.
R.C.P. 2973.3, as amended from time to time, shall be sufficient in either or
any such case.

            P. Notwithstanding anything herein elsewhere contained to the
contrary, Lessor agrees that Lessor will not exercise any right or remedy
provided for in this Lease or allowed by law, because of any default of Lessee,
unless Lessor shall first have given written notice thereof to Lessee, and
Lessee, (i) within a period of ten (10) days thereafter shall have failed to pay
the sum or sums due if the default consists of the failure to pay money, or (ii)
if said default shall consist of anything other than the failure to pay the sum
or sums due hereunder, Lessee shall have failed within the period of twenty (20)
days after notice from Lessor to have cured said default, except that if such
default cannot be cured within said twenty (20) days, Lessee shall only be in
default if Lessee shall have failed to begin and actively and diligently in good
faith proceed with the correction of the default until it shall be fully
corrected not later than sixty (60) days after such notice; provided, further,
however, that no such notice from Lessor shall be required nor shall Lessor be
required to allow any part of the said notice periods if Lessee shall have
removed from or shall be in the course of removing from the Premises in
violation of Paragraph 28, INFRA., or Lessee shall have failed to provide any
insurance required by this Lease or if a Petition in Bankruptcy or for
reorganization shall have been filed by or against the Lessee resulting in an
order for relief in bankruptcy, or for reorganization, or if a receiver or
trustee is appointed for Lessee and such appointment and such receivership or
trusteeship is not terminated within sixty (60) days, or if Lessee makes an
assignment for the benefit of creditors, or if Lessee is levied upon and is
about to be sold out upon the Premises by any sheriff, Marshall or constable, or
if Lessee violates any of the provisions of Paragraph 10 (B), INFRA., dealing
with Hazardous Substances. Notwithstanding Lessor shall not be required to give
any notice called for by this Paragraph of the Lease more than two (2) times
within any Lease Year.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      24. ALTERATIONS AND ADDITIONS.

            A. Lessee may, at its own cost and expense, install additional
improvements ("Alterations and Improvements") upon the Premises, provided that
such Alterations and Improvements shall not adversely affect the roof of the
Premises or the Building, generally, or any Systems contained therein.

            B. All such Alterations and Improvements, costing , in their
entirety over the sum of $5,000.00, shall be in accordance with plans and
specifications to be supplied by Lessee, which plans shall in all instances
first be subject to Lessor's prior written approval, ("Lessor's Approval") which
shall not be unreasonably withheld. Lessee shall provide Lessor with evidence
that each contractor performing Alterations and Improvements on the Premises has
adequate workmen's compensation insurance and general liability insurance in the
amount of at least Two Million Dollars ($2,000,000.00) for bodily injury or
death to any person or persons and property damage, on an occurrence basis,
together with a certificate from the insurer who shall be reasonably
satisfactory to Lessor, to the effect that such insurance may not be cancelled
or substantially modified without at least thirty (30) days' prior written
notice to Lessor. Lessor's Approval is intended solely for purposes of this
Paragraph 24, to provide Lessor with notice of all Alterations and Improvements,
and the opportunity to reject any adverse effect on Lessor's obligations under
this Lease. Lessor's Approval shall not signify approval by Lessor of the design
or functionality of any Alterations and Improvements and shall not confer any
rights whatsoever on third parties.

            C. To the extent permitted by law, no Alterations or Improvements at
the Premises shall be done except after filing a waiver of the right to file any
lien therefor (commonly known as "mechanic's lien") in the local prothonotary's
office or elsewhere as provided by law, so as to constitute an effective waiver
by anyone having a right to file such a lien.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            D. As to Alterations and Improvements installed with prior Lessor's
Approval, Lessee may, or at Lessor's demand given at the time of Lessor's
initial approval of the work,, shall remove all Alterations and Improvements
prior to the end of the term of this Lease and Lessee shall at its own cost and
expense, return the Premises to its condition as of the Lease Commencement Date,
ordinary wear and tear and damage by insured casualty excepted. In the event, in
violation of subparagraph B hereof, Lessee installs Alterations and Improvements
upon the Premises without prior Lessor's Approval, Lessee shall remove all
Alterations and Improvements prior to the end of this Lease, at its own cost and
expense, returning the Premises to its condition as of the Lease Commencement
Date. In the event Lessee shall fail to remove the Alterations and Improvements
and restore the Premises, as herein provided, Lessor shall have the right to go
upon the Premises and do so, and Lessee agrees to pay the cost thereof as
Additional Rent. Additionally, Lessor may decline to accept surrender of the
Premises by Lessee so long as such Alterations and Improvements have not been
removed and until removal of the same, Lessee shall be deemed to have held over
under the provisions of paragraph 2(B), SUPRA. With respect to those Alterations
and Improvements which, with Lessor's consent, have remained upon the Premises
at the end of the term of this Lease, Lessee agrees that title to the same shall
vest in Lessor.

            E. If as a result of any Alterations and Improvements which may be
made to the Premises by the Lessee, either pursuant to this clause or without
Prior Lessor's Approval, any person and/or property shall be injured and/or
damaged, the liability therefor shall be the sole responsibility of Lessee.

            F. In making any Alterations and Improvements, Lessee shall comply
with any and all laws, statutes, ordinances, rules, regulations and requirements
of the municipal and other duly constituted governmental authorities and
insurance organizations.

      25. EXTENSIONS AND RENEWALS.

            A. EXTENSIONS. It is hereby mutually agreed that in the event Lessee
has not given the "Preliminary Renewal Notice" as defined in subparagraph 25(B),
or has given the Preliminary Renewal Notice but has withdrawn the same, Lessee
may terminate this Lease at the end of this term and any Renewal Term or
Extension Term, by giving to Lessor written notice at least one hundred fifty
(150) days prior thereto, and Lessor may terminate this Lease at the end of this
term and any Renewal Term or Extension Term by giving to Lessee written notice
at least one hundred twenty (120) days prior thereto (each an "Expiration
Notice"); but in default of an Expiration Notice given by either party in the
manner provided herein, this Lease shall continue for an extension term of one
(1) year ("Extension Term"), commencing the day after the expiration of the
current term, upon the terms and conditions in force immediately prior to the
expiration of the then-current term, Extension Term or Renewal Term (except for
the Minimum Annual Rent, which shall be computed in subparagraph 25(C)(iii)),
and so on from year to year, unless terminated by the giving of an Expiration
Notice within the times and in the manner aforesaid. In the event that Lessee or
Lessor shall have given an Expiration Notice, and Lessee shall fail or refuse to
completely vacate the Premises and restore the same to the condition required in
this Lease on or before the date designated in the Expiration Notice (the
"Expiration Date"), then it is expressly agreed that Lessor shall have the
option either:

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            (i) to disregard the Expiration Notice as having no force and
effect, whereupon the Expiration Notice shall be null and void, ab initio, as if
never given; or

            (ii) treat Lessee as Holding Over, in accordance with paragraph 2(B)
hereof.

            All powers granted to Lessor by this Lease shall be exercised and
all obligations imposed upon Lessee by this Lease shall be performed by Lessee
as well during any Extension Term or Renewal Term of this Lease as during the
original term hereof.

            Notwithstanding anything set forth in subparagraph 25(A) to the
contrary, if the term of this Lease is not previously terminated, the term of
this Lease shall end absolutely, without further notice, at 11:59 p.m. on the
day previous to the 29th anniversary of the Lease Commencement Date.

      B. OPTIONS TO RENEW.

                  (i) Provided Lessor has not previously given Lessee a notice
under paragraph 23(P) hereof, and Lessee is not in default under the terms of
this Lease at the end of the original term, Lessee shall have the right and
privilege, at its election, to renew the term of this Lease for an additional
period of five (5) years commencing upon the day after the expiration of the
term hereof and terminating five (5) years thereafter without further notice.
Such one year period is hereinafter referred to as the "First Renewal Term".

                        In order to exercise said option, Lessee must give
Lessor written notice of its election to renew ("Preliminary Renewal Notice") at
least one hundred eighty (180) days prior to the expiration of the term hereof.
Said renewal shall be on the same terms and conditions as herein provided for
the original term except that the Minimum Annual Rent shall be calculated as set
forth in subparagraph 25(C). In the event Lessee does not exercise its option to
renew within the time set forth, the second option to renew set forth in
subparagraph 25(B)(ii) hereof shall terminate and the provisions of subparagraph
25(A) shall apply.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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                  (ii) Provided Lessor has not previously given Lessee a notice
under paragraph 23(P) hereof, and Lessee is not in default under the terms of
this Lease at the end of the First Renewal Term and Lessee has exercised its
first option to renew, as set forth in subparagraph 25(B)(i) hereof, Lessee
shall have the right and privilege, at its election, to renew the term of this
Lease for an additional period of five (5) years commencing upon the day after
the expiration of the First Renewal Term and terminating five (5) years
thereafter without further notice. Such one year period is hereinafter referred
to as the "Second Renewal Term".

                        In order to exercise said option, Lessee must give
Lessor Preliminary Renewal Notice at least one hundred eighty (180) days prior
to the expiration of the First Renewal Term. Said second renewal shall be on the
same terms and conditions as herein provided for the First Renewal Term, except
that the Minimum Annual Rent shall be calculated as set forth subparagraph
25(C). In the event Lessee does not exercise its second option to renew within
the time set forth, the provisions of subparagraph 25(A) shall apply.

            C. COMPUTATION OF MINIMUM ANNUAL RENT IN THE EVENT OF RENEWAL.

                  In the event of exercise of the option to renew this Lease by
Lessee in accordance with the terms of subparagraph (B), commencing with the
rental payment due on the first day of the Renewal Term, the Minimum Annual Rent
shall be the greater of the Minimum Annual Rent set forth in this Lease for the
last Lease Year of the original term or the fair market rental. The fair market
rental shall be determined as follows:

                  (i) Within fifteen (15) days from receipt of the Preliminary
Renewal Notice, Lessor shall advise Lessee of the fair market rental of the
Premises as of the commencement of the Renewal Term, by notice hereunder,
including examples of rentals for comparable space in the Bucks and Montgomery
County areas. In no event shall the fair market rent exceed the product of .03
multiplied by the number of whole years or portions thereof, between the Lease
Commencement Date and the first day of the applicable Renewal Term. In the event
Lessee is dissatisfied with the fair market rental as specified by Lessor, it
may withdraw the Preliminary Renewal Notice, by notice to Lessor, given at least
one hundred fifty-one (151) days prior to the end of the term.

                  (ii) The new Minimum Annual Rent, effective on or after the
first day of the Renewal Term and for the balance of said Renewal Term, shall be
the greater of the fair market rent set forth in Lessor's notice (as limited
above in sub-paragraph (i)) or the Minimum Annual Rent as set forth in this
Lease for the last year of the original term, whichever is applicable. This
Minimum Annual Rent shall be payable in equal monthly installments commencing on
the first day of the Renewal Term and on the first day of each month thereafter
during the said Renewal Term.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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                  (iii) For extensions of this Lease under subparagraph 25(A),
the Minimum Annual Rent during a one-year Extension Term shall be the greater of
the Minimum Annual Rent for the previous Lease Year or the fair market rent (as
limited above) for the Premises as of the commencement of the Extension Term, as
determined by Lessor, payable in monthly installments on the first day of each
month during the Extension Term.

      26. PLACE OF PAYMENT OF RENT AND NOTICES.

            All rent shall be payable without notice or demand and all notices
shall be given to Lessor by registered or certified mail, return-receipt
requested, or by nationally-recognized private delivery service issuing
return-receipts, at the following address or at such address as Lessor may
designate by notice to Lessee:

            Nappen & Associates t/a 309 Development Company
            171 Corporate Drive
            Montgomeryville, PA 18936

            All notices required to be given by Lessor to Lessee shall be
sufficiently given if sent by registered or certified mail, return-receipt
requested, or by nationally-recognized private delivery service issuing
return-receipts, to the Premises or to such other place as Lessee may designate
by notice to Lessor.

            All notices or consents required by this Agreement shall be in
writing.

      27. CONDITION OF PREMISES AT TERMINATION.

      At the expiration of the term hereof, Lessee shall surrender the Premises
to Lessor in good order and condition, all Systems in good operating condition,
broom clean, free of all trash and debris (interior and exterior), and all
Alterations and Improvements designated for removal under the provisions of
paragraph 24, supra., having been removed, damage by insured casualty alone
excepted. Provided Lessee is not in default hereunder, all furniture and trade
fixtures installed at the expense of Lessee shall remain the property of Lessee.
Provided Lessee is not in default hereunder, Lessee shall have the right to
remove fixtures and/or equipment installed by Lessee in the herein demised
Premises during the term of this Lease and any Renewal Term or Extension Term.
Lessee agrees to repair at its cost and expense any damage done to the Premises
by reason of the removal of such fixtures and/or equipment.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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      28. VACATION.

            Lessee shall not vacate or desert the Premises during the term of
this Lease or permit the same to be empty and unoccupied during normal business
hours, without taking adequate measures to secure the Premises, reasonably
satisfactory to Lessor.

      29. NET LEASE.

            The parties intend this to be a "fully net" Lease pursuant to which
the rent payable hereunder shall be an absolutely net return to Lessor for the
term of this Lease, undiminished by the taxes, or any of them or any part
thereof or any other carrying charges, maintenance charges (except for Lessor's
responsibilities under Article 6 (B), SUPRA) or any other charges of any kind or
nature whatsoever except any mortgage now or hereafter placed upon the Premises
and Lessor shall not be required to perform any services or furnish any
utilities of any kind or nature whatsoever except as otherwise set forth herein.
Lessor may discontinue at any time, any and all facilities furnished and
services rendered by Lessor not expressly covenanted for herein or required to
be furnished or rendered by law; it being understood that they constitute no
part of the consideration for this Lease.

      30. MISCELLANEOUS.

            A. PARTIES BOUND-NO SET OFF. Subject to the provisions of this Lease
regarding consent by Lessor, this Lease shall be binding upon the parties hereto
and shall be binding upon and inure to the benefit of and be enforceable by
their respective successors and assigns. Lessee may not set off any amount owed
to it, or claimed to be owed to it, by Lessor against any rent due to Lessor
pursuant to the terms of this Lease.

            B. WAIVER OF CUSTOM. Lessor shall have the right at all times, any
law, usage or custom notwithstanding, to enforce strictly the provisions of this
Lease, and the failure of Lessor at any time or times, strictly to enforce any
provision hereof, shall not be construed as having created a custom or waiver in
any way contrary to the specific provisions of this Lease or as having in any
way or manner modified this Lease.

            C. NUMBER AND GENDER. For the purposes of this Lease, the singular
shall include the plural and the plural shall include the singular and the
masculine shall include the feminine and the neuter, as the context may require.
The word "Lessor" as used herein shall mean the owner from time to time of the
fee or equitable title to the Premises and upon transfer of the fee or equitable
title, the person named herein as Lessor shall have no further liability or
obligation hereunder.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            D. CAPTIONS. The captions contained herein are for the convenience
of the parties only. They do not in any way modify, amplify, alter or give full
notice of the provisions hereof.

            E. AMENDMENTS. This Lease may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.

            F. PARTIAL INVALIDITY. If any clause or provision of this Lease or
the application thereof to any person or in any circumstance shall to any extent
be invalid or unenforceable, the remainder of this Lease, or the application of
such clause or provision to persons or in circumstances other than those as to
which it is valid or unenforceable, shall not be affected thereby, and each
clause and provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law.

            G. GOVERNING LAW. This Lease shall be governed by the laws of the
Commonwealth of Pennsylvania.

            H. LESSOR'S SIGNS. Lessor shall have the right to display a "For
Sale" sign at any time, and also, after notice from either party of intention to
determine this Lease, or any time within three (3) months prior to the
expiration of this Lease, a "For Rent" sign, or both "For Rent" and "For Sale"
signs; and all said signs shall be placed upon such part of the Premises as
Lessor may elect and may contain such matter as Lessor shall require.
Prospective purchasers or tenants, authorized by Lessor may inspect the Premises
at reasonable hours at any time on reasonable advanced notice to Lessee so as to
minimize the effect of same on Lessee's use and enjoyment of the Premises.

            I. ENTIRE AGREEMENT. This Lease constitutes the entire agreement
between the parties hereto. Except as set forth herein, there are no promises,
representations or understandings between the parties of any kind or nature
whatsoever.

            J. EFFECTIVENESS. The furnishing of the form of this Lease shall not
constitute an offer and this Lease shall become effective upon and only upon its
execution by and delivery to each party hereto.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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            K. TIME OF THE ESSENCE. All times set forth herein shall be of the
essence of this agreement.

            L. BROKERS. Neither the Lessee nor the Lessor has taken any action
or knows of any circumstances which would make any party hereto liable for any
brokerage, finder's fees, or similar payment (a "Commission") except Lessor's
obligation to pay a Commission to Hart Corporation ("Broker"), a licenced real
estate broker in the Commonwealth of Pennsylvania, under the terms and
conditions of a separate agreement. In the event Lessee employs or engages a
real estate agent, broker, finder, or other representative, other than Broker,
(an "Other Broker") to represent it in connection with an extension or renewal
of the Lease, or a purchase of the Premises, and a Commission is claimed by the
Other Broker, Lessee shall be solely responsible for the payment of Other
Broker's Commission and Lessee shall indemnify Lessor and hold it harmless from
any liability for payment of Other Broker's Commission. Each party agrees to
indemnify the other, if contrary to any term representation or warranty set
forth in this Article, any such party should become liable for the payment of
any Commission, except as aforesaid.

      31. BANKRUPTCY OR INSOLVENCY.

            A. If a petition is filed by or an order for relief is entered
against Lessee under Chapter 7 of the Bankruptcy Code and the trustee of Lessee
elects to assume this Lease for the purpose of assigning it, the election or
assignment, or both, may be made only if all of the terms and conditions of
Paragraphs 31(B) and 31(D) of this Lease are satisfied. If the trustee fails to
elect to assume this Lease for the purpose of assigning it within sixty (60)
days after his appointment, this Lease shall be deemed to have been rejected.
Lessor shall then immediately be entitled to possession of the Premises without
further obligation to Lessee or to the trustee and this Lease will be cancelled.
Lessee's rights to be compensated for damages in the bankruptcy proceeding,
however, shall survive.

            B. If Lessee files a petition for reorganization under Chapter 11 or
13 of the Bankruptcy Code or a proceeding that is filed by or against Lessee
under any other chapter of the Bankruptcy Code is converted to a Chapter 11 or
13 proceeding and Lessee's trustee or Lessee as a debtor-in-possession fails to
assume this Lease within sixty (60) days of filing of the petition or the
conversion, the trustee or the debtor-in-possession will be deemed to have
rejected this Lease. The election to assume this Lease must be given by notice
hereunder and, in Lessor's business judgment, all of the following conditions,
which Lessor and Lessee acknowledge to be commercially reasonably, must have
been satisfied:

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
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                  (a) The trustee or the debtor-in-possession has cured or has
provided to the Lessor adequate assurance, as defined in this Paragraph, that:

                        (i) The trustee will cure all monetary defaults under
this Lease within ten (10) days from the date of the assumption; and

                        (ii) The trustee will cure all non-monetary defaults
under this Lease within thirty (30) days from date of assumption.

                  (b) The trustee or the debtor-in-possession has compensated
Lessor, or has provided to Lessor adequate assurance as defined in this
Paragraph, that within ten (10) days from the date of the assumption, Lessor
will be compensated for any pecuniary loss it incurred arising from the default
of the Lessee, the trustee or the debtor-in-possession as recited in Lessor's
written statement of pecuniary loss sent to the trustee or the
debtor-in-possession by notice hereunder.

                  (c) The trustee or the debtor-in-possession has provided
Lessor with adequate assurance of the future performance of each of Lessee's
obligation under the Lease; provided, however, that:

                        (i) The trustee or debtor-in-possession will also
deposit with Lessor as security for the timely payment of rent, an amount equal
to three months Minimum Annual Rent and Additional Rent accruing under this
Lease on a fully gross basis;

                        (ii) The obligations imposed upon the trustee or the
debtor-in-possession will continue for Lessee after the completion of bankruptcy
proceedings.

                  (d) Lessor has determined that the assumption of the Lease
will not breach any provision in any other lease, mortgage, refinancing
agreement or other agreement by which Lessor is bound relating to the Premises.

                  (e) For purposes of this Paragraph, "adequate assurance" means
that:

                        (i) Lessor will determine that the trustee or the
debtor-in-possession has, will continue to have, sufficient unencumbered assets
after payment of all secured obligations and administrative expenses to assure
Lessor that the trustee or debtor-in-possession will have sufficient funds to
fulfill Lessee's obligations under this Lease.

                        (ii) An order will have been entered segregating
sufficient cash payable to Lessor and/or a valid and perfected first lien in
security interest will have been granted in property of Lessee, trustee or
debtor-in-possession that is acceptable for value in kind to Lessor to secure to
Lessor the obligation of the trustee or debtor-in-possession to cure the
monetary or non-monetary defaults under this Lease within the time periods set
forth above.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-34
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   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

            C. In the event that this Lease is assumed by a trustee appointed to
Lessee or by Lessee as debtor-in-possession under the provisions of Paragraph
31(B) of this Lease, and thereafter Lessee is either adjudicated bankrupt or
files a subsequent petition for arrangement under Chapter 11 of the Bankruptcy
Code, then Lessor may terminate, at its option, this Lease and all of Lessee's
rights under it, by giving notice of Lessor's election to terminate.

            D. If the trustee or the debtor-in-possession has assumed the Lease,
under the terms of subparagraphs (A) or (B) hereof, to assign or to elect to
assign Lessee's interest under this Lease of the estate created by that interest
to any other person, that interest or estate may be assigned only if Lessor
acknowledges in writing that the intended assignee has provided adequate
assurance, as defined in this subparagraph (D), of future performance of all of
the terms, covenants and conditions of this Lease to be performed by the Lessee.

            For the purpose of this subparagraph (D), "adequate assurance of
future performance" means that the Lessor has ascertained that each of the
following conditions have been satisfied:

                  (a) The assignee has submitted a current financial statement,
audited by a certified public accountant, that shows a net worth and working
capital in amounts determined by Lessor to be sufficient to assure the future
performance by the assignee of Lessee's obligations under this Lease;

                  (b) If requested by Lessor, the assignee will obtain
guaranties in form and substance satisfactory to Lessor from one or more persons
who satisfy Lessor's standards of creditworthiness;

                  (c) Lessor has obtained all consents or waivers from any third
party required under any lease, mortgage, financing arrangement, or other
agreement by which Lessor is bound to enable Lessor to permit the assignment.

            E. When, pursuant to the Bankruptcy Code, the trustee or the
debtor-in-possession is obligated to pay reasonable use and occupancy charges
for the use of all or part of the Premises, the charges will not be less than
the minimum monthly rent and all Additional Rent accruing hereunder on a fully
gross basis.

            F. Neither Lessee's interest in the Lease or any estate of Lessee
created in the Lease will pass to any trustee, receiver, assignee for the
benefit of creditors, or any other person or entity or otherwise by operation of
law under the laws of any state having jurisdiction over the person or property
of Lessee ("State Law") unless Lessor consents in writing to this transfer.
Lessor's acceptance of rent or any other payments from any trustee, assignee,
receiver, person or entity will not be deemed to have been waived, or waive, the
need to obtain Lessor's consent or Lessor's right to terminate this Lease for
any transfer of Lessee's interest under this Lease without this consent.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-35
<PAGE>

   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

            G. Lessor may terminate, at its option, by giving Lessee written
notice of this election, this Lease and all of Lessee's rights under this Lease
if any of the following events occur:

                  (a) Lessee's estate created by this Lease is taken in
execution or by other process of law;

                  (b) Lessee or any guarantor of Lessee's obligations under this
Lease ("Guarantor") is adjudicated insolvent pursuant to the provisions of any
present or future insolvency law under the laws of any state having
jurisdiction;

                  (c) Any proceedings or filings by or against that Guarantor
under the Bankruptcy Code or any similar provisions of any future federal
bankruptcy laws;

                  (d) A receiver or trustee of the property of Lessee or the
Guarantor is appointed under State Law by reason of Lessee's or Guarantor's
insolvency or inability to pay its debts as they become due or otherwise; or

                  (e) Any assignment for the benefit of creditors is made of
Lessee's or Guarantor's property under State Law.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
intending to be legally bound, as of the day and year last below written.

                                        NAPPEN & ASSOCIATES, A
                                        PENNSYLVANIA LIMITED PARTNERSHIP
                                        T/A 309 DEVELOPMENT COMPANY
Dated:

                                        By:
                                           ---------------------------------
                                             Robert W. Nappen
                                             General Partner

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-36
<PAGE>

   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

                                        ESW AMERICA, INC.,
                                        A DELAWARE CORPORATION

                                        By:
                                           ---------------------------------
                                        Title:
                                              ------------------------------

Dated:
                                        Attest:
                                               -----------------------------
                                        Title:
                                              ------------------------------
(CORPORATE SEAL)

                                        TIN NO.
                                               -----------------------------

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-37
<PAGE>

   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

                            LEASE AMENDMENT AGREEMENT

      THIS LEASE AMENDMENT AGREEMENT is made as of the last date endorsed hereon
("Effective Date"), by and between NAPPEN & ASSOCIATES, A PENNSYLVANIA LIMITED
PARTNERSHIP, T/A 309 DEVELOPMENT COMPANY ("Lessor")

                                      A N D

      ESW AMERICA, INC., A DELAWARE CORPORATION, DULY REGISTERED TO DO BUSINESS
IN THE COMMONWEALTH OF PENNSYLVANIA ("Lessee").

                               BASIS OF AGREEMENT

      A. By Lease Agreement dated November 16, 2004, Lessor demised and leased
to Lessee and Lessee hired from Lessor that certain premises situate in
Montgomery Township, Montgomery County, Pennsylvania, known and numbered Lot No.
2, Bethlehem Pike Industrial Center, together with the building ("Building")
containing approximately 40,220 sq. ft., more or less, and improvements
constructed thereon, such ground, Building and improvements being hereinafter
called the "Premises".

      B. Lessor and Lessee desire to amend and supplement the Lease in certain
material respects.

      NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:

      1. Paragraph 2 of the Lease is hereby deleted in its entire and the
following substituted therefore:

      "2. TERM.

            A. The term of this Lease shall be five (5) years, sixteen (16) days
      commencing January 15th, 2005 ("Lease Commencement Date") and expiring at
      11:59 p.m. on January 31st, 2010, unless extended, renewed or previously
      terminated, as hereinafter set forth. For purposes of this Lease the date
      of expiration of the latest term, Renewal Term (as hereinafter defined) or
      Extension Term (as hereinafter defined) of this Lease shall be termed the
      "Lease Termination Date".

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-A-1
<PAGE>

   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

            B. If Lessee remains in possession of the Premises, (including
      failure to restore the same to the condition required hereunder being
      deemed to constitute possession of the Premises) after the Lease
      Termination Date, (a "Holding Over"), without the prior written consent of
      Lessor, such Holding Over shall create a Holding Over tenancy from month
      to month, commencing on the day after the Lease Termination Date (the
      "Holdover Term"), with respect to the Premises on all of the same terms
      and conditions as are in effect on the last day of the preceding term,
      except that the monthly installment of Minimum Annual Rent payable during
      each Holdover Term shall be increased to an amount equal to three times
      the monthly installment of Minimum Annual Rent in effect on the last day
      of the preceding term (the "Holdover Rent"). Notwithstanding anything set
      forth to the contrary, Lessor may cancel the Holdover Term at any time
      within such Holding Over tenancy upon five (5) days prior notice to
      Lessee, but such cancellation notwithstanding, Holdover Rent shall accrue
      and shall be payable by Lessee until such time ("Restoration Date") as
      Lessee vacates fully the Premises and restores the same to the condition
      required hereunder.

            C. Lessor shall not be liable to Lessee in any respect in the event
      that Lessor is unable to complete the LR Tenant Improvements by
      January15th 2005, provided Lessee shall not be required to pay any
      installment of Minimum Annual Rent (as hereinafter defined) or Additional
      Rent (as hereinafter defined) until such time as Lessor substantially
      completes the LR Tenant Improvements (i.e., the LR Tenant Improvements are
      completed to the extent, Lessee can use the Premises for the purposes set
      forth in Sub-Article 1c).

            D. Lessee is hereby granted a license to occupy the Premises for the
      period commencing November 1, 2004, and ending January 14th, 2005, at
      Midnight. ("License Period"). During the License Period, all of the terms
      and conditions of this Lease shall be in full force and effect with the
      exception of Paragraph 3, INFRA., so that no Minimum Annual Rent will be
      payable during the License Period, and Paragraph 4, INFRA., so that no
      Additional Rent will be payable during the License Period."

      2. Paragraph 3 of the Lease is hereby deleted in its entirety and the
following substituted therefor:

      "3. MINIMUM ANNUAL RENT.

            The minimum rent for the period commencing January 15th 2005 and
      ending January 31st 2005 shall be Dollars *** to be paid at the time of
      signing this Lease. The minimum annual rent ("Minimum Annual Rent"),
      thereafter, payable by Lessee to Lessor shall be *** per Lease Year(
      meaning each consecutive period of twelve (12) months commencing February
      1, 2005 and each yearly anniversary thereof), lawful money of the United
      States of America, payable in monthly installments in advance during the
      balance of the term of this Lease in sums of *** on the first day of each
      month, commencing February 1st, 2005."

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-A-2
<PAGE>

   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

      3 RATIFICATION.

            PARAGRAPHS 23(L) AND 23(M) OF THE LEASE EACH SETS FORTH A WARRANT OF
ATTORNEY FOR ANY PROTHONOTARY OR ATTORNEY OF COURT OF RECORD TO CONFESS JUDGMENT
AGAINST THE LESSEE. IN GRANTING THESE WARRANTS OF ATTORNEY TO CONFESS JUDGMENT
AGAINST THE LESSEE, THE LESSEE, FOLLOWING CONSULTATION WITH (OR DECISION NOT TO
CONSULT) SEPARATE COUNSEL FOR THE LESSEE AND WITH KNOWLEDGE OF THE LEGAL EFFECT
THEREOF, KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND UNCONDITIONALLY WAIVED ANY
AND ALL RIGHTS THE LESSEE HAD OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR
HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES OF
AMERICA, THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE. IT IS SPECIFICALLY
ACKNOWLEDGED BY THE LESSEE THAT THE LESSOR HAS RELIED ON THESE WARRANTS OF
ATTORNEY IN EXECUTING THIS LEASE AMENDMENT AGREEMENT AND AS AN INDUCEMENT TO
GRANT FINANCIAL ACCOMMODATIONS HEREUNDER TO THE LESSEE.

            LESSEE EXPRESSLY WARRANTS AND REPRESENTS THAT THE WARRANTS OF
ATTORNEY TO CONFESS JUDGMENT HAVE BEEN AUTHORIZED EXPRESSLY BY ALL OF THE
PARTNERS OF LESSEE, IF A PARTNERSHIP, OR BY PROPER ACTION OF THE BOARD OF
DIRECTORS OF LESSEE, IF A CORPORATION.

            Lessee and Lessor, jointly and severally, acknowledge and confirm
that the Lease contains paragraphs 23(L), which paragraph permits the Lessor to
CONFESS JUDGMENT AGAINST LESSEE FOR MONEY DAMAGES and that the Lease contains
paragraph 23(M), which paragraph permits the Lessor to CONFESS JUDGMENT FOR THE
RECOVERY BY LESSOR OF POSSESSION OF THE PREMISES upon the expiration of the then
current term of the Lease. The parties hereto further acknowledge and agree that
nothing contained herein can be construed to impair in any manner whatsoever
Lessor's ability to confess judgment against Lessee pursuant to the terms of the
Lease.

            In all other respects, the terms and conditions of the Lease not
inconsistent with the terms hereof are hereby ratified and confirmed and shall
remain in full force and effect during the term of the Amended Lease.

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-A-3
<PAGE>

   Confidential Treatment Requested by Environmental Solutions Worldwide, Inc.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
intending to be legally bound, as of the day and year last below written.

                                       NAPPEN & ASSOCIATES, A
                                       PENNSYLVANIA LIMITED PARTNERSHIP
                                       T/A 309 DEVELOPMENT COMPANY
Dated:

                                       By:
                                          ------------------------------------
                                             Robert W. Nappen
                                             General Partner

                                       ESW AMERICA, INC.,
                                       A DELAWARE CORPORATION

                                       By:
                                          ------------------------------------
                                       Title:
                                             ---------------------------------

Dated:
                                       Attest:
                                              --------------------------------
                                       Title:
                                             ---------------------------------
(CORPORATE SEAL)

                                       TIN NO.
                                              --------------------------------

Certain information in this document denoted by the symbol *** has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                    ESWW-A-4Exhibit 10.4

                             2002 STOCK OPTION PLAN
                                       OF
                              SYSCAN IMAGING, INC.
                          AS AMENDED ON APRIL 16, 2004

1. PURPOSES OF THE PLAN

         The purposes of the 2002 Stock Option Plan (the "Plan") of Syscan
Imaging, Inc., a Delaware corporation (the "Company"), are to:

         (a) Encourage selected employees, directors and consultants to improve
operations and increase profits of the Company;

         (b) Encourage selected employees, directors and consultants to accept
or continue employment or association with the Company or its Affiliates; and

         (c) Increase the interest of selected employees, directors and
consultants in the Company's welfare through participation in the growth in
value of the common stock of the Company (the "Shares").

         Options granted under this Plan ("Options") may be "incentive stock
options" ("ISOs") intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
"Code"), or "non-qualified stock options" ("NQSOs").

2. ELIGIBLE PERSONS

         Every person who at the date of grant of an Option is an employee of
the Company or of any Affiliate (as defined below) of the Company is eligible to
receive NQSOs or ISOs under this Plan. Every person who at the date of grant is
a consultant to, or non-employee director of, the Company or any Affiliate (as
defined below) of the Company is eligible to receive NQSOs under this Plan. The
term "Affiliate" as used in the Plan means a parent or subsidiary corporation as
defined in the applicable provisions (currently Sections 424(e) and (f),
respectively) of the Code. The term "employee" (within the meaning of Section
3401(c) of the Code) includes an officer or director who is an employee of the
Company. The term "consultant" includes persons employed by, or otherwise
affiliated with, a consultant.

3. STOCK SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS

         Subject to the provisions of Section 6.1.1 of the Plan, the total
number of Shares which may be issued under Options granted pursuant to this Plan
shall not exceed Two million two hundred thousand (2,200,000) Shares. The Shares
covered by the portion of any grant under the Plan which expires unexercised
shall become available again for grants under the Plan.

                                      -1-
<PAGE>

4.       ADMINISTRATION

         (a) The Plan shall be administered by either the Board of Directors of
the Company (the "Board") or by a committee (the "Committee") to which
administration of the Plan, or of part of the Plan, may be delegated by the
Board (in either case, the "Administrator"). The Board shall appoint and remove
members of such Committee, if any, in its discretion in accordance with
applicable laws. If necessary in order to comply with Rule 16b-3 under the
Exchange Act and Section 162(m) of the Code, the Committee shall, in the Board's
discretion, be comprised solely of "non-employee directors" within the meaning
of said Rule 16b-3 and "outside directors" within the meaning of Section 162(m)
of the Code. The foregoing notwithstanding, the Administrator may delegate
nondiscretionary administrative duties to such employees of the Company as it
deems proper and the Board, in its absolute discretion, may at any time and from
time to time exercise any and all rights and duties of the Administrator under
the Plan.

         (b) Subject to the other provisions of this Plan, the Administrator
shall have the authority, in its discretion: (i) to grant Options; (ii) to
determine the fair market value of the Shares subject to Options; (iii) to
determine the exercise price of Options granted; (iv) to determine the persons
to whom, and the time or times at which, Options shall be granted, and the
number of shares subject to each Option; (v) to interpret this Plan; (vi) to
prescribe, amend, and rescind rules and regulations relating to this Plan; (vii)
to determine the terms and provisions of each Option granted (which need not be
identical), including but not limited to, the time or times at which Options
shall be exercisable; (viii) with the consent of the optionee, to modify or
amend any Option; (ix) to defer (with the consent of the optionee) the exercise
date of any Option; (x) to authorize any person to execute on behalf of the
Company any instrument evidencing the grant of an Option; and (xi) to make all
other determinations deemed necessary or advisable for the administration of
this Plan. The Administrator may delegate nondiscretionary administrative duties
to such employees of the Company as it deems proper.

         (c) All questions of interpretation, implementation, and application of
this Plan shall be determined by the Administrator. Such determinations shall be
final and binding on all persons.

5. GRANTING OF OPTIONS; OPTION AGREEMENT

         (a) No Options shall be granted under this Plan after 10 years from the
date of adoption of this Plan by the Board.

         (b) Each Option shall be evidenced by a written stock option agreement,
in form satisfactory to the Administrator, executed by the Company and the
person to whom such Option is granted.

         (c) The stock option agreement shall specify whether each Option it
evidences is an NQSO or an ISO.

         (d) Subject to Section 6.3.3 with respect to ISOs, the Administrator
may approve the grant of Options under this Plan to persons who are expected to
become employees, directors or consultants of the Company, but are not
employees, directors or consultants at the date of approval, and the date of
approval shall be deemed to be the date of grant unless otherwise specified by
the Administrator.

6. TERMS AND CONDITIONS OF OPTIONS

         Each Option granted under this Plan shall be subject to the terms and
conditions set forth in Section 6.1. NQSOs shall also be subject to the terms
and conditions set forth in Section 6.2, but not those set forth in Section 6.3.
ISOs shall also be subject to the terms and conditions set forth in Section 6.3,
but not those set forth in Section 6.2.

                                      -2-
<PAGE>

         6.1 Terms and Conditions to Which All Options Are Subject. All Options
granted under this Plan shall be subject to the following terms and conditions:

                  6.1.1 Changes in Capital Structure. Subject to Section 6.1.2,
if the stock of the Company is changed by reason of a stock split, reverse stock
split, stock dividend, or recapitalization, combination or reclassification,
appropriate adjustments shall be made by the Board in (a) the number and class
of shares of stock subject to this Plan and each Option outstanding under this
Plan, and (b) the exercise price of each outstanding Option; provided, however,
that the Company shall not be required to issue fractional shares as a result of
any such adjustments. Each such adjustment shall be subject to approval by the
Board in its sole discretion.

                  6.1.2 Corporate Transactions. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
optionee at least 30 days prior to such proposed action. To the extent not
previously exercised, all Options will terminate immediately prior to the
consummation of such proposed action; provided, however, that the Administrator,
in the exercise of its sole discretion, may permit exercise of any Options prior
to their termination, even if such Options were not otherwise exercisable. In
the event of a merger or consolidation of the Company with or into another
corporation or entity in which the Company does not survive, or in the event of
a sale of all or substantially all of the assets of the Company in which the
shareholders of the Company receive securities of the acquiring entity or an
affiliate thereof, all Options shall be assumed or equivalent options shall be
substituted by the successor corporation (or other entity) or a parent or
subsidiary of such successor corporation (or other entity); provided, however,
that if such successor does not agree to assume the Options or to substitute
equivalent options therefor, the Administrator, in the exercise of its sole
discretion, may permit the exercise of any of the Options prior to consummation
of such event, even if such Options were not otherwise exercisable.

                  6.1.3 Time of Option Exercise. Subject to Section 5 and
Section 6.3.4, Options granted under this Plan shall be exercisable (a)
immediately as of the effective date of the stock option agreement granting the
Option, or (b) in accordance with a schedule as may be set by the Administrator
(each such date on such schedule, the "Vesting Base Date") and specified in the
written stock option agreement relating to such Option. In any case, no Option
shall be exercisable until a written stock option agreement in form satisfactory
to the Company is executed by the Company and the optionee.

                  6.1.4 Option Grant Date. The date of grant of an Option under
this Plan shall be the date as of which the Administrator approves the grant.

                  6.1.5 Nontransferability of Option Rights. Except with the
express written approval of the Administrator which approval the Administrator
is authorized to give only with respect to NQSOs, no Option granted under this
Plan shall be assignable or otherwise transferable by the optionee except by
will, by the laws of descent and distribution or pursuant to a qualified
domestic relations order. During the life of the optionee, an Option shall be
exercisable only by the optionee.

                  6.1.6 Payment. Except as provided below, payment in full, in
cash, shall be made for all stock purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment shall
constitute general funds of the Company. The Administrator, in the exercise of
its absolute discretion, may authorize any one or more of the following
additional methods of payment:

                                      -3-
<PAGE>

                           (a) Subject to the discretion of the Administrator
and the terms of the stock option agreement
granting the Option, delivery by the optionee of Shares already owned by the
optionee for all or part of the Option price, provided the fair market value
(determined as set forth in Section 6.1.10) of such Shares being delivered is
equal on the date of exercise to the Option price, or such portion thereof as
the optionee is authorized to pay by delivery of such stock; and

                           (b) Subject to the discretion of the Administrator,
through the surrender of Shares then issuable upon
exercise of the Option, provided the fair market value (determined as set forth
in Section 6.1.10) of such Shares is equal on the date of exercise to the Option
price, or such portion thereof as the optionee is authorized to pay by surrender
of such stock.

                  6.1.7 Termination of Employment. If for any reason other than
death or permanent and total disability, an optionee ceases to be employed by
the Company or any of its Affiliates (such event being called a "Termination"),
Options held at the date of Termination (to the extent then exercisable) may be
exercised in whole or in part at any time within three months of the date of
such Termination, or such other period of not less than 30 days after the date
of such Termination as is specified in the Option Agreement or by amendment
thereof (but in no event after the Expiration Date); provided, however, that if
such exercise of the Option would result in liability for the optionee under
Section 16(b) of the Exchange Act, then such three-month period automatically
shall be extended until the tenth day following the last date upon which
optionee has any liability under Section 16(b) (but in no event after the
Expiration Date). If an optionee dies or becomes permanently and totally
disabled (within the meaning of Section 22(e)(3) of the Code) while employed by
the Company or an Affiliate or within the period that the Option remains
exercisable after Termination, Options then held (to the extent then
exercisable) may be exercised, in whole or in part, by the optionee, by the
optionee's personal representative or by the person to whom the Option is
transferred by devise or the laws of descent and distribution, at any time
within twelve months after the death or twelve months after the permanent and
total disability of the optionee or any longer period specified in the Option
Agreement or by amendment thereof (but in no event after the Expiration Date).
For purposes of this Section 6.1.7, "employment" includes service as a director
or as a consultant. For purposes of this Section 6.1.7, an optionee's employment
shall not be deemed to terminate by reason of sick leave, military leave or
other leave of absence approved by the Administrator, if the period of any such
leave does not exceed 90 days or, if longer, if the optionee's right to
reemployment by the Company or any Affiliate is guaranteed either contractually
or by statute.

                  6.1.8 Withholding and Employment Taxes. At the time of
exercise of an Option and as a condition thereto, or at such other time as the
amount of such obligations becomes determinable (the "Tax Date"), the optionee
shall remit to the Company in cash all applicable federal and state withholding
and employment taxes. Such obligation to remit may be satisfied, if authorized
by the Administrator in its sole discretion, after considering any tax,
accounting and financial consequences, by the optionee's (i) delivery of a
promissory note in the required amount on such terms as the Administrator deems
appropriate, (ii) tendering to the Company previously owned Shares or other
securities of the Company with a fair market value equal to the required amount,
or (iii) agreeing to have Shares (with a fair market value equal to the required
amount) which are acquired upon exercise of the Option withheld by the Company.

                                      -4-
<PAGE>

                  6.1.9 Other Provisions. Each Option granted under this Plan
may contain such other terms, provisions, and conditions not inconsistent with
this Plan as may be determined by the Administrator, and each ISO granted under
this Plan shall include such provisions and conditions as are necessary to
qualify the Option as an "incentive stock option" within the meaning of Section
422 of the Code.

                  6.1.10 Determination of Value. For purposes of the Plan, the
fair market value of Shares or other securities of the Company shall be
determined as follows:

                           (a) Fair market value shall be the closing price of
such stock on the date before the date the value
is to be determined on the principal recognized securities exchange or
recognized securities market on which such stock is reported, but if selling
prices are not reported, its fair market value shall be the mean between the
high bid and low asked prices for such stock on the date before the date the
value is to be determined (or if there are no quoted prices for such date, then
for the last preceding business day on which there were quoted prices).

                           (b) In the absence of an established market for the
stock, the fair market value thereof shall be
determined in good faith by the Administrator, with reference to the Company's
net worth, prospective earning power, dividend-paying capacity, and other
relevant factors, including the goodwill of the Company, the economic outlook in
the Company's industry, the Company's position in the industry, the Company's
management, and the values of stock of other corporations in the same or similar
line of business.

                  6.1.11 Option Term. Subject to Section 6.3.4, no Option shall
be exercisable more than 10 years after the date of grant, or such lesser period
of time as is set forth in the stock option agreement (the end of the maximum
exercise period stated in the stock option agreement is referred to in this Plan
as the "Expiration Date").

         6.2 Terms and Conditions to Which Only NQSOs Are Subject. Options
granted under this Plan which are designated as NQSOs shall be subject to the
following terms and conditions:

                  6.2.1    Exercise Price.

         (a) Except as set forth in Section 6.2.1(b), the exercise price of an
NQSO shall be not less than 85% of the fair market value (determined in
accordance with Section 6.1.10) of the stock subject to the Option on the date
of grant.

                           (b) To the extent required by applicable laws, rules
and regulations, the exercise price of a NQSO
granted to any person who owns, directly or by attribution under the Code
(currently Section 424(d)), stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any Affiliate
(a "Ten Percent Shareholder") shall in no event be less than 110% of the fair
market value (determined in accordance with Section 6.1.10) of the stock covered
by the Option at the time the Option is granted.

         6.3 Terms and Conditions to Which Only ISOs Are Subject. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:

                  6.3.1    Exercise Price.

                                      -5-
<PAGE>

                           (a) Except as set forth in Section 6.3.1(b), the
exercise price of an ISO shall be determined in
accordance with the applicable provisions of the Code and shall in no event be
less than the fair market value (determined in accordance with Section 6.1.10)
of the stock covered by the Option at the time the Option is granted.

                           (b) The exercise price of an ISO granted to any Ten
Percent Shareholder shall in no event be less than
110% of the fair market value (determined in accordance with Section 6.1.10) of
the stock covered by the Option at the time the Option is granted.

                  6.3.2 Disqualifying Dispositions. If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of in a
"disqualifying disposition" within the meaning of Section 422 of the Code (a
disposition within two years from the date of grant of the Option or within one
year after the transfer such stock on exercise of the Option), the holder of the
stock immediately before the disposition shall promptly notify the Company in
writing of the date and terms of the disposition and shall provide such other
information regarding the Option as the Company may reasonably require.

                  6.3.3 Grant Date. If an ISO is granted in anticipation of
employment as provided in Section 5(d), the Option shall be deemed granted,
without further approval, on the date the grantee assumes the employment
relationship forming the basis for such grant, and, in addition, satisfies all
requirements of this Plan for Options granted on that date.

                  6.3.4 Term. Notwithstanding Section 6.1.11, no ISO granted to
any Ten Percent Shareholder shall be exercisable more than five years after the
date of grant.

7. MANNER OF EXERCISE

         (a) An optionee wishing to exercise an Option shall give written notice
to the Company at its principal executive office, to the attention of the
officer of the Company designated by the Administrator, accompanied by payment
of the exercise price and withholding taxes as provided in Sections 6.1.6 and
6.1.8. The date the Company receives written notice of an exercise hereunder
accompanied by payment of the exercise price will be considered as the date such
Option was exercised.

         (b) Promptly after receipt of written notice of exercise of an Option
and the payments called for by Section 7(a), the Company shall, without stock
issue or transfer taxes to the optionee or other person entitled to exercise the
Option, deliver to the optionee or such other person a certificate or
certificates for the requisite number of shares of stock. An optionee or
permitted transferee of the Option shall not have any privileges as a
shareholder with respect to any shares of stock covered by the Option until the
date of issuance (as evidenced by the appropriate entry on the books of the
Company or a duly authorized transfer agent) of such shares.

8. EMPLOYMENT OR CONSULTING RELATIONSHIP

         Nothing in this Plan or any Option granted hereunder shall interfere
with or limit in any way the right of the Company or of any of its Affiliates to
terminate any optionee's employment or consulting at any time, nor confer upon
any optionee any right to continue in the employ of, or consult with, the
Company or any of its Affiliates.

                                      -6-
<PAGE>

9. CONDITIONS UPON ISSUANCE OF SHARES

         Shares shall not be issued pursuant to the exercise of an Option unless
the exercise of such Option and the issuance and delivery of such shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended (the "Securities
Act").

10. NON-EXCLUSIVITY OF THE PLAN

         The adoption of the Plan shall not be construed as creating any
limitations on the power of the Company to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options other than under the Plan.

11. AMENDMENTS TO PLAN

         The Board may at any time amend, alter, suspend or discontinue this
Plan. Without the consent of an optionee, no amendment, alteration, suspension
or discontinuance may adversely affect outstanding Options except to conform
this Plan and ISOs granted under this Plan to the requirements of federal or
other tax laws relating to incentive stock options. No amendment, alteration,
suspension or discontinuance shall require shareholder approval unless (a)
shareholder approval is required to preserve incentive stock option treatment
for federal income tax purposes or (b) the Board otherwise concludes that
shareholder approval is advisable.

12. EFFECTIVE DATE OF PLAN; TERMINATION

         This Plan shall become effective upon adoption by the Board; provided,
however, that no Option shall be exercisable unless and until written consent of
the shareholders of the Company, or approval of shareholders of the Company
voting at a validly called shareholders' meeting, is obtained within twelve
months after adoption by the Board. If such shareholder approval is not obtained
within such time, Options granted hereunder shall be of the same force and
effect as if such approval was obtained except that all ISOs granted hereunder
shall be treated as NQSOs. Options may be granted and exercised under this Plan
only after there has been compliance with all applicable federal and state
securities laws. This Plan shall terminate within ten years from the date of its
adoption by the Board.

                                      -7-

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