<PAGE>
 
                      GRANDCHILDREN'S REALTY ALTERNATIVE
                   MANAGEMENT PROGRAM I LIMITED PARTNERSHIP
                            c/o Time Masters, Inc.
                                6425 Beach Road
                        Eden Prairie, Minnesota  55344
                             Phone (612) 943-3334
                              Fax (612) 942-8911


                                October 4, 1996


LaserMaster Corporation
Attn: Michael Knight, Esq.
General Counsel
7156 Shady Oak Road
Eden Prairie, Minnesota  55344

     Re:  Amended and Restated Lease Agreement dated as of December 31, 1995 by
          and between Grandchildren's Realty Alternative Management Program I
          Limited Partnership and LaserMaster Corporation (the "LEASE")
          (capitalized terms utilized in this correspondence shall have the
          meanings ascribed to them in the Lease unless separately defined
          herein)

Gentlemen:

     The purpose of this correspondence is to reduce to writing the agreements
between Landlord and Tenant to amend the Lease. Set forth below is an outline of
such agreements, which shall constitute an amendment to the Lease:

     1.   Lease Term shall mean the period from the Commencement Date through
and including December 31, 2010.

     2.   Commencing on October 1, 1996 with respect to each installment the
Base Rent due under the Lease through and including the installment of Base Rent
due on October 1, 2001, Tenant shall pay to Landlord an additional monthly
amount of $7,000 (the "RENOVATION INSTALLMENT").

     3.   Provided no Event of Default has occurred and is continuing, Landlord
shall, to the extent of the first $315,000 of Renovation Installments at its
sole cost and expense and not as an Operating Expense, complete the Renovation
Work prior to January 1, 1998 on a lien free basis, using duly licensed and
qualified contractors, in accordance with all Legal Requirements, in a good and
workmanlike manner, pursuant to plans and specifications reasonably approved by
Tenant within thirty (30) days following receipt thereof by Tenant from
Landlord, and with minimal interference with the operations of Tenant at the
Project. In connection with the performance by Landlord of the Renovation Work,
Tenant shall act
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LaserMaster Corporation
October 4, 1996
Page 2


reasonably and in good faith to avoid interference with Landlord's performance
of the Renovation Work.

     4.   For purposes of this Agreement the term "Renovation Work" shall mean
those items generally described on Exhibit "1" attached hereto.

     5.   LaserMaster hereby agrees to pay all filing fees and deed taxes
related to the sale/leaseback transaction on Shady View office center between
First Industrial LP and Grandchildren's Realty Alternative Management Program I
Limited Partnership. The deed tax is approximately $24,585.00 and payable to
Hennepin County.

     6.   Except as hereby amended, the Lease remains unmodified and in full
force and effect.

     If the foregoing accurately reflects our agreement, please so indicate by
executing the enclosed copy of this correspondence and return the same to the
undersigned.

     Should you have any questions, please do not hesitate to contact the
undersigned.

                              Very truly yours,

                              GRANDCHILDREN'S REALTY ALTERNATIVE 
                              MANAGEMENT PROGRAM I LIMITED 
                              PARTNERSHIP

                              By TimeMasters, Inc.
                              Its General Partner



                              By /s/ Melvin L. Masters
                                -----------------------------------
                                 Melvin L. Masters
                                 Its President

Agreed and accepted as of
the date first set forth above.

LASERMASTER CORPORATION



By_________________________
   Its_____________________