EQUIPMENT LEASE AGREEMENT

         This Lease Agreement is made and entered into at Logan,  Utah effective
the  1st  day of  December,  1999,  by and  between  PVC,  Incorporated,  a Utah
corporation with principal offices in Logan, Utah  (hereinafter  "Lessor"),  and
NACO INDUSTRIES,  INC., a Utah corporation with principal offices in Logan, Utah
(hereinafter "Lessee").

         l.  LEASE.Lessor hereby leases to Lessee, and the Lessee rents from the
Lessor, all of that certain personal property and equipment described in Exhibit
"A", which is attached hereto and incorporated by this reference as though fully
set forth herein (hereinafter the "Equipment").

         2.  TERM. This  lease  shall  continue  for the term of five (5) years,
commencing on December 1, 1999 and continuing  thereafter  through  November 30,
2004, or until earlier  terminated  as set forth herein.  However,  in the event
that Lessee shall notify Lessor in writing of its intention to renew this lease,
which  notice  must be  given  not  less  than  ninety  (90)  days  prior to the
expiration  of the initial term hereof,  then this lease shall be renewed  under
the same terms as set forth  herein,  including  the annual  adjustments  of the
rentals hereunder, for an additional period of sixty (60) months.

         3.  RENTAL. Rental payments shall become due and payable hereunder on a
monthly basis, payable in advance, commencing on the first day of December, 1999
and continuing on the first day of each month thereafter until November 1, 2004,
when the last of such monthly  rental  payments shall be paid.  Rental  payments
shall  initially  commence at the rate of $9,500.00  per month;  and,  upon each
annual  anniversary date of this lease  agreement,  the monthly rentals shall be
adjusted  by the amount of any  increase  in the  Consumer  Price Index over the
immediately



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preceding year. Rentals shall be payable to the Lessor at its office, or to such
person or at such other place as the Lessor may from time to time  designate  in
writing.

         4.  SELECTION OF  EQUIPMENT.  The Lessee has selected and inspected the
Equipment and accepts the Equipment AS IS, in its present condition.

         THE  LESSOR  MAKES NO  WARRANTY,  DIRECTLY  OR  INDIRECTLY,  EXPRESS OR
         IMPLIED, AS TO THE EQUIPMENT OR ANY PART THEREOF, AS TO ITS DURABILITY,
         CONDITION,  MERCHANTABILITY,  OR  FITNESS  FOR ANY  PARTICULAR  PURPOSE
         EXCEPT  THAT  THE  LESSOR  WARRANTS  THAT  IT HAS  TITLE  TO OR  PROPER
         AUTHORIZATION TO LEASE EACH ITEM OF EQUIPMENT AS OF THE DATE HEREOF.

         The  parties  agree  that  the  Lessee  may from  time to time  wish to
replace,  or add to, the Equipment  leased  hereunder.  Any such  replacement or
addition  shall  occur  only upon the prior  written  agreement  of the  parties
hereto,  and the  amount  of the  monthly  rental  payments  shall be  increased
accordingly,  pursuant to the mutual agreement of the parties hereto. Consent to
make such replacements or additions, however, shall not be unreasonably withheld
by Lessor.

         5.  CREDIT AND  FINANCIAL  INFORMATION.  The Lessee  warrants  that all
credit and  financial  information  submitted  to the Lessor  herewith or at any
other time  during the term of this lease is true and correct in all details and
complete  for the  purpose of inducing  the Lessor to enter into this lease,  or
consent to the addition or replacement of Equipment.

         6.  LESSEE'S INSPECTION AND ACCEPTANCE. Lessee acknowledges  receipt of
the Equipment in good  condition and working  order and as  satisfactory  in all
respects for the purpose of this lease.


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         7.  INSTALLMENT,  MAINTENANCE  AND  REPAIR.  Neither the Lessor nor its
assignee shall have any obligation to install,  erect,  test, adjust, or service
the equipment. The Lessee, at its own cost and expense shall:

                  (a) Pay all charges in  connection  with the  maintenance  and
operation of the equipment;

                  (b)   Comply   with   all   laws,   ordinances,   regulations,
requirements,  and rules with respect to the use, maintenance,  and operation of
the equipment;

                  (c) Take good and proper  care of the  equipment  and make all
repairs and replacements necessary to maintain, preserve, and keep the equipment
in good condition and working order.  The Lessee shall not make any alterations,
additions, or improvements to the equipment without the prior written consent of
the  Lessor.  All  repairs,  replacements,   parts,  devices,  accessories,  and
improvements of whatsoever kind or nature  furnished or affixed to the equipment
shall belong to and become part of the property of the Lessor.

         8.  INSURANCE AND INDEMNITY.The Lessee assumes the entire risk of loss,
theft, or damage to the equipment,  whether or not covered by insurance,  and no
such  loss,  theft,  or damage  shall  relieve  the  Lessee  of its  obligations
hereunder  except as set forth in  paragraph  12. The Lessee  agrees to and does
hereby  indemnify and hold the Lessor harmless of, from, and against all claims,
costs, expenses, damages, and liabilities,  including reasonable attorney's fees
resulting  from or incident to the use,  operation,  or storage of the equipment
during the term of this  lease.  While the  equipment  is in the  possession  or
control of the Lessee,  the Lessee agrees, at its own cost and expense,  to keep
the equipment insured to protect all interests of the lessor,  against all risks
of loss, theft, or damage from every cause whatsoever for not less than the then



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current value of the equipment and in addition  shall  purchase  insurance in an
amount  reasonable under the  circumstances to cover the liability of the Lessor
for public  liability  and  property  damage.  The  Lessor  shall be named as an
insured in all such  policies and as loss payee  thereunder.  Each insurer shall
agree by endorsement upon the policy or policies issued by it, that it will give
the Lessor 30 days prior written  notice of the effective date of any alteration
or cancellation.  The proceeds of such insurance,  whether  resulting from loss,
theft,  or damage or return  premium or otherwise,  shall be applied  toward the
replacement or repair of the equipment or the payment of the  obligations of the
Lessee  hereunder at the option of the Lessor.  The Lessee  hereby  appoints the
Lessor as Lessee's  attorney-in-fact  to make claim for, receive payment of, and
execute or endorse all documents, checks, or drafts for loss or damage or return
premium under any insurance policy issued on the equipment.

         9. LOSS, THEFT OR DAMAGE. In the event of loss, theft, or damage to the
equipment in whole or in part,  the Lessee  shall  promptly so notify the Lessor
and, at the Lessor's option shall:

                  (a) Place such  equipment in good condition and working order;
or

                  (b) Replace  such  equipment  with  like   equipment  in  good
condition and working order and furnish the Lessor with  necessary  documents to
vest good and marketable title thereto in the Lessor; or

                  (c) If the Lessor  determines  that any item of  equipment  is
beyond repair, pay to the Lessor, within ten days of such notification, the loss
value thereof which shall be an amount equal to the sum of:


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                           (1) All rents and other  amounts  due and owing under
this lease thereon at the time of such payment; plus;

                           (2) The sum of the rents and other  amounts to become
payable for same during the balance of the lease, plus;

                           (3) The reversionary  value of such item of equipment
at the end of the lease had such loss not occurred.  Upon such payment the lease
shall terminate with respect to the item of equipment so paid for and the Lessee
shall thereupon become the owner thereof.

         10. OWNERSHIP.  The equipment shall at all times remain the property of
the Lessor and the Lessee shall have no right or property  interest  therein but
only the right to use the same under this lease. The Lessor shall have the right
to display  notice of its ownership by affixing to the equipment an  identifying
plate, stencil, or other indicia of ownership. Nevertheless, in order to protect
the interest of the Lessor, Lessee agrees to execute UCC-1 Forms as a protective
measure, conferring a Security Interest in the Equipment to Lessor.

         11. PERSONAL PROPERTY. The equipment shall at all times remain personal
property  regardless  of the manner  affixed  to the  realty.  The Lessee  shall
maintain  each item so that it may be removed  from any  building in which it is
placed without damaging such building.

         12. USE, LOCATION,  REMOVAL AND INSPECTION. The equipment shall be used
only in the  lawful  business  of the Lessee and  located at  Lessee's  place of
business as approved by Lessor.  The Lessee,  without the written consent of the
Lessor,  shall  not  remove  the  equipment  from  such  location  nor part with
possession or control thereof.  The Lessor,  upon prior reasonable notice to the
Lessee, shall have the right to inspect the equipment during the Lessee's normal
business hours.


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         13. TAXES AND LICENSES.  The Lessee shall pay all taxes,  license fees,
and assessments,  levied on the equipment,  or relating to this lease, exclusive
of franchise  taxes and taxes  measured by the income of the Lessor.  The Lessee
shall file all  returns  required  therefor  and furnish  copies  thereof to the
Lessor.  The Lessor will  cooperate  with the Lessee and furnish the Lessee with
any  information  available  to the  Lessor  in  connection  with  the  Lessee's
obligations under this paragraph.

         14. LESSOR'S  PAYMENT.   In the case of the  failure  of the  Lessee to
procure or  maintain  the  required  insurance,  pay  taxes,  license  fees,  or
assessments  as required or to keep the equipment in good  condition and working
order as hereinbefore  specified,  the Lessor shall have the right,  but not the
obligation  to  effect  such  insurance,  pay  such  taxes,  license  fees,  and
assessments  and keep the equipment in good condition and working order,  as the
case may be. In such event,  the costs  thereof shall be repayable by the Lessee
to the Lessor  with the next  installment  of rent,  and  failure to do so shall
carry the same  consequence  as failure to pay any  installment of rent when due
hereunder.

         15. LATE  CHARGES.   Should the Lessee  fail to pay any rental or other
charges  provided for in this lease when due,  there shall be imposed a late fee
of 5% of such late payment,  and such payment and late fee shall thereafter bear
interest at 1 1/2% per month (18 month per annum).



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         16. ENCUMBRANCES. Lessee shall keep the equipment free and clear of all
levies, liens and encumbrances.

         17. RETURN OF EQUIPMENT,  REPOSSESSION.  Upon termination of this lease
for any reason,  the  Lessee,  at its own  expense,  will  forthwith  return the
equipment to the Lessor at Lessor's  property in Logan,  Utah. Should the Lessee
fail or refuse to so return and deliver the equipment, the Lessor shall have the
right without notice or demand, to enter the premises where the equipment may be
found and take possession of and remove any equipment without legal process. The
Lessee  hereby  releases any claim or right of action for trespass  arising from
such entry or removal. The equipment, upon its return, will be in good condition
and working order.

         18. ASSIGNMENT.  Without the Lessor's prior written consent, the Lessee
shall not assign, transfer,  pledge,  hypothecate,  or otherwise dispose of this
lease or any interest therein or sublet or lend the equipment or permit it to be
used by anyone other than the Lessee and Lessee's employees.

         19. DEFAULT. Any of the following events or conditions shall constitute
a default of the Lessee under this lease:

                  (a) Default  in the  payment  of rent or  any  other  sums due
hereunder for a period of ten days after the same becomes due;

                  (b) Any  other  breach of the  terms  and  conditions  of this
lease;

                  (c) If any writ or order of  attachment,  execution,  or other
legal  action  against  the  Lessee is levied  on any or all  equipment  and not
released or satisfied within ten days;

                  (d) Death  or  judicial   incompetency  of  the  Lessee  if an
individual;


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                  (e) The   institution   of  a   proceeding   in    bankruptcy,
receivership,  or insolvency against the Lessee or its property or if the Lessee
shall enter into an agreement or composition with its creditors;

                  (f) The occurrence of any event described in subdivisions  (d)
or (e) of this paragraph with respect to any guarantor of the Lessee;

                  (g) If any certificate, statement, representation, or warranty
furnished by the Lessee or any of the Lessee's  guarantors proves to be false in
any material respect; or

                  (h) If the  condition  of the  affairs of the Lessee or any of
the  Lessee's  guarantors  shall so  change as to,  in the sole  opinion  of the
Lessor, impair the Lessor's security or increase the credit risk involved.

         20. REMEDIES.   Upon the happening of any event of default as set forth
in  paragraph  19, the Lessor shall have the right to do the  following  without
demand or notice of any kind:  (a) Declare  due,  sue for,  and receive from the
Lessee  the sum of all rents and other  amounts  due and owing  under this lease
plus the sum of the rents and other amounts to become payable during the balance
of the term of this lease;

                  (b) Retake  possession  of any and all  equipment  without any
court order or other process of law. For such purpose, the Lessor may enter upon
any  premises  where such  equipment  is located  and remove the same  therefrom
without being liable to any suit,  action,  or other  proceedings by the Lessee.
The Lessor may, at its option,  sell the equipment at public or private sale for
cash or on credit and by itself  become the  purchaser at such sale.  The Lessee
shall be liable for arrears of rent, if any, the expense of retaking possession,
and the removal of the equipment, court costs, in addition to the balance of the


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rentals provided for herein, or in any renewal hereof,  less the net proceeds of
the sale of the equipment, if any, after deducting all costs of taking, storage,
repair and sale and reasonable attorney's fees.

         THE  LESSEE  WAIVES  ANY AND ALL  RIGHTS  TO NOTICE  AND TO A  JUDICIAL
         HEARING  WITH  RESPECT  TO THE  REPOSSESSION  OF THE  EQUIPMENT  BY THE
         LESSOR.

                  (c) Terminate this lease as to any or all equipment.

                  (d) Terminate  any other lease  between the Lessor and Lessee;
or

                  (e) Pursue any other remedy at law or in equity.

         21. CONCURRENT  REMEDIES.   The  rights  granted  to the  Lessor  under
paragraph  20 shall be  cumulative  and  action  on one  shall  not be deemed to
constitute  an  election or waiver of any other right to which the Lessor may be
entitled.  The Lessee waives trial by jury in any action or  proceeding  arising
hereunder.

         22. NOTICE AND WAIVERS.  All notices relating hereto shall be delivered
in person to an officer of the Lessor or Lessee or shall be mailed  certified or
registered to the Lessor or Lessee at their respective addresses or at any other
address  hereinafter  furnished by notice  given in like  manner.  A waiver of a
specific  default shall not be a waiver of any other or subsequent  default.  No
waiver by the Lessor or any provisions  hereof shall  constitute a waiver of any
other  matter and all waivers  shall be in writing and executed by an officer of
the Lessor.  No failure on the part of the Lessor to  exercise,  and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof.



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         23. ENTIRE AGREEMENT.  This instrument constitutes the entire agreement
between  the  parties  and may not be  modified  except by a written  instrument
signed by the parties.  Any  representation  or statement  made by the Lessor or
Lessee not stated herein shall not be binding.

         24. ADDITIONAL  DOCUMENTS.   At the request of the  Lessor,  the Lessee
shall execute and deliver to the Lessor such  documents as the Lessor shall deem
necessary or desirable for the purpose of recording or filing.

         25. MISCELLANEOUS.   Any provision of this instrument prohibited by law
in any state  shall,  as to such  state,  be  ineffective  to the extent of such
prohibition  without  invalidating the remaining  provisions of this instrument.
This  instrument  shall be governed and construed in accordance with the laws of
the State of Utah.

         IN WITNESS  WEHREOF,  the parties hereto have set their hands as of the
date and year first set forth above.

                               LESSOR:

                               PVC, Inc.

                               By
                               Title:


                               LESSEE:
                               NACO INDUSTRIES, Inc.


                               By
                               Title:






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                                  EXHIBIT "A"

            List of Personal property and Equipment Subject to Lease




   Quantity                                      Description

1       Steel Racks
1       Spark Resistant Fan
1       Hydraulic Unit 7.5 HP
1       Horizontal Beller
1       Valve Threader - Hydraulic
1       Power Transmission Promission Products 45" Elbow Machine Model 1878
1       24" Press and Beller Model 24, Ser. #88-27
2       Puller and Beller Machines
1       Mandrell Rack
1       12" Disc Sander
1       Ring Saw and Rack Model P, Ser. #6192-04
1       Drill Press
1       Grazino Engine Lathe 24" x 80" Model SAG508 Ser. #7896
1       Gorton Mill 3HP Model 1-22, Ser. #39277
1       Storage Cabinet
1       Ace Welding Torch
1       Automatic Gasket Cavity Machine and Assoc.Tooling Model 387, Ser # 4
1       Automatic Glycerine Tank
1       Pressure Test Tank and Associated Tooling
1       Marvel Series B Band Saw, Ser. #89056
1       Abrasine Saw and Table
12      End Cap Ring
1       Auto Router Table and Plates
1       Automatic Electric Glycerine Tank
6       PIP Belling Mandrells Solvent Weld
6       IPS Belling Mandrells Solvent Weld
4       Sewer Belling Mandrells Solvent Weld
6       PIP Reducing Flanges
5       IPS Reducing Flanges
6       Sewer Reducing Flanges
6       PIP Pulling Mandrells
6       IPS Pulling Mandrells
6       PIP Stripper Plates Solvent Weld
6       IPS Stripper Plates Solvent Weld
4       Sewer Stripper Plates Solvent Weld
1       Automatic (Air) Riser Machine
1       Valve Top Starter and Table
1       Belt Sander 18"
1       2 Wheel Trailer
5       Gasket Belling Mandrells PIP
5       PIP Gasket Forming Rings
5       Gasket Belling Mandrells IPS
5       IPS Forming Rings
5       Gasket Belling Mandrells Sewer
5       Sewer Gasket Forming Rings
1       Electric Welder and Equipment
1       Bolted Coupling Flange Molds 6 - 15 Perm
1       Mill Knodra Trpe FU-300 X-955
1       Whacheon Lathe Model HL-A60 Ser. #222143
1       Bullard 42" Boring Machine Ser. #16822
1       Ellis Mitre Saw Ser. #16936579
1       Hydralic Tracer Model TR100 Ser. #2383-DE
1       Air Compressor 5 Horse
1       Glue Clamp Tee - Double Bay
1       Glycerin Tank - Manual 15" Capacity
1       Welder - Lincoln Arc Mig
1       Welding Lincoln Stick
1       Glycerin Tank
1       Elbow Machine
1       Clausing / Kondia Milling Machine
1       Cincinnati Milacron Sabre 1250
1       Kent KGS-510AHD Precision Grinding Machine
1       Kent KGS-616M Precision Grinding Machine
1       DeVlieg Jig Mill Model 4B-60
1       Charmiles
1       Cincinnati Bichford Radial Arm Drill
1       Delectrode Drill
1       PCB IF1 Actuator w/depth stop 1-80
1       Power Shape Software
1       Computers
1       CadKey with fast Solid-Eckman Technologies
1       Mastercom 7.0 - Mill Level 3