<PAGE>

                                                                   EXHIBIT 10.47

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                 MASTER EQUIPMENT LEASE AND SECURITY AGREEMENT

                         Dated as of November 15, 1996

                                    between

                            MAIL-WELL I CORPORATION
                            as the Lessee or Debtor

                                      and

                           PARIBAS PROPERTIES, INC.
                        as the Lessor or Secured Party.




================================================================================

This Master Equipment Lease and Security Agreement has been executed in several
counterparts.  To the extent, if any, that this Master Equipment Lease and
Security Agreement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no lien on
this Master Equipment Lease and Security Agreement may be created through the
transfer or possession of any counterpart other than the original counterpart
containing the receipt therefor executed by Lessor on or following the signature
page hereof.

<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------
 
                                                                            Page
                                                                            ----
ARTICLE I 
   DEFINITIONS................................................................ 2
   1.1  Definitions; Interpretation............................................2
 
ARTICLE II 
   MASTER LEASE................................................................2
   2.1  Acceptance and Lease of Equipment......................................2
   2.2  Acceptance Procedure...................................................2
   2.3  Lease Term.............................................................2
   2.4  Disclaimer of Warranties...............................................2
   2.5  Title; Ownership of Equipment; Subordination...........................3
   2.6  Appointment of the Agent...............................................4

ARTICLE III 
   PAYMENT OF RENT.............................................................5
   3.1  Rent...................................................................5
   3.2  Net Rent...............................................................6
   3.3  Supplemental Rent......................................................6
   3.4  Method of Payment......................................................6
 
ARTICLE IV 
   QUIET ENJOYMENT; RIGHT TO INSPECT...........................................7
   4.1  Quiet Enjoyment........................................................7
   4.2  Right to Inspect.......................................................7
 
ARTICLE V 
   ABSOLUTE OBLIGATIONS........................................................7
   5.1  Unconditional Net Lease................................................7
   5.2  No Termination or Abatement............................................8

ARTICLE VI 
   SUBLEASES...................................................................8
   6.1  Subletting.............................................................8
   6.2  Assignment of Subleases and Business Interruption Insurance to Lessor..9


                                      ii
<PAGE>
 
ARTICLE VII 
     LESSEE ACKNOWLEDGMENTS................................................... 9
     7.1  Condition of the Equipment.......................................... 9
     7.2  Risk of Loss........................................................10
 
ARTICLE VIII 
     POSSESSION AND USE OF THE EQUIPMENT, ETC.................................10
     8.1  Use of the Equipment................................................10
     8.2  Compliance with Requirements of Law, Equipment Insurance Legal 
          Requirements and Insurance Requirements.............................11
     8.3  Assignment by Lessee................................................11
     8.4  Permitted Users.....................................................11
     8.5  Location of Equipment...............................................11
 
ARTICLE IX 
     MAINTENANCE AND REPAIR; RETURN...........................................11
     9.1  Maintenance and Repair; Return......................................11
     9.2  Return of the Equipment.............................................12
 
ARTICLE X 
     MODIFICATIONS, ETC.......................................................13
     10.1 Modifications, Substitutions and Replacements.......................13
     
ARTICLE XI 
     PROTECTION OF TITLE BY LESSEE............................................14
     11.1 Prohibition on Liens................................................14
 
ARTICLE XII 
     PERMITTED CONTESTS.......................................................14
     12.1 Permitted Contests in Respect of Applicable Law.   
                    
                    (a)     ..................................................14

ARTICLE XIII 
     INSURANCE................................................................15
     13.1 Public Liability and Workers Compensation Insurance.................15
     13.2 Hazard and Other Insurance..........................................16
     13.3 Insurance Coverage..................................................16
 
ARTICLE XIV 
     CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS.........................17


                                      iii
<PAGE>
 
     14.1  Casualty and Condemnation..........................................17
     14.2  Environmental Matters..............................................18
     14.3  Notice of Environmental Matters....................................19

ARTICLE XV
     TERMINATION OF LEASE.....................................................19
     15.1  Partial Termination upon Certain Events............................19
     15.2  Partial Termination Procedures.....................................20

ARTICLE XVI
     EVENTS OF DEFAULT........................................................20
     16.1  Lease Events of Default............................................20
     16.2  Remedies...........................................................21
     16.3  Waiver of Certain Rights...........................................25
     16.4  Security Interest and Foreclosure..................................25

ARTICLE XVII
     LESSOR'S RIGHT TO CURE...................................................26
     17.1  The Lessor's Right to Cure the Lessee's Lease Defaults.............26

ARTICLE XVIII
     PURCHASE PROVISIONS......................................................27
     18.1  Option to Purchase all of the Equipment............................27
     18.2  Expiration Date Purchase Obligation................................27
     18.3  Acceleration of Purchase Obligation................................27

ARTICLE XIX
     INDEMNITIES..............................................................28
     19.1  General Indemnity..................................................28
     19.2  Impositions........................................................29

ARTICLE XX
     REMARKETING OPTION.......................................................30
     20.1  Option to Remarket.................................................30
     20.2  Certain Obligations Continue.......................................32

ARTICLE XXI
     PROCEDURES RELATING TO PURCHASE OR REMARKETING...........................33

                                      iv
<PAGE>

     21.1  Provisions Relating to the Exercise of Purchase Option or
           Obligation and Conveyance Upon Remarketing and Conveyance Upon
           Certain Other Events...............................................33

ARTICLE XXII
     ESTOPPEL CERTIFICATES....................................................34
     22.1  Estoppel Certificates..............................................34


ARTICLE XXIII
     ACCEPTANCE OF SURRENDER..................................................35
     23.1  Acceptance of Surrender............................................35

ARTICLE XXIV
     NO MERGER OF TITLE.......................................................35
     24.1  No Merger of Title.................................................35

ARTICLE XXV
     INTENT OF THE PARTIES....................................................35
     25.1  Ownership of the Equipment.........................................35

ARTICLE XXVI
     MISCELLANEOUS............................................................36
     26.1  Survival; Severability; Etc........................................36
     26.2  Amendments and Modifications.......................................36
     26.3  No Waiver..........................................................36
     26.4  Notices............................................................36
     26.5  Successors and Assigns.............................................36
     26.6  Headings and Table of Contents.....................................36
     26.7  Counterparts.......................................................36
     26.8  GOVERNING LAW......................................................36
     26.9  Limitations on Recourse............................................37
     26.10 Original Lease.....................................................37

List of Exhibits:
---------------- 
EXHIBIT "A"        Description of the Equipment
EXHIBIT "B"             Insurance Coverage Requirements and Allocation of
                   Equipment Balance to Each Item of the Equipment

                                       v
<PAGE>
 
                 MASTER EQUIPMENT LEASE AND SECURITY AGREEMENT

   THIS MASTER EQUIPMENT LEASE AND SECURITY AGREEMENT (this "Master Lease"),
                                                             ------------   
dated as of November 15, 1996, between PARIBAS PROPERTIES, INC., a Delaware
corporation, having its principal office at 1200 Smith Street, Suite 3100,
Houston, Texas 77002, as the Lessor and as Secured Party, and MAIL-WELL I
CORPORATION, a Delaware corporation, having a principal office at 23 Inverness
Way East, Englewood, CO 80112, Attn:  Mr. Paul Reilly, as Lessee and as Debtor.

                             W I T N E S S E T H:
                             ------------------- 

                                   Recitals
                                   --------

     A.   Pursuant to that certain Participation Agreement dated as of the date
hereof (as amended, modified, restated or supplemented from time to time, the
"Participation Agreement"), entered into by and among the Lessee, the various
------------------------                                                     
Subsidiaries of the Lessee as are or may from time to time become parties
thereto as Subsidiary Guarantors (the "Subsidiary Guarantors"), Lessor, the
                                       ---------------------               
financial institution or institutions (the "Equity Lenders") who are parties
                                            --------------                  
thereto as Equity Lenders, the financial institutions (the "Financing Lenders")
                                                            -----------------  
who are parties thereto as Financing Lenders, and Banque Paribas, Houston
Agency, as agent (in such capacity, the "Agent") for the Financing Lenders and
                                         -----                                
the Equity Lenders (collectively referred to as the "Lender" or "Lenders," as
                                                     ------      -------     
the case may be), have agreed to finance the Lessor's acquisition of the
Equipment (as hereinafter defined).

     B.   On the Effective Date, the Lessor will purchase certain envelope and
commercial printing equipment from the Lessee (all such items of equipment being
called the "Equipment").  Each item of the Equipment is more particularly
            ---------                                                    
described on the Equipment Schedule attached hereto as Exhibit "A" and made a
                                                       -----------           
part hereof for all purposes (the "Equipment Schedule").
                                   ------------------   

     C.   The Lessor desires to lease to the Lessee, and the Lessee desires to
lease from the Lessor, the Equipment.

                                   Agreement
                                   ---------

     NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

<PAGE>
 
                                   ARTICLE I
                                  DEFINITIONS

     1.1 Definitions; Interpretation.  Capitalized terms used but not otherwise
         ---------------------------                                           
defined in this Master Lease have the respective meanings specified in Appendix
                                                                       --------
A to this Master Lease; and the rules of interpretation set forth in Appendix A
-                                                                    ----------
to this Master Lease shall apply to this Master Lease.

                                  ARTICLE II
                                 MASTER LEASE

     2.1 Acceptance and Lease of Equipment.  The Lessor hereby leases to the
         ---------------------------------                                  
Lessee for the Lease Term (as hereinafter defined), the Equipment, and the
Lessee hereby leases from the Lessor for the Lease Term, the Lessor's interest
in the Equipment, together with any accessories, replacements and substitutions
therefor which may be made by the Lessee pursuant to the terms of this Master
Lease.  The Lessee shall have the right from time to time to release items of
the Equipment and to substitute items of other equipment strictly in accordance
with the provisions of Section 6.3 of the Participation Agreement.  Each such
                       -----------                                           
substitution shall be subject to the approval of the Agent, which approval may
be withheld in its sole discretion.

     2.2 Acceptance Procedure.  The Lessee hereby irrevocably accepts all of
         --------------------                                               
the Equipment for all purposes of this Master Lease and the other Operative
Documents on the terms set forth therein and herein, and agrees that all of the
Equipment shall be deemed to be included in the leasehold estate of this Master
Lease and shall be subject to the terms and conditions of this Master Lease as
of the Effective Date.

     2.3 Lease Term.  The term of this Master Lease shall commence on the date
         ----------                                                           
hereof and shall expire on the Expiration Date (the "Lease Term"), unless the
                                                     ----------              
Lease Term is earlier terminated in accordance with the provisions of this
Master Lease or the Operative Documents.

     2.4 DISCLAIMER OF WARRANTIES.
         ------------------------ 

         (a)   THE LESSOR LEASES THE EQUIPMENT TO THE LESSEE "AS-IS", "WHERE-
     IS", WITH ALL FAULTS, AND IN WHATEVER CONDITION IT MAY BE. THE LESSEE
     ACKNOWLEDGES THAT THE LESSOR IS NOT A SELLER (AS SUCH TERM IS DEFINED IN
     ANY APPLICABLE UNIFORM COMMERCIAL CODE), NOR A SELLER'S AGENT, AND THE
     LESSOR DOES NOT MAKE AND HAS NOT MADE, AND IT SHALL NOT BE DEEMED TO MAKE
     OR HAVE MADE, ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
     TO (1) THE DESIGN, OPERATION OR CONDITION OF, OR THE QUALITY OF THE
     MATERIAL, EQUIPMENT OR

                                       2
<PAGE>
 
     WORKMANSHIP IN, THE EQUIPMENT, (2) THE MERCHANTABILITY OR FITNESS OF THE
                                        -------------------------------------
     EQUIPMENT FOR ANY PARTICULAR PURPOSE, (3) THE TITLE TO THE EQUIPMENT OR ANY
     -------------------------------------
     COMPONENT THEREOF, (4) COMPLIANCE WITH SPECIFICATIONS OR APPLICABLE LAW,
     (5) THE ABSENCE OF LATENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE),
     (6) THE ABSENCE OF INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, (7)
     THE ABSENCE OF ANY OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR (8)
     ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
     ANY OF THE EQUIPMENT, EITHER UPON DELIVERY THEREOF TO LESSEE OR OTHERWISE,
     IT BEING AGREED THAT ALL RISKS, IF ANY, AS BETWEEN THE LESSOR AND THE
     LESSEE, ARE TO BE BORNE BY THE LESSEE.

         (b)   THE LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY TO THE
     LESSEE OR ANY OTHER PERSON WITH RESPECT TO ANY OF THE FOLLOWING (I) ANY
     LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR
     INDIRECTLY BY ANY EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR
     DEFECT THEREIN, OR ANY MATERIALS (INCLUDING, WITHOUT LIMITATION, ANY
     SUBSTANCES DEEMED TO BE HAZARDOUS UNDER APPLICABLE LAW) AT ANY TIME
     CONTAINED THEREIN OR REMOVED OR ESCAPING THEREFROM, OR BY ANY OTHER
     CIRCUMSTANCES IN CONNECTION THEREWITH; (II) THE USE, OPERATION OR
     PERFORMANCE OF ANY EQUIPMENT OR ANY RISKS RELATING THERETO; (III) ANY
     INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR
     CONSEQUENTIAL DAMAGES; OR (IV) THE DELIVERY, OPERATION, SERVICING,
     MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF ANY OF THE EQUIPMENT.
     THE LESSEE ACKNOWLEDGES THAT THE EQUIPMENT IS IN ALL THE FOREGOING RESPECTS
     SATISFACTORY TO THE LESSEE, AND THE LESSEE WILL NOT ASSERT ANY CLAIM OF ANY
     NATURE WHATSOEVER AGAINST THE LESSOR BASED ON ANY OF THE FOREGOING MATTERS
     IN THIS SECTION 2.4.  SUBJECT TO THE LESSOR'S RIGHT TO DO SO, THE LESSOR
             -----------                                                     
     HEREBY ASSIGNS WITHOUT RECOURSE TO THE LESSEE FOR THE TERM OF THIS MASTER
     LEASE ANY WARRANTY WHICH HAS BEEN EXTENDED TO THE LESSOR BY THE
     MANUFACTURER OR VENDOR OF THE EQUIPMENT.  ANY AMOUNTS RECEIVED BY THE
     LESSEE AS PAYMENT UNDER ANY SUCH WARRANTY SHALL BE APPLIED TO RESTORE THE
     EQUIPMENT TO THE CONDITION REQUIRED BY THIS MASTER LEASE, WITH THE BALANCE
     OF SUCH AMOUNT, IF ANY, TO BE PAID OVER TO THE AGENT AND (TO THE EXTENT THE
     AGENT RECEIVES SUCH AMOUNTS IN GOOD COLLECTED FUNDS) APPLIED AS RENT.  THE
     LESSEE SHALL NOT TAKE ANY ACTION OR FAIL TO TAKE ANY ACTION, THE EFFECT OF
     WHICH WOULD BE TO INVALIDATE ANY SUCH WARRANTY.

     2.5 Title; Ownership of Equipment; Subordination.
         -------------------------------------------- 

     (a) The Equipment is leased to the Lessee without any representation or
warranty, express or implied by the Lessor, and is subject to the existing state
of title and all applicable requirements of law and Property legal requirements.
The Lessee shall in no event have any

                                       3
<PAGE>
 
recourse against the Lessor for any defect in or exception to title to any of
the Equipment. The parties acknowledge their express intent that this Master
Lease constitutes an operating lease for financial accounting purposes only; and
for bankruptcy and federal, state and other tax purposes, the transaction
contemplated hereby is a financing arrangement and that the Lessee is treated as
the owner of the Equipment. This Master Lease is not intended to be subject to
the provisions of Article 2A of the Uniform Commercial Code. The Lessee hereby
waives any and all rights and remedies provided to a lessee in Article 2A and
any other rights or remedies now or hereafter provided to or conferred upon it
by statute or otherwise which may limit or modify any of the Lessor's rights and
remedies under this Master Lease; provided, however, that such waiver shall not
                                  --------  -------
preclude the Lessee from asserting any claim of the Lessee against the Lessor in
a separate cause of action. Without limitation of the rights and remedies
provided by the Operative Documents and by applicable law, and in addition to
those rights and remedies, the Lessor shall have all rights and remedies of a
"secured party" under Article 9 of the Uniform Commercial Code.

     (b) This Master Lease and all rights and interests of the Lessor and the
Lessee hereunder are subject and subordinate to the security interests and
provisions of the Lessor First Security Agreement and the Lessor Second Security
Agreement.

     2.6 Appointment of the Agent.  The Lessor hereby irrevocably designates
         ------------------------                                           
and appoints the Agent as the agent for the Lessor (but for the benefit of the
Lenders) pursuant to the collateral assignment being made under the Assignment
of Lease and Rent, to take such action on its behalf under the provisions of
this Master Lease and the other Operative Documents and to exercise such powers
and perform such duties as are expressly granted to and reserved by the Lessor
thereunder, together with such other powers as are reasonably incidental
thereto.  The provisions of Article X of the Loan Agreement, with respect to the
Agent for the Lenders thereunder, are hereby fully incorporated by reference and
shall be applicable to the rights, duties and responsibilities of the Agent as
the agent for the Lessor (but for the benefit of the Lenders), including without
limitation the provisions giving to the Required Participants the right to
remove the Agent and, upon any removal or resignation of the Agent, to appoint a
Successor Agent.  Without limitation of the foregoing, all amounts of whatever
kind payable to the Lessor under or with respect to this Master Lease shall be
paid to, and collected by, the Agent as agent for the Lessor (but for the
benefit of the Lenders).  Notwithstanding any provision to the contrary
elsewhere in this Master Lease, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in any other
Operative Document, or any fiduciary relationship as to the Lessor, the Lessee
or any other party to the Operative Documents, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Master Lease or any other Operative Document.  Unless expressly
provided herein to the contrary, all rights, remedies, powers and privileges of
the Lessor hereunder shall be exercised by the Agent upon the written direction
of the Required Equity Lenders.

                                       4
<PAGE>
 
                                  ARTICLE III
                                PAYMENT OF RENT

     3.1 Rent.
         ---- 

         (a)   During the Lease Term, the Lessee shall pay Basic Rent on each
     Payment Date, on the date required under Section 20.1(k) hereof in
                                              ---------------          
     connection with the Lessee's exercise of the Remarketing Option, and on any
     date on which this Master Lease shall terminate with respect to any or all
     of the Equipment.

         (b)   Subject to the terms of the Operative Documents, Basic Rent shall
     be due and payable in lawful money of the United States and shall be paid
     on the due date therefor directly to the Agent for the pro rata account of
     the Lenders entitled to receive such payment in immediately available funds
     by wire transfer to the account of the Agent specified on Schedule IV to
                                                               -----------   
     the Participation Agreement under the heading "Wire Transfer Instructions
     for Obligors."

         (c)   All Rent and other amounts payable hereunder shall be paid
     without notice or demand by Lessee directly to the Agent and such amounts
     shall be disbursed by the Agent in accordance with the Operative Documents.
     Lessee's obligation to pay Rent shall be absolute and unconditional and not
     subject to any abatement, reduction, set-off, defense, counterclaim or
     recoupment (collectively "Abatements") for any reason whatsoever, including
                               ----------                                       
     without limitation, Abatements due to any present or future claims of
     Lessee against Lessor under this Master Lease or otherwise, or against any
     manufacturer or vendor of any of the Equipment.

         (d)   Neither the Lessee's inability or failure to take or maintain
     possession of all or any portion of any Equipment when delivered by the
     Lessor, whether or not attributable to any act or omission of the Lessee or
     any act or omission of the Lessor, or for any other reason whatsoever,
     shall delay or otherwise affect the Lessee's obligation to pay Rent for
     such Equipment in accordance with the terms of this Master Lease.

         (e)   If a court shall finally determine that Lessor has received any
     payments under this Master Lease which are determined to be interest and
     which result in interest charges to Lessee in excess of the highest
     permitted by applicable law, such payments shall be subject to, and applied
     in accordance with, the provisions of Section 13.2 of the Participation
                                           ------------                     
     Agreement.

         (f)   All amounts payable by the Lessee under this Master Lease which
     constitute interest under Applicable Laws shall be expressly subject to the
     controlling provisions of Section 13.2 of the Participation Agreement

                                       5
<PAGE>
 
     3.2 Net Rent.  All Rent shall be paid absolutely net to the Lessor, so
         --------                          ---------- ---                  
that this Master Lease shall yield to the Lessor the full amount thereof,
without set-off, prior notice, demand, deduction or reduction.  The Lessee
accordingly covenants and agrees to pay, as they become due and payable and
before they become delinquent, all Impositions, costs, expenses, fees,
liabilities, deductions and other charges whatsoever with respect to the
Equipment and the ownership, leasing, operation, maintenance, repair, and use
thereof, including without limitation the costs, charges and
assessments hereinafter set forth in this Master Lease and any obligations which
the Lessor may now or hereafter suffer or incur with respect to the Equipment,
of whatever kind or character whatsoever.

     3.3 Supplemental Rent.  The Lessee shall pay to the Lessor or the Person
         -----------------                                                   
entitled thereto any and all Supplemental Rent promptly as the same shall become
due and payable, and if the Lessee fails to pay any Supplemental Rent, the
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent.  The Lessee
shall pay to the Lessor, as Supplemental Rent, among other things, on demand, to
the extent permitted by applicable Requirements of Law, interest at the
applicable Default Rate on any installment of Basic Rent not paid when due for
the period for which the same shall be overdue and on any payment of
Supplemental Rent not paid when due or demanded by the Lessor for the period
from the due date or the date of any such demand, as the case may be, until the
same shall be paid.  The expiration or other termination of the Lessee's
obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of the Lessee with respect to Supplemental Rent.  Unless expressly
provided otherwise in this Master Lease, in the event of any failure on the part
of the Lessee to pay and discharge any Basic Rent or Supplemental Rent as and
when due, the Lessee shall also promptly pay and discharge any fine, penalty,
interest or cost which may be assessed or added under any agreement with a third
party for nonpayment or late payment of such Basic Rent or Supplemental Rent,
whether under the Operative Documents or otherwise, all of which shall also
constitute Supplemental Rent.

     3.4 Method of Payment.  Each payment of Rent shall be made by the Lessee
         -----------------                                                   
to the Agent prior to 11:00 a.m., Houston, Texas time to the Lessor's account
specified on Schedule IV to the Participation Agreement under the heading "Wire
Transfer Instructions for Obligors" in funds consisting of lawful currency of
the United States of America which shall be immediately available on the
scheduled date when such payment shall be due, unless such scheduled date shall
not be a Business Day, in which case such payment shall be made on the next
succeeding Business Day.  Payments received after 11:00 a.m., Houston, Texas
time on the date due shall for the purpose of Section 16.1 hereof, be deemed
                                              ------------                  
received on such day; provided, however, that for the purposes of the second
                      --------  -------                                     
sentence of Section 3.3 hereof, such payments shall be deemed received on the
            -----------                                                      
next succeeding Business Day and, unless the Agent is otherwise able to invest
or employ such funds on the date received, subject to interest at the Default
Rate as provided in such Section 3.3.
                         ----------- 

                                       6
<PAGE>
 
                                       7
<PAGE>
 
                                  ARTICLE IV
                       QUIET ENJOYMENT; RIGHT TO INSPECT

     4.1 Quiet Enjoyment.  Subject to Sections 2.4, 2.5 and 4.2 hereof, and
         ---------------              ------------  ---     ---            
subject to the rights of the Lessor contained in Article XVI hereof and the
                                                 -----------               
other terms of the Operative Documents to which the Lessee is a party, the
Lessee shall peaceably and quietly have, hold and enjoy the Equipment for the
Lease Term, free of any claim or other action by the Lessor or anyone claiming
by, through or under the Lessor (other than the Lessee) with respect to any
matters arising from and after the Effective Date.  Such right of quiet
enjoyment is independent of, and shall not affect the Lessor's or Agent's rights
otherwise to initiate legal action to enforce, the obligations of the Lessee
under this Master Lease.

     4.2 Right to Inspect.  During the Lease Term, the Lessee shall upon
         ----------------                                               
reasonable notice from the Lessor (except that no notice shall be required if a
Lease Event of Default has occurred and is continuing), permit the Lessor, the
Financing Lenders, the Equity Lenders and their respective authorized
representatives to inspect any of the Equipment subject to this Master Lease
during normal business hours, provided that such inspections shall not
unreasonably interfere with the Lessee's business operations.

                                   ARTICLE V
                             ABSOLUTE OBLIGATIONS

     5.1 Unconditional Net Lease.  This Master Lease shall constitute an
         -----------------------                                        
absolute and unconditional net lease.  Any present or future law to the contrary
notwithstanding, this Master Lease shall not terminate, nor shall the Lessee be
entitled to any abatement, suspension, deferment, reduction, set-off,
counterclaim, or defense with respect to the Rent, nor shall the obligations of
the Lessee hereunder be affected (except as expressly herein permitted and by
performance of the obligations in connection therewith) by reason of:  (i) any
defect in the condition, merchantability, design, construction, quality or
fitness for use of any of the Equipment or any part thereof, or the failure of
any of the Equipment to comply with all Requirements of Law and Equipment Legal
Requirements, including any inability to occupy or use any of the Equipment by
reason of such non-compliance; (ii) any damage to, loss or destruction of,
removal, abandonment, salvage, loss, contamination of or Release from, scrapping
or destruction of or any requisition or taking of, any of the Equipment or any
part thereof; (iii) any restriction, prevention or curtailment of or
interference with any use of any of the Equipment or any part thereof including
eviction; (iv) the interference with the Lessee's use of any of the Equipment by
any private person, corporation, or governmental authority, or any defect in
title to or rights to any of the Equipment or any Lien on such title or rights
or on any of the Equipment (other than Lessor Liens); (v) any change, waiver,
extension, indulgence or other action or omission or breach in respect of any
obligation or liability of or by the Lessor or any Lender; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like

                                       8
<PAGE>
 
proceedings relating to the Lessee, the Lessor, any Lender or any other Person,
or any action taken with respect to this Master Lease by any trustee or receiver
of the Lessee, the Lessor, any Lender or any other Person, or by any court, in
any such proceeding; (vii) any claim that the Lessee has or might have against
any Person, including without limitation the Lessor, any Lender, or any vendor,
manufacturer, contractor of or for any of the Equipment; (viii) any failure on
the part of the Lessor to perform or comply with any of the terms of this Master
Lease (other than performance by Lessor of its obligations set forth in Section
                                                                        -------
2.1 hereof), of any other Operative Document or of any other agreement; (ix) any
---                                                                             
invalidity or unenforceability or illegality or disaffirmance of this Master
Lease against or by the Lessee or any provision hereof or any of the other
Operative Documents or any provision of any thereof, or the invalidity or
unenforceability or lack of due authorization of this Master Lease, or any lack
of right, power or authority of the Lessee or any other party to enter into this
Master Lease; (x) the impossibility or illegality of performance by the Lessee,
the Lessor or both; (xi) any action by any court, administrative agency or other
Governmental Authority; (xii) any restriction, prevention or curtailment of or
interference with the construction on or any use of any of the Equipment or any
part thereof; or (xiii) any other cause or circumstances whether similar or
dissimilar to the foregoing and whether or not the Lessee shall have notice or
knowledge of any of the foregoing.  The Lessee's agreement in the preceding
sentence shall not affect any claim, action or right the Lessee may have against
the Lessor or any Lender.  The parties intend that the obligations of the Lessee
hereunder shall be covenants and agreements that are separate and independent
from any obligations of the Lessor hereunder or under any other Operative
Documents, and the obligations of the Lessee shall continue unaffected unless
such obligations shall have been modified or terminated in accordance with an
express provision of this Master Lease.

     5.2 No Termination or Abatement.  The Lessee shall remain obligated under
         ---------------------------                                          
this Master Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Master Lease (except as provided herein),
notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting the Lessor or any
Lender, or any action with respect to this Master Lease which may be taken by
any trustee, receiver or liquidator of the Lessor or any Lender or by any court
with respect to the Lessor or any Lender.  The Lessee hereby waives all rights
(i) to terminate or surrender this Master Lease (except as provided herein) or
(ii) to avail itself of any abatement, suspension, deferment, reduction, set-
off, counterclaim or defense with respect to any Rent.  The Lessee shall remain
obligated under this Master Lease in accordance with its terms and the Lessee
hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Master Lease.  Notwithstanding any such statute or otherwise, the Lessee
shall be bound by all of the terms and conditions contained in this Master
Lease.

                                       9
<PAGE>
 
                                  ARTICLE VI
                                   SUBLEASES

     6.1 Subletting.  The Lessee may sublease any of the Equipment or any
         ----------                                                      
portion thereof to one or more of its Subsidiary Guarantors; provided, however,
                                                             --------  ------- 
that no sublease or other relinquishment of possession of any of the  Equipment
shall in any way discharge or diminish any
of the Lessee's obligations to the Lessor hereunder and the Lessee shall remain
directly and primarily liable under this Master Lease as to the Equipment, or
any portion thereof, so sublet.  Each sublease or other permitted use of any of
the Equipment shall expressly be made subject and subordinate to this Master
Lease and to the rights of the Lessor and the Agent hereunder and under the
other Operative Documents, and shall expressly provide for the immediate
surrender of the related Equipment to the Lessor after notice from the Lessor to
such sublessee of the occurrence of a Lease Event of Default hereunder and a
request for such surrender.  All such subleases shall expressly provide for
automatic termination at or prior to the earlier to occur of (i) the Expiration
Date or (ii) the date the Lease Term is earlier terminated in accordance with
the provisions of this Master Lease or the other Operative Documents, unless the
Lessee shall have purchased the Equipment pursuant to Article XVIII.
                                                      -------------  
Notwithstanding anything contained herein to the contrary, neither the Lessee
nor any Permitted User shall have any rights whatsoever to sublease or grant any
right to use any of the Equipment to any Person except that Lessee may sublease
the Equipment to, or permit the use thereof by, a Permitted User, and neither
the Lessee nor any Permitted User shall have any right to assign any of its
rights, title and interests under this Master Lease.

     6.2 Assignment of Subleases and Business Interruption Insurance to Lessor.
         ------------------------------------------------- -------------------  
To secure the prompt and full payment by the Lessee of the Rent, the Lessee
hereby assigns to the Lessor, subject to the conditions hereinafter set forth,
all of the Lessee's right, title and interest in and to all subleases affecting
any of the Equipment and all rents, issues and profits accruing thereunder, and
all guarantees and security deposits with respect to such subleases, and the
Lessee hereby confers, and, if requested by the Lessor, will cause each
applicable Permitted User to confer, upon the Lessor, the Lenders and their
respective agents and representatives, sufficient possession of the Equipment to
permit and insure the collection by the Lessor of the rentals and other sums
payable under such subleases; provided, however, that such assignment, although
                              --------  -------                                
presently effective, is given solely as security, and the Lessor hereby
irrevocably waives the right to exercise the Lessor's rights pursuant to this
                                                                             
Section 6.2 until and unless a Lease Event of Default shall occur and be
-----------                                                             
continuing.  The Lessee hereby irrevocably directs and, if requested by the
Lessor, will cause each Permitted User to pay to the Lessor the rentals or other
sums payable under its sublease in accordance with the Master Lease when, as and
if directed to do so by the Lessor in a written notice to such Permitted User in
which the Lessor shall certify that a Lease Event of Default shall have occurred
and be continuing under this Master Lease.  The Lessee hereby irrevocably
notifies and directs each Permitted User to pay such amounts to the Lessor in

                                       10
<PAGE>
 
the event such Permitted User receives any such notice from the Lessor, and the
Lessee hereby irrevocably waives, any claims for nonpayment of such rentals or
other sums that might arise as a result of such payments to the Lessor.

                                  ARTICLE VII
                            LESSEE ACKNOWLEDGMENTS

     7.1 Condition of the Equipment.  WITHOUT LIMITATION OF SECTION 2.4 HEREOF,
         --------------------------                         -----------        
THE LESSEE ACKNOWLEDGES AND AGREES THAT ALTHOUGH THE LESSOR WILL OWN AND HOLD
TITLE TO THE EQUIPMENT, THE LESSEE IS SOLELY RESPONSIBLE UNDER THE TERMS OF THIS
MASTER LEASE FOR THE MERCHANTABILITY, FITNESS, OPERATION, REPAIR, PERFORMANCE,
SERVICING AND MAINTENANCE OF THE EQUIPMENT. THE LESSEE FURTHER ACKNOWLEDGES AND
AGREES THAT IT IS LEASING EACH ITEM OF EQUIPMENT "AS IS" WITHOUT REPRESENTATION,
WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR, THE FINANCING LENDERS
OR THE EQUITY LENDERS AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF
TITLE (EXCLUDING LESSOR LIENS), (B) THE RIGHTS OF ANY PARTIES IN POSSESSION
THEREOF, (C) ANY STATE OF FACTS WHICH AN ACCURATE PHYSICAL INSPECTION MIGHT
SHOW, AND (D) VIOLATIONS OF REQUIREMENTS OF LAW AND EQUIPMENT LEGAL REQUIREMENTS
WHICH MAY EXIST ON THE DATE HEREOF OR ON THE EFFECTIVE DATE FOR SUCH ITEM OF
EQUIPMENT. NONE OF THE LESSOR, THE FINANCING LENDERS OR THE EQUITY LENDERS HAS
MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO
THE TITLE (OTHER THAN THE LESSOR FOR LESSOR LIENS), VALUE, HABITABILITY, USE,
CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF ANY OF THE EQUIPMENT (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE EQUIPMENT (OR ANY PART THEREOF)
AND NONE OF THE LESSOR, THE FINANCING LENDERS OR THE EQUITY LENDERS SHALL BE
LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR
LIENS) OR THE FAILURE OF ANY OF THE EQUIPMENT, OR ANY PART THEREOF, TO COMPLY
WITH ANY REQUIREMENT OF LAW OR EQUIPMENT LEGAL REQUIREMENT.

     7.2 Risk of Loss.  During the Lease Term the risk of loss of or decrease
         ------------                                                        
in the enjoyment and beneficial use of the Equipment as a result of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by the Lessee, and the Lessor shall in no event be
answerable or accountable therefor.

                                       11
<PAGE>
 
                                 ARTICLE VIII
                   POSSESSION AND USE OF THE EQUIPMENT, ETC.

     8.1 Use of the Equipment.  The Equipment shall be used solely in the
         --------------------                                            
businesses operated by the Lessee and the Subsidiary Guarantors and only in the
manner for which such Equipment was designed and intended so as to subject it
only to ordinary wear and tear.  The Lessee shall pay, or cause to be paid, all
charges and costs required in connection with the use of the Equipment as
contemplated by this Master Lease. The Lessee shall not commit or permit any
waste or deterioration of the Equipment or any part thereof (other than ordinary
wear and tear) and shall perform all scheduled maintenance on a basis no less
frequent than the scheduling basis employed by the Lessee for similar equipment
owned or operated by the Lessee or its Affiliates.

     8.2 Compliance with Requirements of Law, Equipment Legal Requirements and
         ---------------------------------------------------------------------
Insurance Requirements.  Subject to the terms of Article XII hereof relating to
----------------------                           -----------                   
Permitted Contests, the Lessee, at its sole cost and expense, shall (a) comply
in all material respects with all Requirements of Law (including all Hazardous
Materials Laws), Equipment Legal Requirements and Insurance Requirements
relating to the Equipment, including the use, operation, maintenance, repair and
restoration thereof and the remarketing thereof pursuant to Article XX
                                                            ----------
hereunder, whether or not compliance therewith shall require structural or
extraordinary changes in the Equipment or interfere with the use and enjoyment
of the Equipment, and (b) procure, maintain and comply with all licenses,
permits, orders, approvals, consents and other authorizations required for the
use, maintenance and operation of the Equipment and for the use, operation,
maintenance, repair and restoration of the Equipment.

     8.3 Assignment by Lessee.  The Lessee may not assign this Master Lease or
         --------------------                                                 
any of its rights or obligations hereunder in whole or in part to any Person,
except that the Lessee may sublease any of the Equipment or portion thereof as
permitted under Section 6.1 of this Master Lease.
                -----------                      

     8.4 Permitted Users.  So long as no Lease Event of Default shall exist and
         ---------------                                                       
subject to the terms and provisions of this Master Lease and the other Operative
Documents and the rights of the Lessor, the Agent, and the Lenders hereunder and
thereunder, any Permitted User may use (but not acquire any interest in) any of
the Equipment in accordance with the terms of this Master Lease; provided, that
                                                                 --------      
the rights of each Permitted User in the Equipment are and shall at all times be
subject and subordinate to all of the rights and remedies of the Lessor, the
Agent, and the Lenders hereunder and under the other Operative Documents.  All
rights of any Permitted User in and to the Equipment shall automatically cease
and terminate on the Expiration Date or pursuant to the Lessor's exercise of any
of its rights and remedies hereunder.

                                       12
<PAGE>
 
     8.5 Location of Equipment.  The Lessee and each Permitted User shall keep
         ---------------------                                                
each item of the Equipment strictly at the location specified on Exhibit "A",
                                                                 ----------- 
attached hereto (being its present location), and shall not move or otherwise
relocate any item of the Equipment without the express written consent of the
Agent and the Equity Lenders.

                                  ARTICLE IX
                        MAINTENANCE AND REPAIR; RETURN

     9.1 Maintenance and Repair; Return.
         ------------------------------ 

         (a)   The Lessee, at its sole cost and expense, shall maintain each
     item of the Equipment in good condition (ordinary wear and tear from proper
     use alone excepted) and make all necessary repairs thereto, of every kind
     and nature whatsoever, whether ordinary or extraordinary, structural or
     nonstructural or foreseen or unforeseen, in each case as required by all
     Requirements of Law, Equipment Legal Requirements and Insurance
     Requirements and on a basis consistent with the operation and maintenance
     of first-class
     envelope and commercial printing equipment comparable to the Equipment and
     in no event less than the standards applied by the Lessee in the operation
     and maintenance of other comparable equipment owned or leased by the Lessee
     or its Affiliates.

         (b)   The Lessor shall under no circumstances be required to make any
     repairs, replacements, alterations or renewals of any nature or description
     to any of the Equipment, make any expenditure whatsoever in connection with
     this Master Lease (other than for Advances made in accordance with and
     pursuant to the terms of the Participation Agreement) or maintain any of
     the Equipment in any way.  The Lessee waives any right to (i) require the
     Lessor to maintain, repair, rebuild or replace all or any part of any of
     the Equipment or (ii) make repairs at the expense of the Lessor pursuant to
     any Requirement of Law, Equipment Legal Requirement, Insurance Requirement,
     contract, agreement, or covenant, condition or restriction in effect at any
     time during the Lease Term.

         (c)   The Lessee shall, upon the Expiration Date or earlier termination
     of this Master Lease (other than as a result of the Lessee's purchase of
     the Equipment from the Lessor as provided herein), return and surrender the
     Equipment to the Lessor in the same condition as when delivered to Lessee
     hereunder, ordinary wear and tear resulting from proper use thereof alone
     excepted, free of any Hazardous Materials that may have a material adverse
     affect on the value of the Equipment, and free and clear of any Liens
     whatsoever other than Lessor Liens, complying with the Lessee's obligations
     under Sections 8.2, 9.1(a), 10.1, 11.1, 14.1(e), 14.2 and 20.1 of this
           ------------  ------  ----  ----  -------  ----     ----        
     Master Lease.

     9.2 Return of the Equipment.  As a condition to the consummation of the
         -----------------------                                            
sale of the Equipment pursuant to the Remarketing Option, the Lessee shall, at
its expense:

                                       13
<PAGE>
 
         (a)   At least ninety (90) days and not more than one hundred twenty
     (120) days prior to the Expiration Date or earlier termination of this
     Master Lease, cause a manufacturer's representative or a qualified
     equipment maintenance provider, acceptable to the Lessor, to perform (i) a
     comprehensive physical inspection of all the components and capabilities of
     the Equipment (including but not limited to sensors, motors, controls,
     lubrication systems, and all hydraulic, electrical and mechanical controls
     and switches); (ii) a testing of software and a testing and examination of
     printed material coming off the press for its salability; and (iii) a
     review of the maintenance records including but not limited to lubrication,
     schedules, rollers resurfaced, blankets changed, etc.  The inspection on
     each piece of the Equipment shall verify and certify that the Equipment can
     perform at its original performance specifications with regard to speed,
     register control and quality of printed matter.  If during such inspection,
     examination and test, the authorized inspector finds any of the material or
     workmanship to be defective or the Equipment not operating within
     manufacturer's specifications, then the Lessee shall repair or replace such
     defective material and, after corrective measures are completed, the Lessee
     shall provide for a follow-up inspection by the authorized inspector for
     the purposes of certifying the Equipment's performance capabilities as
     outlined above;

         (b)   ensure that all of the Equipment and the operations thereof
     conform to all applicable local, state, and federal laws, and health and
     safety guidelines, including without limitation those prescribed by the
     Occupational Safety and Health Act;

         (c)   provide for the de-installation, packing, transporting to any
     location(s) within the continental United States, all of which shall
     include, but not be limited to the following:  the manufacturer's
     representative de-installing all of the Equipment (including all wire,
     cable and mounting hardware and software) in accordance with the
     specifications of the manufacturer, the Equipment being removed by a
     licensed and insured erector/rigger who specializes in printing equipment
     removal and crating of the Equipment, and shall be performed in a
     prescribed manner, including proper marking and labeling of electrical
     wires connections and components; and

         (d)   provide insurance and safe, secure storage for the Equipment for
     sixty (60) days after the Expiration Date or earlier termination of this
     Master Lease at accessible location(s) satisfactory to the Lessor.

                                   ARTICLE X
                              MODIFICATIONS, ETC.

     10.1 Modifications, Substitutions and Replacements.  The Lessee, at its
          ---------------------------------------------                     
sole cost and expense, may at any time and from time to time make alterations,
improvements and additions to

                                       14
<PAGE>
 
any item of the Equipment or any part thereof and substitutions and replacements
therefor (collectively, "Modifications"); provided, however, that:
                         -------------    --------  -------       

          (a)  except for any Modification required to be made pursuant to a
     Requirement of Law or Equipment Legal Requirement (a "Required
                                                           --------
     Modification"), no Modification shall materially adversely affect the
     ------------
     present or residual fair market value or useful life of the Equipment or
     any part thereof from that which existed immediately prior to such
     Modification;

          (b)  the Modification shall be done in a good and workmanlike manner;

          (c)  the Lessee shall comply in all material respects with all
     Requirements of Law (including all Hazardous Materials Laws), Equipment
     Legal Requirements and Insurance Requirements applicable to the
     Modification;

          (d)  subject to the terms of Article XII relating to Permitted
                                       -----------                      
     Contests, the Lessee shall pay all costs and expenses and shall discharge
     (or cause to be insured or bonded over) within ten (10) days after the same
     shall be filed (or otherwise become effective) any Liens arising with
     respect to the Modification;

          (e)  such Modifications shall comply with Sections 8.2 and 9.1(a); and
                                                    ------------     ------     

          (f)  written notice of each such Modification of any material nature
     shall be given, prior to the making of such Modification, to the Agent and
     the Equity Lenders, setting forth in reasonable detail the nature and cost
     thereof.

All Modifications shall remain part of the Equipment and shall be subject to
this Master Lease and title thereto shall immediately vest in the Lessor.

                                  ARTICLE XI
                         PROTECTION OF TITLE BY LESSEE

     11.1 Prohibition on Liens.
          -------------------- 

          (a)  The Lessee agrees that except as otherwise provided herein and
     subject to the terms of Article XII relating to Permitted Contests, the
                             -----------                                    
     Lessee shall not directly or indirectly create or allow to remain, and
     shall promptly discharge at its sole cost and expense, any Lien (other than
     any Lessor Lien and Permitted Property Liens), upon any of the Equipment or
     any Modifications or any Lien with respect to the Rent or with respect to
     any amounts held by the Lessor or the Lenders pursuant to the Loan
     Agreement or the other Operative Documents.

                                       15
<PAGE>
 
          (b)  Nothing contained in this Master Lease shall be construed as
     constituting the consent or request of the Lessor, expressed or implied, to
     or for the performance by any contractor, mechanic, laborer, materialman,
     supplier or vendor of any labor or services or for the furnishing of any
     materials for any construction, alteration, addition, repair or demolition
     of or to any of the Equipment or any part thereof.  NOTICE IS HEREBY GIVEN
     THAT NONE OF THE LESSOR OR THE LENDERS IS OR SHALL BE LIABLE FOR ANY LABOR,
     SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO
     ANYONE HOLDING THE EQUIPMENT OR ANY PART THEREOF THROUGH OR UNDER THE
     LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES
     OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR OR ANY
     LENDER IN AND TO ANY OF THE EQUIPMENT.


                                  ARTICLE XII
                              PERMITTED CONTESTS

     12.1 Permitted Contests in Respect of Applicable Law.
          ----------------------------------------------- 

          (a)  If, to the extent and for so long as (i) a test, challenge,
     appeal or proceeding for review of any Applicable Law relating to any of
     the Equipment shall be prosecuted diligently and in good faith in
     appropriate proceedings by the Lessee or (ii) compliance with such
     Applicable Law shall have been excused or exempted by a valid waiver,
     extension or forbearance, the Lessee shall not be required to comply with
     such Applicable Law but only if and so long as any such test, challenge,
     appeal, proceeding, waiver, extension, forbearance or noncompliance shall
     not, in the reasonable opinion of the Lessor, the Financing Lenders and the
     Equity Lenders, involve (A) any risk of criminal liability being imposed on
     the Lessor, any Financing Lender, any Equity Lender or any item of the
     Equipment or (B) any risk of (1) foreclosure, forfeiture or loss of such
     item of the Equipment, or any material part thereof, or (2) the nonpayment
     of Rent or (C) any risk of (1) the sale of, or the creation of any Lien on,
     any part of such item of the Equipment, (2) civil liability being imposed
     on the Lessor, any Financing Lender, any Equity Lender or such item of the
     Equipment, or (3) enjoinment of, or interference with, the use, possession
     or disposition of such item of the Equipment in any material respect.
     Notwithstanding the foregoing, the Lessee shall have no right of contest
     under the provisions of this Section 12.1 upon any return or Remarketing of
                                  ------------                                  
     the Equipment pursuant to this Master Lease.

          (b)  The Lessor will not be required to join in any proceedings
     pursuant to this Section 12.1 unless a provision of any Applicable Law
                      ------------                                         
     requires that such proceedings be brought by or in the name of the Lessor;
     and in that event, the Lessor will join in the proceedings or permit such
     proceedings or any part thereof to be brought in its name if

                                       16
<PAGE>
 
     and so long as (i) the Lessee has not elected the Remarketing Option and
     (ii) the Lessee pays all related expenses and indemnifies the Lessor and
     the Lenders to the satisfaction of the respective Indemnitees.

                                 ARTICLE XIII
                                  INSURANCE

     13.1 Public Liability and Workers Compensation Insurance.
          --------------------------------------------------- 

          (a)  During the Lease Term, the Lessee shall procure and carry, at the
     Lessee's sole cost and expense, commercial general liability insurance for
     claims for injuries or death sustained by persons or damage to property
     arising or resulting from the use, ownership or operation of any of the
     Equipment and such other public liability coverages as are ordinarily
     procured by the Lessee or its Affiliates who own or operate similar
     equipment, but in any case shall provide liability coverage of at least
     $5,000,000 per person and $2,000,000 for property damage per occurrence,
     subject to a $10,000,000 annual aggregate. Such insurance shall be on
     terms, in amounts and with insurers that are no less favorable than
     insurance maintained by the Lessee or such Affiliates with respect to
     similar equipment that they own and that are in accordance with normal
     industry practice. The policy shall be endorsed to name the Lessor, the
     Agent and each Lender as additional insureds. The policy shall also
     specifically provide that the policy shall be considered primary insurance
     which shall apply to any loss or claim before any contribution by any
     insurance which the Lessor, or any Lender may have in force.

          (b)  The Lessee shall, in the operation of the Equipment, comply with
     the applicable workers' compensation laws.

     13.2 Hazard and Other Insurance.  During the Lease Term, the Lessee shall
          --------------------------                                          
keep, or cause to be kept, each item of the Equipment insured against loss or
damage by fire, earthquake, flood and other risks on terms and in amounts that
are no less favorable than insurance covering other similar equipment owned by
the Lessee or its Affiliates and, in any event, in an amount not less than full
replacement value and that are in accordance with the insurance coverage set
forth on Exhibit "B", attached hereto; provided, that such insurance shall
         ----------                                                       
separately cover each item of the Equipment, shall be "all risk" property
insurance, and shall be in an amount not less than the Purchase Price paid by
Lessor to Lessee for each such item of the Equipment.  All insurance proceeds in
respect of any loss or occurrence for which the proceeds related thereto are (i)
less than or equal to $100,000, in the absence of the occurrence and continuance
of an Event of Default, shall be paid to the Lessee for application in
accordance with Article XIV and (ii) greater than $100,000, shall be adjusted
                -----------                                                  
jointly by the Lessee and the Lessor (unless an Event of Default has occurred
and is continuing, in which case such proceeds shall be adjusted solely by the
Lessor) and held by the Lessor for application in accordance with Article XIV.
                                                                  ----------- 

                                       17
<PAGE>
 
     13.3 Insurance Coverage.
          ------------------ 

          (a)  The Lessee shall furnish the Lessor and each Lender with
     certificates showing the insurance required under Sections 13.1 and 13.2
                                                       -------------     ----
     hereof to be in effect and naming the Lessor, the Agent and each Lender as
     additional insureds with respect to liability coverage (excluding worker's
     compensation insurance), naming the Agent, the Lessor and the Lessee as
     their interests may appear with respect to casualty coverage and naming the
     Agent as loss payee with respect to casualty coverage and showing the loss
     payee endorsement required by Section 13.3(b) of this Master Lease with
                                   ---------------                          
     respect to such coverage.  All such insurance shall be at the cost and
     expense of the Lessee.  Such certificates shall include a provision for no
     less than thirty (30) days, advance written notice by the insurer to the
     Lessor and each additional insured and loss payee in the event of
     cancellation or reduction of such insurance.  In addition, the Lessee shall
     cause the Lessor, the Agent and each Lender to be named as additional
     insureds under each liability policy maintained hereunder.


          (b)  The Lessee agrees that the insurance policy or policies required
     by Section 13.2 above shall include an appropriate clause pursuant to which
        ------------                                                            
     such policy shall provide that it will not be invalidated should the Lessee
     waive, in writing, prior to a loss, any or all rights of recovery against
     any party for losses covered by such policy, and that the insurance in
     favor of the Lessor, the Agent, the Financing Lenders and the Equity
     Lenders, and their respective rights under and interests in said policies,
     shall not be invalidated or reduced by any act or omission or negligence of
     the Lessee or any other Person having any interest in any of the Equipment.
     The Lessee hereby waives any and all such rights against the Lessor,  the
     Financing Lenders and the Equity Lenders to the extent of payments made
     under such policies.

          (c)  The Lessee may self insure (including by way of deductibles) with
     respect to damage, casualty coverage and liability coverage to the extent
     provided under, and in a manner consistent with, the Lessee's comprehensive
     all-risk policy and risk management program in effect from time to time.

          (d)  The Lessee shall pay as they become due all premiums for the
     insurance required by Sections 13.1 and 13.2 above, and shall renew or
                           -------------     ----                          
     replace each policy prior to the expiration date thereof.  Throughout the
     Lease Term, at the time each of the Lessee's insurance policies is renewed
     (but in no event less frequently than once each year), the Lessee shall
     deliver to the Lessor and each Lender certificates of insurance evidencing
     that all insurance required by this Article XIII is being maintained by the
                                         ------------                           
     Lessee and is in effect.

                                       18
<PAGE>
 
                                  ARTICLE XIV
               CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS

     14.1 Casualty and Condemnation.
          ------------------------- 

          (a)  Subject to the provisions of this Article XIV, (i) if all or a
                                                 -----------                 
     portion of any of the Equipment is damaged or destroyed in whole or in part
     by a Casualty (other than a Significant Casualty), any insurance proceeds
     payable with respect to such Casualty shall be paid directly to the Lessee,
     or if received by the Lessor or the Agent, shall be paid over to the Lessee
     for the reconstruction, refurbishment and repair of such item of the
     Equipment and (ii) if the use of, access to, or possession of, or title to,
     all or a portion of any of the Equipment is the subject of a Condemnation
     (other than a Significant Condemnation), then any award or compensation
     relating thereto shall be paid to the Lessee; provided, however, that, in
                                                   --------  -------          
     each case, if a Lease Event of Default shall have occurred and be
     continuing, such award, compensation or insurance proceeds shall be paid
     directly to the Agent or, if received by the Lessee, shall be held in trust
     for the Agent, and shall be paid over by the Lessee to the Agent to be
     distributed by the Agent in accordance with the Loan Agreement.  All
     amounts held by or payable to the Agent when a Lease Event of Default
     exists hereunder on account of any compensation or insurance proceeds shall
     at the option of the Agent either be (i) paid to the Lessee for the repair
     of damage caused by such Casualty or Condemnation in accordance with 
     clause (d) of this Section 14.1, or (ii) applied to the Lease Balance.
     ----------         ------------         
     
          (b)  The Lessee may appear in any proceeding or action to negotiate,
     prosecute, adjust or appeal any claim for any compensation or insurance
     payment on account of any such Casualty or Condemnation and shall pay all
     expenses thereof.  At the Agent's request, and at the Lessee's sole cost
     and expense, the Agent may participate in any such proceeding, action,
     negotiation, prosecution or adjustment.  The Lessor and the Lessee agree
     that this Master Lease shall control the rights of the Lessor and the
     Lessee in and to any such award, compensation or insurance payment.

          (c)  If the Lessor or the Lessee shall receive notice, or if a
     Responsible Officer of Lessee has actual knowledge, of a Casualty or of an
     actual, pending or threatened Condemnation affecting any of the Equipment
     or any interest therein, the Lessor or the Lessee, as the case may be,
     shall give notice thereof to the other and to the Agent promptly after the
     receipt of such notice.

          (d)  If pursuant to this Section 14.1 and Section 15.1 this Master
                                   ------------     ------------            
     Lease shall continue in full force and effect following a Casualty or
     Condemnation with respect to any of the Equipment, the Lessee shall, at its
     sole cost and expense (and, without limitation,

                                       19
<PAGE>
 
     if any award, compensation or insurance payment is not sufficient to
     restore such item of the Equipment in accordance with this clause (d), the
                                                                ----------
     Lessee shall pay the shortfall), promptly (and in any event prior to any
     Termination Date or Expiration Date) and diligently repair any damage to
     such Equipment caused by such Casualty or Condemnation in conformity with
     the requirements of Sections 9.1 and 10.1 so as to restore such item of the
                         ------------     ----
     Equipment to at least the same condition, operation, function and value as
     existed immediately prior to such Casualty or Condemnation with such
     Modification as the Lessee may elect in accordance with Section 10.1. In
                                                             ------------
     such event, title to such Equipment shall remain with the Lessor subject to
     the terms of this Master Lease. Upon completion of such restoration, the
     Lessee shall furnish the Lessor a Responsible Officer's Certificate
     confirming that such restoration has been completed pursuant to this Master
     Lease.

          (e)  In no event shall a Casualty or Condemnation affect the Lessee's
     obligations to pay Rent pursuant to Section 3.1 or to perform its
                                         -----------                  
     obligations and pay any amounts due on the Expiration Date or otherwise
     pursuant to this Master Lease.  Notwithstanding anything contained herein
     to the contrary, in the event that a Casualty or Condemnation shall exist
     on the Expiration Date, all amounts payable with respect thereto shall be
     paid to the Agent to be disbursed by the Agent to the Lenders in accordance
     with the terms of the Loan Agreement.

          (f)  Subject to the provisions hereof, any Excess 
     Casualty/Condemnation Proceeds received by the Agent in respect of a
     Casualty shall be turned over to the Lessee.

     14.2 Environmental Matters.  Promptly upon the Lessee's knowledge of the
          ---------------------                                              
existence of an Environmental Violation that could have a material and adverse
effect with respect to any of the Equipment, the Lessee shall notify the Agent
in writing of such Environmental Violation.  If the Lessor elects not to
terminate this Master Lease with respect to such Equipment pursuant to Section
                                                                       -------
15.1, at the Lessee's sole cost and expense, the Lessee shall promptly and
----                                                                      
diligently comply with all Applicable Law and commence any response, clean up,
remedial or other action necessary to remove, clean up or remediate the
Environmental Violation in accordance with Section 8.2 and the requirements of
                                           -----------                        
all applicable Hazardous Materials Laws.  The Lessee shall, upon completion of
remedial action by the Lessee, cause to be prepared by an environmental
consultant reasonably acceptable to the Lessor a report describing the
Environmental Violation and the actions taken by the Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in compliance in all material
respects with applicable Hazardous Materials Laws referred to in Section 8.2
                                                                 -----------
hereof.  Each such Environmental Violation shall be remedied prior to the
Expiration Date unless each item of the Equipment with respect to which an
Environmental Violation has occurred but has not been remedied has been
purchased by the Lessee in accordance with Sections 18.1 or 18.2. Nothing in
                                           -------------    ----            
this Article XIV shall reduce or limit the Lessee's obligations under Sections
     -----------                                                      --------
12.1, 12.2 or 12.3 of the Participation Agreement.
----  ----    ----                                

                                       20
<PAGE>
 
     14.3 Notice of Environmental Matters.  Promptly, but in any event within
          -------------------------------                                    
sixty (60) Business Days from the date the Lessee has actual knowledge thereof,
the Lessee shall provide to the Lessor written notice of any pending or
threatened Claim, action or proceeding involving any Hazardous Materials Laws or
any Release on or in connection with any of the Equipment that could have a
material and adverse effect in connection with any of the Equipment or creates
any risk of liability upon the Agent or any Lender or  any Lien upon  any of the
Equipment.  All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and the Lessee's proposed response thereto.  In
addition, the Lessee shall provide to the Lessor, within sixty (60) Business
Days of receipt, copies of all written communications with any Governmental
Authority relating to any Environmental Violation which could have a material
and adverse effect in connection with any of the Equipment.  The Lessee shall
also promptly provide such detailed reports of any such material environmental
Claims as may reasonably be requested by the Lessor, any Financing Lender or any
Equity Lender.  In the event that the Lessor receives written notice of any
pending or threatened Claim, action or proceeding involving any Hazardous
Materials Laws or any Release on or in connection with any of the Equipment, the
Lessor shall promptly give notice thereof to the Lessee.

                                  ARTICLE XV
                             TERMINATION OF LEASE

     15.1 Partial Termination upon Certain Events.  If any Significant Casualty
          ---------------------------------------                              
or Condemnation, or material and adverse Environmental Violation as specified in
                                                                                
Section 14.2, occurs with respect to any of the Equipment, and the Lessor shall
------------                                                                   
have given written notice (a "Termination Notice") to the Lessee that, as a
                              ------------------
consequence of such event, this Master Lease is to be terminated with respect to
such Equipment, then the Lessee shall be obligated to purchase the Lessor's
interest in such affected Equipment on or prior to the next occurring Payment
Date by paying the Lessor an amount equal to the Equipment Balance for such
affected Equipment. The portion of the Equipment Balance allocated to each item
of the Equipment shall be as set forth on Exhibit "B", attached hereto.
                                          ----------

     15.2 Partial Termination Procedures.  On the date of the payment by the
          ------------------------------                                    
Lessee of the Equipment Balance with respect to any of the Equipment in
accordance with Section 15.1 (such date, the "Partial Termination Date"), this
                ------------                  ------------------------        
Master Lease shall terminate with respect to such Equipment and, concurrent with
the Lessor's receipt of such payment, 

          (a)  the Lessor shall execute and deliver to the Lessee (or to the
     Lessee's designee) at the Lessee's cost and expense a bill of sale with
     respect to such  Equipment, without recourse, representation or warranty of
     any kind whatsoever, and with the disclaimers set forth in Section 2.4
                                                                -----------
     hereof, in each case in conformity with local custom and free and clear of
     the Lien of the Lessor First Security Agreement and the Lessor Second
     Security Agreement, and any Lessor Liens attributable to the Lessor;

                                       21
<PAGE>
 
          (b)  such item of the Equipment shall be conveyed to the Lessee (or to
     the Lessee's designee) "AS IS" and in its then present physical condition
     subject to each of the disclaimers set forth in Section 2.4 hereof; and
                                                     -----------            

          (c)  any Net Proceeds with respect to the Casualty or Condemnation
     giving rise to the termination of this Master Lease with respect to such
     item of the Equipment theretofore received by the Agent shall be applied
     against sums due hereunder and any remaining balance shall be paid to the
     Lessee provided that no Lease Event of Default is then existing.

                                  ARTICLE XVI
                               EVENTS OF DEFAULT

     16.1 Lease Events of Default.  The occurrence of any one or more of the
          -----------------------                                           
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute a "Lease Event of
                                                             --------------
Default":
-------  

          (a)  the Lessee shall fail to make payment of (i) any Basic Rent
     within five (5) days after the same has become due and payable or (ii) any
     Equipment Balance, Purchase Option Price, Loan Balance or Lease Balance,
     including, without limitation, amounts due pursuant to Sections 15.1, 18.1,
                                                            -------------  ---- 
     18.2, 18.3 or 20.1, on the date due therefor; or
     ----  ----    ----                              

          (b) the Lessee shall fail to make payment of any Supplemental Rent
     (other than Supplemental Rent referred to in clause (a) of this Section)
                                                  ----------
     payable within five (5) days after receipt of notice thereof; or

          (c)  the Lessee shall fail to maintain insurance as required by
     Article XIII of this Master Lease; or
     ------------                         

          (d)  the Lessee shall fail to observe or perform any term, covenant or
     condition of the Lessee under this Master Lease, the Participation
     Agreement or any other Operative Document to which it is a party other than
     those described in clauses (a), (b) or (c) of this Section 16.1, or in
                        -----------  ---    ---         ------------       
     Articles XX and XXI hereof, or any Subsidiary Guarantor shall fail to
     -----------     ---                                                  
     observe or perform any term, covenant or condition applicable to it under
     the Participation Agreement (exclusive of defaults under the Guaranty) and,
     in each such case, such failure shall have continued for thirty (30) days
     after the earlier of (i) delivery to the Lessee or such Subsidiary
     Guarantor, as applicable, of written notice thereof from the Lessor or (ii)
     a Responsible Officer of the Lessee or such Subsidiary Guarantor, as
     applicable, shall have knowledge of such failure;  or

                                       22
<PAGE>
 
          (e)  any representation or warranty made by the Lessee, Holdings, or
     any Subsidiary Guarantor in any of the Operative Documents to which it is a
     party shall have been inaccurate in any material respect at the time made;
     or

          (f)  a default by the Lessee or any other Guarantor beyond any
     applicable grace period shall have occurred and be continuing under the
     Guaranty; or

          (g)  any Operative Document to which the Lessee or any other Guarantor
     is a party or any Lien granted under any such Operative Document shall, in
     whole or in part, terminate, cease to be effective against, or cease to be
     the legally valid, binding and enforceable obligation of, the Lessee or any
     such other Guarantor, as the case may be; or

          (h)  the Lessee or any other Guarantor shall directly or indirectly
     contest in any manner the effectiveness, validity, binding nature or
     enforceability of any Operative Document or any Lien granted under any
     Operative Document, or the Lessee or any other Guaranty shall repudiate, or
     purport to discontinue or terminate, the  Guaranty; or

          (i)  an Event of Default  (as defined in the Credit Agreements) shall
     have occurred and be continuing under any Credit Agreement.

     16.2 Remedies.  Upon the occurrence of any Lease Event of Default and at
          --------                                                           
any time thereafter, the Agent, as agent for the Lenders, may, with the consent
of the Required Equity Lenders and shall, at the direction of the Required
Equity Lenders, so long as such Lease Event of Default is continuing, do one or
more of the following as the Agent in its sole discretion shall determine (in
accordance with such consent or direction), without limiting any other right or
remedy the Lessor may have on account of such Lease Event of Default (including,
without limitation, the obligation of the Lessee to purchase the Equipment as
set forth in Section 18.3):
             ------------  

          (a)  The Agent may, by notice to the Lessee, rescind or terminate this
     Master Lease as to any item of the Equipment or all of the Equipment as of
     the date specified in such notice; however, (i) no reletting or taking of
     possession of any of the Equipment (or any portion thereof) by the Agent
     will be construed as an election on the Agent's part to terminate this
     Master Lease unless a written notice of such intention is given to the
     Lessee, (ii) notwithstanding any reletting or taking of possession, the
     Agent may at any time thereafter elect to terminate this Master Lease for a
     continuing Lease Event of Default and (iii) no act or thing done by the
     Agent or any of its agents, representatives or employees and no agreement
     accepting a surrender of the Equipment shall be valid unless the same be
     made in writing and executed by the Agent;

         (b)   The Agent may (i) demand that the Lessee, and the Lessee shall
     upon the written demand of the Agent, return any of the Equipment promptly
     to the Agent in the

                                      23
<PAGE>
 
     manner and condition required by, and otherwise in accordance with all of
     the provisions of Articles VII and IX and Section 8.2 hereof as if such 
                       ------------     --     -----------
     item of the Equipment were being returned at the end of the Lease Term, and
     the Agent shall not be liable for the reimbursement of the Lessee for any
     costs and expenses incurred by the Lessee in connection therewith and (ii)
     without prejudice to any other remedy which the Agent may have for
     possession of any of the Equipment, and to the extent and in the manner
     permitted by Applicable Law, take immediate possession of (to the exclusion
     of the Lessee) such Equipment and remove such Equipment from the premises
     where it is located, by summary proceedings or otherwise, all without
     liability to the Lessee for or by reason of such entry or taking of
     possession, whether for the restoration of damage to the Equipment caused
     by such taking or otherwise and, in addition to the Agent's other damages,
     the Lessee shall be responsible for all costs and expenses incurred by the
     Agent, the Financing Lenders and/or the Equity Lenders in connection with
     any reletting or disposition, including without limitation, reasonable
     brokers' fees and all costs of any alterations or repairs made by the
     Agent;

          (c)  The Agent may (i) declare an amount equal to the sum of Loan
     Balance as of the date of such declaration, together with all other accrued
     Obligations of the Lessor and the Lessee to the Lenders under the Operative
     Documents, to be immediately due and payable; and/or (ii) sell all or any
     part of any one or more items of the Equipment at public or private sale,
     as the Agent may determine, free and clear of any rights of the Lessee
     (except that Excess Sales Proceeds are payable to and shall be paid to the
     Lessee) with respect thereto (except to the extent required by clause (iii)
                                                                    ------------
     below if the Agent shall elect to exercise its rights thereunder) in which
     event the Lessee's obligation to pay Basic Rent hereunder for periods
     commencing after the date of such sale shall be terminated or
     proportionately reduced, as the case may be; and/or (iii) if the Agent
     shall so elect, demand that the Lessee pay to the Agent, and the Lessee
     shall pay to the Agent, on the date of such sale, in lieu of Basic Rent
     accruing and due for periods commencing on or after the Payment Date
     coinciding with such date of sale (or, if the sale date is not a Payment
     Date, the Payment Date next preceding the date of such sale), an amount
     equal to (A) the excess, if any, of (1) the Lease Balance calculated as of
     such Payment Date (including all Rent due and unpaid to and including such
     Payment Date), over (2) the net proceeds of such sale (that is, after
     deducting all costs and expenses incurred by the Agent or any Lender(s)
     incident to such conveyance, including, without limitation, repossession
     costs, brokerage commissions, prorations, transfer taxes, fees and expenses
     for counsel, title insurance fees, survey costs, recording fees, and any
     repair costs), to the extent received by the Agent in good, collected and
     indefeasible funds; plus (B) interest at the Default Rate on the foregoing
     amount from such Payment Date until the date of payment;

          (d)  The Agent may, at its option, elect not to terminate this Master
     Lease with respect to the Equipment and continue to collect all Basic Rent,
     Supplemental Rent, and

                                      24
<PAGE>
 
     all other amounts due the Agent on behalf of the Lessor pursuant to the
     Assignment of Lease and Rent (together with all costs of collection) and
     enforce the Lessee's obligations under this Master Lease as and when the
     same become due, or are to be performed. In addition, at the option of the
     Agent, upon any abandonment of any of the Equipment by the Lessee or
     repossession of same by the Agent, the Agent may, in its sole and absolute
     discretion, elect not to terminate this Master Lease and may make the
     necessary repairs in order to relet such Equipment, and relet the Equipment
     or any part thereof for such term or terms (which may be for a long term
     extending beyond the Lease Term of this Master Lease) and at such rental or
     rentals and upon such other terms and conditions as the Agent in its
     reasonable discretion may deem advisable. Upon each such reletting all net
     rentals actually received by the Agent from such reletting in good,
     collected and indefeasible funds shall be applied to the Lessee's
     obligations hereunder and the other Operative Documents in such order,
     proportion and priority as the Agent may elect in the Agent's sole and
     absolute discretion. If such net rentals received from such reletting
     during any period in good, collected and indefeasible funds are less than
     the Rent with respect to such item of the Equipment to be paid during that
     period by the Lessee hereunder, the Lessee shall pay any deficiency, as
     calculated by the Agent, to the Agent on the next Payment Date;

          (e)  Unless all of the Equipment has been sold in its entirety, the
     Agent may, whether or not the Agent shall have exercised or shall
     thereafter at any time exercise any of its rights under clauses (b), (c) or
                                                             -----------  ---   
     (d) of this Section 16.2 with respect to any of the Equipment or any
     ---         ------------                                            
     portions thereof, demand, by written notice to the Lessee specifying a date
     (a "Termination Date") not earlier than twenty (20) days after the date of
         ----------------                                                      
     such notice, that the Lessee purchase, on such Termination Date, all unsold
     Equipment and all unsold portions of the Equipment for an amount equal to
     the Lease Balance in accordance with the provisions of Section 18.2;
                                                            ------------ 
          (f)  The Agent may exercise any other right or remedy that may be
     available to it under Applicable Law (including, without limitation, under
     Article 9 of the Uniform Commercial Code), or proceed by appropriate court
     action (legal or equitable) to enforce the terms hereof or to recover
     damages for the breach hereof. Separate suits may be brought to collect any
     such damages for any period(s), and such suits shall not in any manner
     prejudice the Agent's right to collect any such damages for any subsequent
     period(s), or the Agent may defer any such suit until after the expiration
     of the Lease Term, in which event such suit shall be deemed not to have
     accrued until the expiration of the Lease Term;

          (g)  The Agent may retain and apply against the Lease Balance all sums
     which the Agent would, absent such Lease Event of Default, be required to
     pay to, or turn over

                                      25
<PAGE>
 
     to, the Lessee pursuant to the terms of this Master Lease or any of the
     other Operative Documents;

          (h)  The Agent, as a matter of right and without notice to the Lessee,
     shall have the right to apply to any court having jurisdiction to appoint a
     receiver or receivers of any of the Equipment, and the Lessee hereby
     irrevocably consents to any such appointment.  Any such receiver(s) shall
     have all of the usual powers and duties of receivers in like or similar
     cases and all of the powers and duties of the Agent in case of entry, and
     shall continue as such and exercise such powers until the date of
     confirmation of the sale of such item of the Equipment unless such
     receivership is sooner terminated; or

          (i)  The Agent shall be entitled to enforce payment of the
     indebtedness and performance of the obligations secured hereby and to
     exercise all rights and powers under this instrument or under any of the
     other Operative Documents or other agreement or any laws now or hereafter
     in force, notwithstanding some or all of the obligations secured hereby may
     now or hereafter be otherwise secured, whether by security agreement,
     pledge, lien, assignment or otherwise.

Neither the acceptance of this instrument nor its enforcement, shall prejudice
or in any manner affect the Agent's right to realize upon or enforce any other
security now or hereafter held by the Agent, it being agreed that the Agent
shall be entitled to enforce this instrument and any other security now or
hereafter held by the Agent in such order and manner as the Agent may determine
in its absolute discretion.  No remedy herein conferred upon or reserved to the
Agent is intended to be exclusive of any other remedy herein or by law provided
or permitted, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute.  Every power or remedy given by any of the Operative Documents to
the Agent or to which it may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by the Agent.  In no event shall the Agent, in the exercise of the
remedies provided in this instrument (including, without limitation, in
connection with the assignment of rents to Agent, or the appointment of a
receiver and the repossession by such receiver of all or any part of the
Equipment), be deemed a "mortgagee in possession," and the Agent
shall not in any way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.

          (k)  Without limitation of the foregoing, at the direction of either
     the Required Equity Lenders or the Required Financing Lenders, the Agent
     may, on behalf of the Lessor, demand the purchase of the Equipment by the
     Lessee pursuant to Section 18.3 of this Master Lease.
                        ------------                      

If, pursuant to the exercise by the Agent of its remedies pursuant to this
Section 16.2, the Lease Balance and all other amounts due and owing from the
------------                                                                
Lessee under this Master Lease and the

                                      26
<PAGE>
 
other Operative Documents have been paid in full, then the Lessor shall remit to
the Lessee any excess amounts received by the Lessor.

     16.3 Waiver of Certain Rights.  If this Master Lease shall be terminated
          ------------------------                                           
pursuant to Section 16.2, the Lessee waives, to the fullest extent permitted by
            ------------                                                       
law, (a) any notice of repossession or the institution of legal proceedings to
obtain repossession; (b) any right of redemption, re-entry or repossession; (c)
the benefit of any laws now or hereafter in force exempting the Lessee from
liability for rent or for debt or limiting the Lessor with respect to the
election of remedies; (d) any other rights which might otherwise limit or modify
any of the Lessor's rights or remedies under this Article XVI; and (e) to the
                                                  -----------                
maximum extent permitted by law, the Lessee hereby further waives the benefit of
any appraisement, valuation, stay, extension, reinstatement and redemption laws
now or hereafter in force and all rights of marshaling in the event of any sale
of any Equipment or any interest therein.

     16.4 Security Interest and Foreclosure.
          --------------------------------- 

          (a)  The Lessee hereby grants to the Lessor a security interest in and
     to all of the Equipment, together with (i) all other items of equipment
     hereafter made part of the Collateral hereunder, wherever located, whether
     now owned or existing or hereafter owned, existing, acquired or arising,
     and whether in the Lessee's, the Agent's, any Lender's or any other
     person's or entity's possession or control, including, without limitation,
     all Substituted Equipment under Section 6.3 of the Participation Agreement,
                                     -----------                                
     (ii) all apparatus, warranties, guaranties, contract rights, claims,
     intangible rights relating thereto, (iii) all Modifications, accessories,
     replacements, and substitutions therefor, (iv) all general intangibles
     arising therefrom or in connection therewith, (v) all proceeds therefrom,
     and (vi) all other property which the Lessee may hereafter become entitled
     to receive on account of the Equipment (collectively, the "Collateral"), to
                                                                ----------      
     secure the payment of the Equipment Balance and all other amounts payable
     hereunder and under the Operative Documents in connection therewith.  Upon
     the occurrence of any Lease Event of Default, the Lessor shall have the
     power and authority, to the extent provided by law, after proper notice and
     lapse of such time as may be required by law, to sell such Collateral at
     the time and place of sale fixed by the Lessor in such notice of sale,
     either as a whole, or in separate lots or parcels or items and in such
     order as the Lessor may elect, at auction to the highest bidder for cash in
     lawful money of the United States payable at the time of sale.  Without
     limitation of the foregoing, the Lessor shall have all of the rights,
     remedies and recourses with respect to the Equipment afforded a secured
     party by the Uniform Commercial Code of the State of Texas and of each
     state in which the Equipment is situated; and such rights, remedies and
     recourses shall be in addition to, and not in limitation of, all other
     rights, remedies and recourses afforded by this Master Lease and the
     Operative Documents and at law and in equity.  Additionally, upon the
     occurrence of a Lease Event of Default, the Lessor, in lieu of or in
     addition to exercising any power of sale hereinabove given, may proceed by
     a suit

                                      27
<PAGE>
 
     or suits in equity or at law, whether for a foreclosure hereunder, or for
     the sale of the Collateral, or against the Lessee on a recourse basis for
     the Lease Balance, or for the specific performance of any covenant or
     agreement herein contained or in aid of the execution of any power herein
     granted, or for the appointment of a receiver pending any foreclosure
     hereunder or the sale of the Equipment, or for the enforcement of any other
     appropriate legal or equitable remedy.

          (b)  The Lessee shall execute and deliver to the Lessor, in form and
     substance satisfactory to the Lessor, such financing statements and further
     assurances as the Lessor may, from time to time, consider reasonably
     necessary to create, perfect and preserve the Lessor's security interest in
     the Collateral hereunder, and the Lessor may cause such statements and
     assurances to be recorded and filed at such times and places as may be
     required or permitted by law to so create, perfect and preserve such
     security interest.  Pursuant to the Uniform Commercial Code of the State of
     Texas and of each state in which the Equipment is situated, this Master
     Lease shall be effective as a Financing Statement.  The address of the
     Lessor, as Secured Party, and the Lessee, as Debtor, are as set forth
     herein.  The security interest herein granted shall not obligate the Agent,
     any Lender or the Lessor in any manner whatsoever with respect to the
     Equipment or other Collateral, or require the Agent, any Lender or the
     Lessor to take any other action, incur any expenses or perform or discharge
     any obligation, duty or liability whatsoever.  Upon any Lease Event of
     Default, at the request of the Lessor, the Lessee shall gather all of the
     Equipment at a location designated by the Lessor for sale pursuant to the
     terms hereof.  Within ten (10) days following the Lessee's receipt of
     written request from the Lessor, the Lessee shall prepare and deliver to
     the Lessor a written inventory specifically listing all of the Collateral,
     which inventory shall be certified by a Responsible Officer of the Lessee
     as being true, correct and complete.

                                 ARTICLE XVII
                            LESSOR'S RIGHT TO CURE

     17.1 The Lessor's Right to Cure the Lessee's Lease Defaults. The Lessor
          ------------------------------------------------------              
and/or the Agent, without waiving or releasing any obligation or Lease Event of
Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of the Lessee,
including the failure by the Lessee to maintain the insurance required by
Article XIII, and may, to the fullest extent permitted by law, and
------------                                                      
notwithstanding any right of quiet enjoyment in favor of the Lessee, repossess
any of the Equipment for such purpose and take all such action thereon as may be
necessary or appropriate therefor. No such repossession shall be deemed a
termination of this Master Lease. All reasonable out-of-pocket costs and
expenses so incurred (including fees and expenses of counsel), together with
interest thereon at the Default Rate from the date on which such sums or
expenses are paid by the Lessor, shall be paid by the Lessee to the Lessor or
the Agent, as the case may be, as Supplemental Rent.

                                      28
<PAGE>
 
                                 ARTICLE XVIII
                              PURCHASE PROVISIONS

     18.1 Option to Purchase all of the Equipment.  Subject to the conditions
          ---------------------------------------                            
contained herein, and without limitation of the Lessee's purchase obligation
pursuant to Sections 18.2 or 18.3, the Lessee shall have the option on any
            -------------    ----                                         
Business Day to purchase all, but not less than all, of the Equipment subject to
this Master Lease at a price equal to the Lease Balance on the date of such
purchase.  The Lessee's exercise of its option pursuant to this Section 18.1
                                                                ------------
shall be subject to the following conditions:

     (i)  the Lessee shall have delivered a Purchase Notice to the Lessor not
less than ten (10) days prior to such purchase, specifying the date of such
purchase; and

     (ii) no Lease Event of Default shall have occurred and be continuing.

If the Lessee exercises its option pursuant to this Section 18.1 then, upon the
                                                    ------------               
Lessor's receipt of all amounts due in connection therewith, the Lessor shall
transfer to the Lessee or its designee all of the Lessor's right, title and
interest in and to all of the Equipment in accordance with the procedures set
forth in Section 21.1(a) hereof, such transfer to be effective as of the date
         ---------------                                                     
specified in the Purchase Notice.

     18.2 Expiration Date Purchase Obligation.  Unless (a) the Lessee shall have
          -----------------------------------                                   
properly exercised its option pursuant to Section 18.1 and purchased all of the
                                          ------------                         
Equipment pursuant thereto, or (b) the Lessee shall have properly exercised the
Remarketing Option and shall have fulfilled all of the conditions of clauses (a)
                                                                     -----------
through (l) of Section 20.1 hereof and the Lessor shall have sold its interest
        ---    ------------                                                   
in all of the Equipment pursuant thereto, then, subject to the terms, conditions
and provisions set forth in this Article XVIII, and in accordance with the terms
                                 -------------                                  
of Section 21.1(a) hereof, the Lessee shall purchase from the Lessor, and the
   ---------------                                                           
Lessor shall convey to the Lessee, on the Expiration of the Lease Term all of
the Lessor's interest in all of the Equipment for an amount equal to the Lease
Balance.  The Lessee may designate, in a notice given to the Lessor not less
than ten (10) days prior to the closing of such purchase (time being of the
essence), the transferee or transferees to whom the conveyance shall be made (if
other than to the Lessee), in which case such conveyance shall (subject to the
terms and conditions set forth herein) be made to such designee; provided,
                                                                 -------- 
however, that such designation of a transferee or transferees shall not cause
-------                                                                      
the Lessee to be released, fully or partially, from any of its obligations under
this Master Lease; including, without limitation, the obligation to
pay the Lessor the Lease Balance on such Expiration Date, nor shall such
designation convey or be deemed to convey to such designee any rights, title,
interest or Claim against or with respect to any of the Equipment.

     18.3 Acceleration of Purchase Obligation.
          ----------------------------------- 

                                      29
<PAGE>
 
          (a)  The Lessee shall be obligated to purchase for an amount equal to
     the Lease Balance, the Lessor's interest in all of the Equipment
     (notwithstanding any prior election to exercise its Purchase Option
     pursuant to Section 18.1) (i) automatically and without notice upon the
                 -------------                                              
     occurrence of any Lease Event of Default specified in clauses (h) or (i) of
                                                           -----------    ---   
     Section 11.1 of the Mail-Well Credit Agreement and (ii) as provided for at
     ------------                                                              
     Section 16.2(e) immediately upon written demand of the Lessor upon the
     ---------------                                                       
     occurrence of any other Lease Event of Default.

          (b)  The Lessee shall be obligated to purchase for an amount equal to
     the Lease Balance (including without limitation all other amounts owing in
     respect of Rent, including Supplemental Rent, theretofore accruing),
     immediately upon written demand of the Lessor, the Lessor's interest in all
     of the Equipment at any time during the Lease Term when (i) the Lessor
     ceases to have title as contemplated by Section 11.1 or (ii) any related
                                             ------------                    
     Operative Document to which the Lessee is a party shall cease to be in full
     force and effect, or shall cease to give the Lenders the Liens, rights,
     powers and privileges purported to be created thereby.

          (c)  Any purchase under this Section 18.3 shall be in accordance with
                                       ------------                            
     Article XXI.
     ----------- 

                                  ARTICLE XIX
                                  INDEMNITIES

     19.1 GENERAL INDEMNITY.  THE LESSEE HEREBY ASSUMES AND AGREES TO INDEMNIFY,
          -----------------                                                     
PROTECT, SAVE, AND KEEP HARMLESS THE LESSOR, THE LENDERS AND THEIR RESPECTIVE
AGENTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, INJURIES,
CLAIMS, ALLEGATIONS, DEMANDS, EXPENSES, INCLUDING LEGAL EXPENSES, OR
LIABILITIES, INCLUDING NEGLIGENCE, TORT AND STRICT LIABILITY, OF WHATSOEVER KIND
AND NATURE, IN ANY WAY RELATING TO, OR ARISING OR ALLEGED TO ARISE ON ACCOUNT
OF:  (I) THE PURCHASE, POSSESSION, MAINTENANCE, STORAGE, USE, CONDITION
(INCLUDING WITHOUT LIMITATION, LATENT AND OTHER DEFECTS AND WHETHER OR NOT
DISCOVERABLE BY THE LESSOR, THE LESSEE OR ANY LENDER, AND ANY CLAIM FOR PATENT,
TRADEMARK OR COPYRIGHT INFRINGEMENT) OR OPERATION OF ANY ITEM OF THE EQUIPMENT,
WHETHER ARISING PRIOR TO, DURING OR AFTER THE LEASE TERM WITH RESPECT TO ALL OR
ANY PART OF THE EQUIPMENT; (II) ANY CLAIMS BASED ON LIABILITY IN TORT,
NEGLIGENCE, NUISANCE, TRESPASS, WASTE, STRICT LIABILITY, OR BREACH OF
WARRANTIES; (III) ANY INJURY TO OR DEATH OF ANY PERSON OR ANY DAMAGE TO OR LOSS
OF PROPERTY ON OR NEAR THE EQUIPMENT; (IV) ANY VIOLATION BY LESSEE OF ANY
PROVISION OF THIS MASTER LEASE, ANY DOCUMENT MATERIAL THERETO (THE "RELATED
                                                                    -------
DOCUMENTS") OR OF ANY AGREEMENT, APPLICABLE LAW, RULE, REGULATION, ORDINANCE OR
---------
RESTRICTION AFFECTING OR APPLICABLE TO THE LESSEE, THE LESSOR (WITH RESPECT TO
THE EQUIPMENT), ANY OF THE EQUIPMENT OR THE LEASING, OWNERSHIP, USE,
REPLACEMENT, ADAPTATION OR MAINTENANCE THEREOF; (V) EACH AND EVERY CLAIM AND
LOSS ARISING OUT OF OR CONNECTED WITH ANY ENVIRONMENTAL VIOLATION OR THE RELEASE
OF ANY HAZARDOUS

                                       30
<PAGE>
 
MATERIAL; AND/OR (VI) THE LOSS, DAMAGE, DESTRUCTION, REMOVAL, RETURN, SURRENDER,
SALE OR OTHER DISPOSITION OF THE EQUIPMENT, OR ANY ITEM THEREOF, EXCEPT, IN EACH
SUCH CASE, WHERE SUCH LOSS, DAMAGE, INJURY, CLAIM, ALLEGATION, DEMAND, EXPENSE
(INCLUDING LEGAL EXPENSES OR LIABILITIES) IS DUE TO THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE LESSOR. THE FOREGOING INDEMNITIES SHALL REMAIN IN FULL
FORCE AND EFFECT DESPITE THE EXPIRATION, CANCELLATION OR EARLIER TERMINATION OF
THIS MASTER LEASE. THE INDEMNIFICATION SET FORTH IN THIS SECTION 19.1 SHALL
                                                         ------------
EXPRESSLY INDEMNIFY THE LESSOR, THE LENDERS AND THEIR RESPECTIVE AGENTS AND
EMPLOYEES AGAINST THEIR ORDINARY NEGLIGENCE.

     19.2 Impositions.
          ----------- 

          (a)  The Lessee shall pay, and indemnify and hold the Lessor harmless
     from and against, all Impositions, which may now or hereafter be imposed
     upon or with respect to any of:  (i) the ownership, leasing, sale,
     possession, use, purchase, operation, transfer of title, return or other
     disposition of the Equipment; (ii) the rental, receipts or earnings arising
     therefrom; (iii) this Master Lease or any of the Operative Documents, or
     (iv) any payment made pursuant to any of the foregoing or otherwise with
     respect to any of the transactions contemplated thereunder or upon any
     filing and/or recordation of the foregoing, which are payable for any
     period of time during which this Master Lease is in effect, whether payable
     by the Lessor or the Lessee under Applicable Law, including but not limited
     to (x) Impositions imposed on the purchase of the Equipment by the Lessor
     and the rental payments under this Master Lease, (y) personal property
     Impositions on the Equipment, and (z) Taxes imposed on any sale of the
     Equipment pursuant to this Master Lease.  The Lessee shall furnish to the
     Lessor evidence of the payment of such Impositions at the time paid by the
     Lessee, and shall provide the Lessor immediately upon receipt with a copy
     of all bills for such Impositions.  If the Lessee fails to pay any said
     Impositions, the Lessor shall have the right, but shall not be obligated,
     to pay the same, in which event the cost thereof shall be repayable to the
     Lessor on demand.  The Lessee's obligations hereunder shall survive and
     continue after the expiration, cancellation or termination of the Lease
     Term as to those Impositions and any related expenses incurred or accrued
     (or attributable to events occurring) during such Lease Term, or until the
     Equipment is returned to the Lessor in accordance with this Master Lease
     (if later).  If any taxing authority makes a claim against the Lessor
     which, if successful, would require the Lessee to indemnify the Lessor
     under this Section 19.2, the Lessee shall have the right in good faith to
                ------------                                                  
     contest such claim provided that the Lessor is protected from the
     consequences of any such contest in a manner satisfactory to the Lessor.
     The foregoing contest right shall not relieve the Lessee of any of its
     obligations under this Master Lease.

          (b)  The Impositions and the indemnification obligations of the Lessee
     hereunder shall expressly include and cover, without limitation, all Taxes
     arising as a result of this Master Lease and/or the ownership by Lessor of
     the Equipment which are based on net or gross income or net

                                      31
<PAGE>
 
     or gross receipts of any person, corporation, or other entity, including,
     without limitation, any United States federal or state income tax, any
     capital gains Taxes, any excess profits or conduct or business Taxes, or
     any withholdings or withholding Taxes.

          (c)  The Lessee will, where permitted to do so under applicable rules
     and regulations, make and timely file such reports and returns, including
     exemption certificates or affidavits with respect to any sales, use or
     other Imposition, in such manner as to show the Lessee and not the Lessor
     as the owner of the Equipment, and as shall be satisfactory to the Lessor
     or, where not so permitted, will notify the Lessor of such requirement and
     will prepare and deliver such reports or returns to the Lessor for filing
     within a reasonable time prior to the time such reports are to be filed.
     All costs and expenses (including reasonable legal and accountants, fees
     and disbursements) of preparing any such report or returns shall be borne
     by the Lessee.

                                  ARTICLE XX
                              REMARKETING OPTION

     20.1 Option to Remarket.  Subject to the fulfillment of each of the
          ------------------                                            
conditions set forth in this Section 20.1, the Lessee shall have the option (the
                             ------------                                       
"Remarketing Option") to market and complete the sale of all of the Equipment
 ------------------                                                          
for the Lessor.  The Lessee's effective exercise and consummation of the
Remarketing Option shall be subject to the due and timely fulfillment of each of
the following provisions as to each item of the Equipment as of the dates set
forth below.

          (a)  Not later than twelve (12) months prior to the Expiration Date,
     the Lessee shall give to the Lessor written notice of the Lessee's exercise
     of the Remarketing Option, which exercise shall be irrevocable.

          (b)  Not later than three (3) months prior to the Expiration Date, the
     Lessee shall deliver to the Lessor an Environmental Audit for each item of
     the Equipment.  Such Environmental Audit shall be prepared by an
     environmental consultant selected by the Lessor in the Lessor's reasonable
     discretion and shall contain conclusions reasonably satisfactory to the
     Lessor as to the environmental status of the Equipment.  If any such
     Environmental Audit indicates any exceptions, the Lessee shall have also
     delivered prior to the Expiration Date a written statement by such
     environmental consultant concluding, to the satisfaction of the Agent, that
     all such exceptions have been remedied in compliance with Applicable Law.

          (c)  On the date of the Lessee's notice to the Lessor of the Lessee's
     exercise of the Remarketing Option, no Lease Event of Default or Lease
     Default shall exist, and thereafter, no Lease Event of Default or Lease
     Default shall exist.

                                      32
<PAGE>
 
          (d)  Subject to the provisions of this paragraph, the Lessee shall 
     have completed all Modifications, restoration and rebuilding of the
     affected Equipment pursuant to Sections 10.1 and 14.1 (as the case may be),
                                    -------------     ----
     without relying on any Permitted Contest to modify its obligations under
     this Paragraph 20.1(d), and shall have fulfilled all of the conditions and
     requirements in connection therewith pursuant to said Sections, in each
     case prior to the date on which the Lessor receives the Lessee's notice of
     the Lessee's intention to exercise the Remarketing Option (time being of
     the essence), regardless of whether the same shall be within the Lessee's
     control. In the event, however, that the Lessee has commenced any
     Modification, restoration or rebuilding of any affected Equipment but that
     such Modification, restoration or rebuilding has not been completed, the
     Lessee shall nevertheless have the right to exercise the Remarketing Option
     and shall, thereafter, complete such Modification, restoration or
     rebuilding promptly and without delay in accordance with the provisions of
     this Master Lease, and in any event not later than the date upon which the
     Lessee or the Lessor procures bids from one or more prospective purchasers.
     The Lessee shall have also paid the cost of all Modifications, restorations
     and rebuilding, commenced prior to the Expiration Date. The Lessee shall
     not have been excused pursuant to Section 12.1 from complying with the
                                       ------------                        
     requirements of this Section 20.1(d).

          (e)  During the Marketing Period, the Lessee shall, as nonexclusive
     agent for the Lessor, use its best efforts to sell the Lessor's interest in
     the Equipment and will attempt to obtain the highest purchase price
     therefor and for not less than the Fair Market Sales Value.

          (f)  The Lessee shall procure bids from one or more bona fide
     prospective purchasers and shall deliver to the Lessor and the Lenders not
     less than sixty (60) days prior to the Expiration Date a binding written
     unconditional (except as set forth below), irrevocable offer by such
     purchaser or purchasers offering the highest cash bid to purchase the
     Equipment (each, a "Conforming Bid").  No such purchaser shall be the
                         --------------                                   
     Lessee or any Subsidiary or Affiliate of the Lessee.  The written offer
     must specify the Expiration Date as the closing date unless the Lessor and
     the Lenders shall otherwise agree in their sole discretion.

          (g)  The Lessee shall submit all Conforming Bids to the Lessor and the
     Lenders, and the Lessor will have the right to submit any one or more bids.
     Any sale by the Lessee shall be for the highest cash Conforming Bid
     submitted to the Lessor.  The determination of the highest bid shall be
     made by the Lessor prior to the end of the Marketing Period.  All
     Conforming Bids shall be on an all-cash basis unless the Lessor and the
     Lenders shall otherwise agree in their sole discretion.

                                      33
<PAGE>
 
          (h)  In connection with any such sale of any of the Equipment, the
     Lessee will provide to the purchaser all customary seller's indemnities,
     representations and warranties regarding title, absence of Liens (except
     Lessor Liens) and the condition of such item of the Equipment; including,
     without limitation, an environmental indemnity to the extent the same
     are required by the purchaser.  The Lessee shall have obtained, at its cost
     and expense, all required governmental and regulatory consents and
     approvals and shall have made all filings as required by Applicable Law in
     order to carry out and complete the transfer of each of the Equipment.  As
     to the Lessor, any such sale shall be made on an "as is, with all faults"
     basis without representation or warranty by the Lessor other than the
     absence of Lessor Liens.  Any agreement as to such sale shall be made
     subject to the Lessor's rights hereunder.

          (i)  The Lessee shall pay directly, and not from the sale proceeds,
     all costs and expenses of the sale of the Equipment, whether incurred by
     the Lessor, the Agent or the Lessee, including without limitation, the cost
     of all environmental reports, appraisals, transfer taxes, the Lessor's
     reasonable attorneys' fees, the Lessee's attorneys' fees, commissions,
     escrow fees, recording fees, and all applicable documentary and other
     transfer taxes and other Impositions.

          (j)  The Lessee shall pay to the Agent on or prior to the Expiration
     Date (or in the case of Supplemental Rent, to the Agent for distribution in
     accordance with Operative Documents) an amount equal to the Loan Balance
     with respect to the Financing Loans plus all accrued and unpaid Rent
                                         ----                            
     (including Supplemental Rent, if any) and all other amounts hereunder which
     have accrued or will accrue prior to or as of the Expiration Date, in the
     type of funds specified in Section 3.4 hereof.
                                -----------        

          (k)  The Lessee shall pay to the Lessor on or prior to the Expiration
     Date the amounts, if any, required to be paid pursuant to Section 12.2 of
                                                               ------------   
     the Participation Agreement.

          (l)  The purchase of all of the Equipment shall be consummated on the
     Expiration Date and the gross proceeds (the "Gross Remarketing Proceeds")
                                                  --------------------------  
     realized from the sale of the Equipment (i.e., without deduction for any
     marketing, closing or other costs, prorations or commissions) shall be paid
     directly to the Agent; provided, however, that if the Gross Remarketing
                            --------  -------                               
     Proceeds actually received by the Agent in good, collected and indefeasible
     funds from such sale exceed the Lease Balance as of such date, then the
     excess shall be paid to the Lessee on the Expiration Date.

     If one or more of the foregoing provisions shall not be fulfilled as of the
date set forth above with respect to any of the Equipment, or if any of the
Equipment is not purchased as aforesaid, or if the conditions set forth in
Paragraph 9.1(c) or in Section 9.2 hereof have not been
----------------       -----------

                                      34
<PAGE>
 
satisfied in accordance with their terms, then the Agent shall declare by
written notice to the Lessee the Remarketing Option to be null and void (whether
or not it has been theretofore exercised by the Lessee) as to all of the
Equipment, in which event all of the Lessee's rights under this Section 20.1
                                                                ------------
shall immediately terminate as if never exercised and the Lessee shall be
obligated to purchase all of the Equipment pursuant to Section 18.2 on the
                                                       ------------
Expiration Date.

     Except as expressly set forth herein, the Lessee shall have no right, power
or authority to bind the Lessor in connection with any proposed sale of any of
the Equipment.

     20.2 Certain Obligations Continue.  During the Marketing Period, the
          ----------------------------                                   
obligation of the Lessee to pay Rent (including the installment of Rent due on
the Expiration Date) shall continue undiminished until payment in full of the
Loan Balance and all other amounts due to the Lessor with respect to the
Equipment under the Operative Documents to which the Lessee is a party.  The
Lessor or any Equity Lender shall have the right, but shall be under no duty, to
solicit bids, to inquire into the efforts of the Lessee to obtain bids or
otherwise to take action in connection with any such sale, in addition to the
other rights as expressly provided in this Article XX.
                                           ---------- 

                                  ARTICLE XXI
                PROCEDURES RELATING TO PURCHASE OR REMARKETING

     21.1 Provisions Relating to the Exercise of Purchase Option or Obligation
          --------------------------------------------------------------------
and Conveyance Upon Remarketing and Conveyance Upon Certain Other Events.
------------------------------------------------------------------------ 

          (a)  In connection with any termination of this Master Lease with
     respect to any of the Equipment pursuant to the terms of Article XV, in
                                                              ----------    
     connection with any purchase or in connection with the Lessee's purchase of
     any of the Equipment in accordance with Sections 18.1, 18.2, 18.3 or
                                             -------------  ----  ----   
     obligations under Section 16.2(e), then, upon the date on which this Master
                       ---------------                                          
     Lease is to terminate with respect to the applicable Equipment and upon
     tender by the Lessee of the amounts set forth in Article XV, Sections
                                                      ----------  --------
     16.2(e), 18.1, 18.2 or 18.3, as applicable in good, collected and
     -------  ----  ----    ----                                      
     indefeasible funds:

               (i)  the Lessor shall execute and deliver to the Lessee (or to
          the Lessee's designee) at the Lessee's cost and expense: a bill of
          sale with respect to the Lessor's rights, title and interests in such
          item of the Equipment in each case in conformity with local custom and
          free and clear of the security interest of the Lessor Security
          Agreement and any Lessor Liens attributable to the Lessor;

               (ii) such item of the Equipment shall be conveyed to the Lessee
          "AS IS" and in its then present physical condition, without
          representation, warranty or

                                      35
<PAGE>
 
          recourse of any kind or character whatsoever, and with the disclaimer
          set forth in Section 2.4 hereof; and
                       -----------        

               (iii)   the Lessor shall execute and deliver to the Lessee a
          statement of termination of this Master Lease, in each case to the
          extent such Operative Documents relate to such item of the Equipment,
          and shall use its best efforts to cause the Agent for the Financing
          Lenders to execute and deliver a release of the Assignment of Lease
          and Rent to the extent relating to such item of the Equipment.

          (b)  If the Lessee properly exercises the Remarketing Option, then the
     Lessee shall, on the Expiration Date, and at its own cost, transfer
     possession of all of the Equipment to the independent purchasers thereof
     or, if no sale has been consummated on or prior to the Expiration Date, to
     the Lessor, in each case by surrendering the same into the possession of
     the Lessor or such purchasers, as the case may be, free and clear of all
     Liens other than Lessor Liens and the lien of the Lessor First Security
     Agreement and the Lessor Second Security Agreement, in good condition (as
     modified by Modifications permitted by this Master Lease), ordinary wear
     and tear excepted, and in compliance with Applicable Law and the terms of
     this Master Lease (including without limitation Articles IX and XX).  The
                                                     -----------     --       
     Lessee shall, on and within a reasonable time before and up to one year
     after the Expiration Date, cooperate reasonably with the Agent, the Lessor,
     the Lenders and the independent purchasers of the Equipment in order to
     facilitate the purchase by such purchasers of the Equipment, which
     cooperation shall include the following, all of which the Lessee shall do
     on or before the Expiration Date or as soon thereafter as is reasonably
     practicable, (i) providing copies of all books and records regarding the
     maintenance and ownership of the Equipment and all know-how, data and
     technical information relating thereto, (ii) granting or assigning all
     licenses and permits necessary for the operation and maintenance of each
     item of the Equipment and cooperating reasonably in seeking and obtaining
     all necessary Governmental Action, and (iii) providing the originals of all
     warranties and guaranties relating to the Equipment and full assistance to
     the purchasers in connection with the enforcement of such warranties and
     guaranties.  The obligations of the Lessee under this paragraph shall
     survive the expiration or termination of this Master Lease.

                                 ARTICLE XXII
                             ESTOPPEL CERTIFICATES

     22.1 Estoppel Certificates.  At any time and from time to time upon not
          ---------------------                                             
less than ten (10) Business Days prior written request by the Lessor or the
Lessee (the "Requesting Party"), the other party (whichever party shall have
             ----------------                                               
received such request, the "Certifying Party") shall furnish to the Requesting
                            ----------------                                  
Party a certificate signed by an individual having the office of vice

                                      36
<PAGE>
 
president or higher in the Certifying Party certifying that this Master Lease is
in full force and effect (or that this Master Lease is in full force and effect
as modified and setting forth the modifications); the dates to which the Basic
Rent and Supplemental Rent have been paid; to the best knowledge of the signer
of such certificate, whether or not the Requesting Party is in default under any
of its obligations hereunder (and, if so, the nature of such alleged default);
and such other matters under this Master Lease as the Requesting Party may
reasonably request. Any such certificate furnished pursuant to this Article
                                                                    -------
XXII may be relied upon by the Requesting Party and any existing or prospective
----                                                                           
mortgagee, purchaser or lender, and any accountant or auditor, of, from or to
the Requesting Party (or any Affiliate thereof).

                                 ARTICLE XXIII
                            ACCEPTANCE OF SURRENDER

     23.1 Acceptance of Surrender.  No surrender to the Lessor of this Master
          -----------------------                                            
Lease or of all or any of the Equipment or of any part of any thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by the Lessor and, prior to the payment or performance of all
Obligations, the Lenders, and no act by the Lessor or the Lenders or any
representative or agent of the Lessor or the Lenders, other than a written
acceptance, shall constitute an acceptance of any such surrender.

                                 ARTICLE XXIV
                              NO MERGER OF TITLE

     24.1 No Merger of Title.  There shall be no merger of this Master Lease or
          ------------------                                                   
of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, in whole or in part,
(a) this Master Lease or the leasehold estate created hereby or any interest in
this Master Lease or such leasehold estate, or (b) a beneficial interest in the
Lessor.

                                  ARTICLE XXV
                             INTENT OF THE PARTIES

     25.1 Ownership of the Equipment.
          -------------------------- 

          (a)  As provided in Section 2.5(a) hereof, it is the intent of the
                              --------------                                
     parties hereto that (i) for financial accounting purposes with respect to
     the Lessee, the Lessor will be treated as the owner and lessor of the
     Equipment, and (ii) for purposes of federal, state and local income taxes
     and bankruptcy, the transaction contemplated hereby is a financing
     arrangement and preserves ownership of the Equipment in the Lessee.

                                      37
<PAGE>
 
          (b)  It is further the intent of the parties hereto that (i) the
     obligations of the Lessee under this Master Lease to pay Basic Rent and
     Supplemental Rent or the Lease Balance in connection with any purchase of
     the Equipment pursuant to this Master Lease shall be treated as payments of
     interest on and principal of, respectively, loans from the Lessor, the
     Equity Lenders and the Financing Lenders to the Lessee, and (ii) this
     Master Lease grants a security interest in and to the Equipment and other
     Collateral to the Lessor to secure Lessee's performance and payment of all
     amounts under this Master Lease and the other Operative Documents.


                                 ARTICLE XXVI
                                 MISCELLANEOUS

     26.1 Survival; Severability; Etc.  Anything contained in this Master Lease
          ---------------------------                                          
to the contrary notwithstanding, all claims against and liabilities of the
Lessee or the Lessor arising from events commencing prior to the expiration or
earlier termination of this Master Lease shall survive such expiration or
earlier termination for a period of one year except as to indemnification, which
shall continue to survive.  If any term or provision of this Master Lease or any
application thereof shall be declared invalid or unenforceable, the remainder of
this Master Lease and any other application of such term or provision shall not
be affected thereby.

     26.2 Amendments and Modifications.  Subject to the requirements,
          ----------------------------                               
restrictions and conditions set forth in the Participation Agreement, neither
this Master Lease nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing in recordable form signed by the
Lessor and the Lessee.

     26.3 No Waiver.  No failure by the Lessor or the Lessee to insist upon the
          ---------                                                            
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term.  To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Master Lease, and this Master
Lease shall continue in full force and effect with respect to any other then
existing or subsequent default.

     26.4 Notices.  All notices, demands, requests, consents, approvals and
          -------                                                          
other communications hereunder shall be in writing and directed to the address
described in, and deemed received in accordance with the provisions of Section
                                                                       -------
13.3 of the Participation Agreement.
----                                

     26.5 Successors and Assigns.  All the terms and provisions of this Master
          ----------------------                                              
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

                                      38
<PAGE>
 
     26.6 Headings and Table of Contents.  The headings and table of contents in
          ------------------------------                                        
this Master Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

     26.7 Counterparts.  This Master Lease may be executed in any number of
          ------------                                                     
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.

     26.8 GOVERNING LAW.  THIS MASTER LEASE SHALL BE GOVERNED BY, AND CONSTRUED
          -------------                                                        
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES, EXCEPT AS TO MATTERS RELATING TO THE
CREATION OF THE LEASEHOLD ESTATES HEREUNDER AND THE EXERCISE OF RIGHTS AND
REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE LOCATED. WITHOUT
LIMITING THE FOREGOING, IN THE EVENT THAT THIS MASTER LEASE IS DEEMED TO
CONSTITUTE A FINANCING, WHICH IS THE INTENTION OF THE PARTIES, THE LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, SHALL GOVERN THE
CREATION, TERMS AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED HEREBY, BUT THE
SECURITY INTEREST CREATED HEREBY AND THE CREATION AND THE ENFORCEMENT OF SAID
SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATES IN WHICH SUCH ESTATES ARE LOCATED.

     26.9 Limitations on Recourse.  The parties hereto agree that except as
          -----------------------                                          
specifically set forth in this Master Lease or in any other Operative Document,
Lessor shall have no personal liability whatsoever to the Lessee or its
respective successors and assigns for any claim based on or in respect of this
Master Lease or any of the other Operative Documents or arising in any way from
the transactions contemplated hereby or thereby and the recourse shall be solely
had against the Lessor's interest in the Equipment; provided, however, that
                                                    --------  -------      
Lessor shall be liable (a) for its own willful misconduct or gross negligence,
or (b) for any Tax based on or measured by any fees, commission or compensation
received by it for acting as the Lessor as contemplated by the Operative
Documents.  It is understood and agreed that, except as provided in the
preceding sentence: (i) the Lessor shall have no personal liability under any of
the Operative Documents as a result of acting pursuant to and consistent with
any of the Operative Documents; (ii) all obligations of the Lessor to the
Lessee, under this Master Lease or any other obligation or liability of the
Lessee under the Operative Documents, are solely nonrecourse obligations and
shall be enforceable solely against the interest of the Lessor of the Equipment;
and (iii) all such personal liability of the Lessor is expressly waived and
released as a condition of, and as consideration for, the execution and delivery
of the Operative Documents by Lessor.

                                      39
<PAGE>
 
     26.10 Original Lease.  The single executed original of this Master Lease
           --------------                                                    
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt thereof of the Agent on or following the
signature page thereof shall be the Original Executed Counterpart of this Master
Lease (the "Original Executed Counterpart").  To the extent that this Master
            -----------------------------                                   
Lease constitutes chattel paper, as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction, no security
interest in this Master Lease may be created through the transfer or possession
of any counterpart other than the Original Executed Counterpart.


                 [remainder of page left intentionally blank]

                                      40
<PAGE>
 
          IN WITNESS WHEREOF, the parties have caused this Master Lease be duly
executed and delivered as of the date first above written.


                                 LESSEE:

                                 MAIL-WELL I CORPORATION, a Delaware
                                 corporation


                                 By: __________________________________
                                 Name: ________________________________
                                 Title: _______________________________

                                      
                                      41
<PAGE>
 
                              LESSOR:

                              PARIBAS PROPERTIES, INC.,
                              a Delaware corporation


                              By: ____________________________________
                                    Edward V. Canale, President


                              By: ____________________________________
                                    Matthew J. Cooleen, Vice President



                                      42
<PAGE>
 
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.

Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date hereof.

                              PARIBAS PROPERTIES, INC.,
                              as Lessor


                              By: ____________________________________
                                    Edward V. Canale, President


                              By: ____________________________________
                                    Matthew J. Cooleen, Vice President

                                       43
<PAGE>
 
                                  EXHIBIT "A"
                                TO MASTER LEASE


                              EQUIPMENT SCHEDULE


Description of each item                                Purchase Price
      of Equipment                 Serial No.             Allocation
------------------------           ----------           --------------



                                      44
<PAGE>
 
                                  EXHIBIT "B"
                                TO MASTER LEASE


                        INSURANCE COVERAGE REQUIREMENTS
                      AND ALLOCATION OF EQUIPMENT BALANCE
                         TO EACH ITEM OF THE EQUIPMENT
                         -----------------------------

                                      45