ALLY CAPITAL CORPORATION
                                
                    Equipment Lease Agreement
                                
      THIS EQUIPMENT LEASE AGREEMENT is made as of the 6th day of
April,  1995  by and between ALLY CAPITAL CORPORATION  ("Lessor")
and ELECTROSOURCE, INC. ("Lessee").  All of the defined terms and
rules  of construction pertaining to this Lease are set forth  in
Section 17 hereof.

   1.  TERM AND RENT.

       (a) Lessor agrees to lease to Lessee, and Lessee agrees to
lease  from  Lessor, the Equipment described  in  each  Equipment
Schedule  to  be executed pursuant hereto.  This Lease  shall  be
effective from and after the date of execution hereof, whether or
not  any  Equipment Schedule has been entered  into,  and  as  an
inducement to Lessor to enter into this Lease, Lessee agrees that
it  shall,  pursuant to the terms hereof, be liable for,  subject
to,  undertake  or comply with, as the case may be,  all  of  the
representations, warranties, agreements, disclaimers, waivers and
indemnifications  made herein that pertain to Lessee  and  Lessor
generally,  or  to events that arise or occur in connection  with
transactions  that  the  parties  intend  to  document  under  an
Equipment  Schedule,  whether or not such Equipment  Schedule  is
ever effectively entered into, and any other provisions of any of
the  Lease Documents that may be necessary or appropriate for the
interpretation or enforcement of the foregoing.  The Term of this
Lease with respect to any item of the Equipment shall consist  of
the  Term  set forth in the Equipment Schedule relating  thereto;
and,  except as otherwise expressly provided herein Lessor's  and
Lessee's  respective rights and obligations thereunder (including
Lessee's  obligation to pay Basic Rent for the items of Equipment
described therein) shall commence and continue at all times  from
and  after  the  effective date thereof, and terminate  upon  the
expiration  of the Term thereof and Lessee's complete performance
of all of its obligations thereunder.
        (b) Lessee shall pay Lessor Basic Rent for the Equipment,
without  any  deduction  or setoff and without  prior  notice  or
demand,  in  the  aggregate amounts specified in  each  Equipment
Schedule,  and  Supplemental Rent, promptly as  such  Rent  shall
become due and owing.  In addition to each such payment of  Rent,
on  the  due date therefor, Lessee shall be liable for and  shall
pay  to  Lessor an Administrative Fee; provided, however, to  the
extent  such payment of Rent shall be received by Lessor in  good
collected  indefeasible funds on the due  date  therefor,  Lessee
shall be relieved of its obligation to pay the Administrative Fee
attributable to such Rent payment.  Lessee agrees that  it  shall
have no right to, and it shall not, pay any Rent prior to the due
date thereof.  Each equipment Schedule shall be and remain a non-
cancelable  net  lease, and Lessee shall not be entitled  to  any
abatement  or  reduction of Rent due thereunder for  any  reason.
Without limiting the foregoing, Lessee's obligation to pay  Rend,
and   to  otherwise  perform  its  obligations  under  the  Lease
Documents,  are  and  shall be absolute and unconditional  until,
with  respect to each Equipment Schedule, such Equipment Schedule
terminates in accordance with its terms and shall not be affected
by   any  circumstances,  happenings  or  events  whatsoever  and
whenever and howsoever occurring, including, any right of setoff,
counterclaim, recoupment, deduction, defense or other right which
Lessee may have against Lessor, the manufacturer or vendor of the
Equipment, or anyone else for any reason whatsoever.  If for  any
reason whatsoever, any Equipment Schedule shall be terminated  in
whole  or  in  part by operation of law or otherwise (other  than
pursuant  to  the  expiration  of  the  Term  of  the  applicable
Equipment  Schedule), Lessee nonetheless agrees to pay to  Lessor
an  amount equal to each payment of Rent at the time such payment
would  have become due and payable in accordance with  the  terms
hereof  had such Equipment Schedule not been terminated in  whole
or  in  part.   Rent  is  payable as and when  specified  in  the
Equipment  Schedule, or as otherwise provided herein, by  mailing
the  same  to  Lessor at its address specified pursuant  to  this
Lease;  and  shall  be  effective upon  receipt.   Timeliness  of
Lessee's  payment and other performance of its obligations  under
the Lease Documents is of the essence.

Notwithstanding  anything in this Section 1(b) to  the  contrary,
Lessee  shall be entitled to a credit in an amount equal  to  the
Abatement Amount against its obligation to pay Basic Rent for any
item(s)  of  Equipment suffering an Impairment of Use conditioned
upon  the  following:   (A) Lessee provides Lessor  with  written
notice  of such Impairment of Use within two business days  after
having  written  notice  or actual knowledge  thereof  (whichever
occurs  first),  with  a full and complete  description  of  such
Impairment  of Use, including the nature and extent thereof,  and
(B)  Lessee  provides  to Lessor all  necessary  and  appropriate
cooperation   with   respect  to  Lessor's  or   its   designee's
investigation,  replacement, curing action or other  action  with
respect  to  such  Impairment  of Use.   In  furtherance  of  the
foregoing,  Lessee (i) agrees that in the event  Lessor  replaces
any item of Equipment with Replacement Equipment, Lessor shall be
deemed  to have cured any Impairment of Use with respect to  such
replaced  items of Equipment, on and as of the date  of  Lessee's
acceptance  of such Replacement Equipment; (ii) shall  execute  a
supplement   to   the  appropriate  Equipment  Schedule   thereby
substituting the Replacement Equipment for such replaced item  of
Equipment; (iii) shall without further action be deemed  to  have
conveyed  to Lessor good title, free and clear of all  Liens,  to
any  item of Equipment replaced pursuant hereto or for which  the
Abatement Period pertaining thereto extends to the expiration  of
the  Term  of  the Equipment Schedule, by making it available  to
Lessor  and (iv) shall execute and deliver to Lessor  a  bill  of
sale pertaining thereto that is acceptable to Lessor.

    2.   REPRESENTATIONS,  WARRANTIES AND  COVENANTS  OF  LESSEE.
Lessee  represents, warrants and covenants that:   (a)  It  is  a
corporation duly organized and validly existing in good  standing
under the laws of the state of Delaware, is duly qualified to  do
business  in  all jurisdictions where failure to be so  qualified
would  have a material adverse effect on the financial condition,
business  or  operations of Lessee, or impair the enforcement  of
its  obligations under the Lease Documents.  (b)  The  execution,
delivery  and  performance of the Lease Documents and  compliance
with  the  terms thereof:  (i) have been duly authorized  by  all
necessary  corporate action on the part of Lessee;  (ii)  do  not
require the approval of any stockholder, trustee or holder of any
obligations of Lessee except such as have been duly obtained; and
(iii)  do  not  and will not contravene any Law, now  binding  on
Lessee, or the charter or by-laws of Lessee under, any indenture,
mortgage, contract or other agreement to which Lessee is a  party
or  by  which  it  or  its property is  bound.   (c)   The  Lease
Documents,  when entered into, will constitute legal,  valid  and
binding  obligations  of Lessee, enforceable  against  Lessee  in
accordance  with  the terms thereof.  (d) There  are  no  pending
actions or proceedings to which Lessee is a party, and there  are
no  other  pending or threatened actions or proceedings of  which
Lessee  has  knowledge, before any Government  Authority,  which,
either  individually or in the aggregate, would adversely  affect
the  financial condition of Lessee, or the ability of  Lessee  to
perform  its obligations under, or comply with the terms of,  the
Lease  Documents.   (e_  Lessee  is  not  in  default  under  any
obligation  for the payment of borrowed money, for  the  deferred
purchase  price of property or for the payment of any rent  under
any   lease  agreement  which,  either  individually  or  in  the
aggregate, would have the same such effect.  (f)  With respect to
the  Equipment  covered  by each Equipment  Schedule,  under  the
Applicable Laws of the state(s) in which such Equipment is to  be
located, such Equipment consists solely of personal property  and
not fixtures.  (g)  The financial statements of Lessee (copies of
which  have  been  furnished to Lessor)  have  been  prepared  in
accordance  with  GAAP,  and  fairly present  Lessee's  financial
conditions  and the results of its operations as of the  date  of
and for the period covered by such statements, and since the date
of  such statements there has been no material adverse change  in
such conditions or operations.  (h) The address stated below  the
signature  of  Lessee is the chief place of  business  and  chief
executive office (which terms shall have the meanings provided in
Article  9  of the Code) of Lessee; and Lessee does  not  conduct
business  under  a trade, assumed or fictitious name.   (i)  With
respect  to  the  Equipment covered by each  Equipment  Schedule,
Lessor  will  have  a valid, perfected, first  priority  security
interest  in  such  Equipment pursuant  to  the  Code  and  other
Applicable Law upon its purchase of such Equipment and its filing
all  of the UCCs executed by Lessee in connection therewith.  (j)
With respect hereto and to each Equipment Schedule, Less has  not
permitted,  and  will not permit, any person  to  engage  in  any
activity  that could result in the imposition of liability  under
Applicable Law on Lessee, Lessor or any owner or operator of  the
Equipment,  or  would otherwise impair Lessor's rights  or  title
pertaining thereto.

    3.   FINANCIALS,  FURTHER  ASSURANCES  AND  NOTICES.   Lessee
covenants  and agrees as follows:  (a) Lessee will, if  requested
by  Lessor,  furnish Lessor (i) within one hundred  twenty  (120)
days after the end of each fiscal year of Lessee, a balance sheet
of  Lessee  as at the end of such year, and the related statement
of  income and statement of cash flows of Lessee for such  fiscal
year,  prepared in accordance with GAAP, all in reasonable detail
and  certified  by  independent certified public  accountants  of
recognized  standing selected by Lessee;  (ii) within  sixty  (0)
days  after  the end of each quarter of Lessee's fiscal  year,  a
balance  sheet of Lessee as at the end of such quarter,  and  the
related statement of income and statement of cash flows of Lessee
for  such  quarter, prepared in accordance with GAAP;  and  (iii)
within  thirty (30) days after the date on which they are  filed,
all regular periodic reports, forms and other filings required to
be  made by Lessee to the Securities and Exchange Commission,  if
any.  (b) Lessee will promptly execute and deliver to Lessor such
further  documents,  instruments and  assurances  and  take  such
further action as Lessor from time to time may reasonably request
in order to carry out the intent and purpose of this Lease and to
establish and protect the rights and remedies created or intended
to  be created in favor of Lessor under the Lease Documents.  (c)
Lessee  shall provide written notice to Lessor:  (i) thirty  (30)
days  prior to any contemplated change in the name or address  of
Lessee;  (ii)  promptly upon the occurrence  of  any  default  or
Default;  and (iii) promptly upon the commencement of proceedings
under  Federal bankruptcy laws or any other insolvency  laws  (as
now or hereafter in effect) involving Lessee or any person (other
than  Lessor)  holding  an interest in the Equipment  or  related
property as the debtor.

    4.   CONDITIONS PRECEDENT.  Lessor's obligations  under  each
Equipment Schedule, including Lessor's obligation to purchase and
participate  in  the  financing of any  Equipment  to  be  leased
thereunder, are conditioned upon:  (a) Lessor having received, at
least  two (2) business days prior to the date upon which  Lessor
purchases  the  Equipment or has committed to purchase  same  (if
sooner),  all of the following in form and substance satisfactory
to  Lessor:  (i) evidence as to due compliance with the insurance
provisions hereof; (ii) UCCs and all other filings and recordings
with  respect  to the transactions contemplated thereunder  which
are  necessary or appropriate to establish, protect,  perfect  or
give  first  priority to Lessor's title in the  Equipment  leased
thereunder;  (iii)  if  requested by  Lessor,  a  certificate  of
Lessee's Secretary certifying:  (1) resolutions of Lessee's Board
of  Directors duly authorizing the leasing of the Equipment under
such   Equipment  Schedule  and  the  execution,   delivery   and
performance thereof and of all related Lease Documents,  and  (2)
the  incumbency and specimen signatures of the officers of Lessee
authorized  to  execute such documents;   (iv)  if  requested  by
Lessor,  an  opinion of counsel for Lessee  as  to  each  of  the
matters  set  forth in subsections (a) through  (i)  (other  than
subsection  (g))  of  Section 2 hereof;  (v)  the  only  manually
executed original of such Equipment Schedule and all other  Lease
Documents;  (vi)  to the extent requested by  Lessor,  copies  or
reports  of  searches  conducted at the  appropriate  recordation
offices  against Lessee, the Equipment and premises at which  the
Equipment  is  or is to be located; (vii) a copy of  an  executed
bill of sale to Lessor for the Equipment together with an invoice
of  the  seller  thereof specifying the purchase price  for  such
Equipment;  (viii)  all  Purchase  Documents  pertaining  to  the
Equipment,   and,  to  the  extent  requested   by   Lessor,   an
acknowledgment and assignment of Lessee's rights, if  any,  under
such  Purchase Documents, including all warranties,  indemnities,
licenses,  remedies  and  other rights thereunder,  which  Lessor
shall be entitled to exercise in connection with its exercise  of
its  remedies under Section 15 of this Lease; (iv) if  Lessor  is
purchasing  the  Equipment  from Lessee,  all  of  the  operating
records  pertaining to the maintenance and use of the  Equipment;
and   (x)   such   other   documents,  agreements,   instruments,
certificates,  opinions,  assurances, as  Lessor  may  reasonably
require.
       (b)   (i)   The representations and warranties  of  Lessee
herein or in any of the other Lease Documents, and of each  other
person  (other  than  Lessor) in any of the  other  documents  or
agreements  delivered to Lessor pursuant hereto or thereto  shall
be  true  and  correct on and as of the effective  date  of  such
Equipment Schedule with the same effect as though made on and  as
of  such  date (Lessee's execution and delivery of the  Equipment
Schedule  shall  constitute an acknowledgment of the  same);  and
(ii) there shall be no default or Default under the
Equipment Schedule or any other Lease Documents, nor shall  there
have  occurred any casualty or Total Loss, or even  or  condition
which  with  notice or passage time, or both, would constitute  a
casualty or Total Loss with respect to the equipment to be leased
under the Equipment Schedule.
       (c)   (i)   Lessor shall be permitted under all Applicable
Laws  to  purchase  and  provide  financing  to  Lessee  for  the
Equipment and to enter into the transactions contemplated  herein
and in the Equipment Schedule; and (ii) there shall have been  no
change  in Law or proposed change in Law or in Lessee's financial
condition which could make it inadvisable for Lessor to do so, in
Lessor's sole discretion.
      (d)  (i) If Lessor is purchasing the Equipment from Lessee,
Lessee shall have paid all amounts due to the Supplier (including
any  vendor or manufacturer) and to any other persons  from  whom
Lessee acquired any right, title or interest in the Equipment, or
with  respect to any improvements thereon, additions thereto,  or
transportation or storage thereof, on or prior to  the  effective
date  of  the Equipment Schedule; (ii) the Equipment  shall  have
been delivered to and accepted by Lessee, and be in the condition
and  repair required hereby; and (iii) Lessor shall have received
a  bill  of  sale from the Supplier, on or prior to the effective
date  of  the  Equipment  Schedule, that  is  valid  and  legally
binding,  and  effective to convey to Lessor good  title  to  the
Equipment to be leased thereunder, free and clear of any Lien.

   5. DELIVERY INSPECTION AND ACCEPTANCE BY LESSEE.  Lessee shall
provide  an  acceptable installation environment as specified  in
any  applicable manufacturer's manual or by Applicable Law,  and,
except as otherwise specified by manufacturer, shall furnish  all
labor  required to install the Equipment.  Upon delivery,  Lessee
shall  inspect the Equipment and, if the same is found to  be  in
good  order  and  in  compliance  with  the  provisions  of   any
applicable  Supply  Contract, accept delivery  of  the  same  and
execute and deliver to Lessor an Equipment Schedule containing  a
complete  description  of  the accepted  Equipment.   The  Lessee
acknowledges  that its execution and delivery  of  any  Equipment
Schedule  shall  constitute conclusive evidence that  as  between
Lessor  and  Lessee, the Equipment shall be deemed to  have  been
finally and irrevocably accepted by Lessee pursuant to this Lease
and such Equipment Schedule.  Lessor shall not be liable for loss
or  damage  occasioned  by any cause, circumstance  or  event  of
whatsoever  nature relating to delivery, inspection, installation
or  acceptance,  including the failure of or delay  in  delivery,
delivery  to  the wrong place, delivery of improper equipment  or
property  other  than  the Equipment, damage  to  the  Equipment,
governmental   regulations,  strike,  embargo  or  other   cause,
circumstance  or  event, whether of like or unlike  nature.   All
expenses  incurred in connection with Lessor's  purchase  of  the
Equipment  (including taxes, shipment, delivery and installation)
shall  be  the responsibility of Lessee and shall be  either,  at
Lessor's  sole option, capitalized or expensed or paid by  Lessee
upon  demand.   If  as a result of any damage to  the  Equipment,
strike,  embargo or other similar cause certified  to  Lessor  in
writing  by Lessee's responsible officer and verified to Lessor's
satisfaction  by such other evidence relating thereto  as  Lessor
may reasonably request, Lessee shall refuse to accept delivery of
the  Equipment,  Lessee will be assigned  all  rights  and  shall
assume,  indemnify and hold Lessor harmless from all  obligations
as  purchaser  of  the  Equipment and all other  Claims  relating
thereto pursuant to Section 13 hereof.

    6.  USE  AND  MAINTENANCE.   (a) Lessee  shall  (i)  use  the
Equipment solely in the conduct of its business, for the  purpose
for  which  the Equipment was designed, in a careful  and  proper
manner  and  not discontinue use of the Equipment; (ii)  operate,
maintain,  inspect,  service,  repair,  overhaul  and  test   the
Equipment,  and  maintain all records, logs and  other  materials
relating  thereto,  in accordance with (1)  all  maintenance  and
operating  manuals or service agreements, whenever  furnished  or
entered  into, including any subsequent amendments,  supplements,
renewals  or replacements thereof, issued by the manufacturer  or
service   provider,  (2)  the  requirements  of  all   applicable
insurance policies, (3) the Purchase Documents, so as to preserve
all  of   Lessee's and Lessor's rights thereunder, including  all
rights  to  any  warranties,  indemnities  or  other  rights   or
remedies,  (4)  Applicable  Laws, and  (5)  consistent  with  the
prudent  practice of other similar companies in the same business
as  Lessee,  but  in any event, to no lesser standard  than  that
employed  by Lessee for comparable equipment owned or  leased  by
it;  (iii)  not change the location of any Equipment as specified
in  the  Equipment Schedule without the prior written consent  of
Lessor; (iv) not attach or incorporate the Equipment to or in any
other  item of equipment in such a manner that the Equipment  may
be  deemed to have become an accession to or a part of such other
item of equipment; (v) cause each principal item of the Equipment
to  be  continually marked, in a plain and distinct manner,  with
the  name of Lessor or its designee following by the words "Owner
and  Lessor," or other appropriate words designated by Lessor  on
labels  furnished by Lessor; and (vi) cause the Equipment  to  be
kept  and maintained in good operating condition and in the  same
condition  as  when  delivered to Lessee  hereunder,  except  for
ordinary   wear   and  tear  resulting  despite  Lessee's"   full
compliance  with  the  terms hereof.  With  respect  to  Lessee's
agreement in subclause (ii) above to maintain, inspect,  service,
repair,  overhaul and test each item of Equipment  in  accordance
with sub-subclauses (1,), (3) and (5), Lessee shall undertake and
be  responsible  for the foregoing in exchange for  a  credit  to
Lessee's  rental  obligations  the  amount  of  which  has   been
calculated  and agreed to by both Lessee and Lessor as  fair  and
complete consideration for such undertaking and responsibility as
it  may  now  and hereafter exist (including the payment  of  all
charges,   fees,  costs  and  expenses  relating  thereto),   and
accounted  for in the amount of Basic Rent Lessee has  agreed  to
pay  for such item of Equipment by its execution and delivery  of
the  Equipment Schedule relating thereto.  In furtherance of  the
foregoing,  Lessee acknowledges and agrees that  (A)  the  credit
provided  for  in  the preceding sentence shall  fully  discharge
Lessor for all purposes from performing or complying with any  of
the  obligations specified in such sentence (to the extent Lessor
would be deemed to have had any responsibility therefor), and (B)
it  shall also undertake, be responsible for and otherwise  fully
perform  and  comply  with  all of the obligations  provided  for
herein that are not specified in the preceding sentence, and that
it shall not be entitled to any credit or other compensation with
respect  thereto,  nor  shall Lessor have any  responsibility  to
Lessee or any other person with respect to the performance or non-
performance of, or compliance or non-compliance with, any of such
obligations, or any other obligations not expressly assumed by it
hereunder.
       (b)   If any parts of the Equipment become worn out, lost,
destroyed,   damaged  beyond  repair  or  otherwise   permanently
rendered unfit for use, Lessee, at its own expense, will within a
reasonable  time replace such parts with replacement  parts  that
are  free and clear of all Liens and have a value and utility  at
least  equal  to  the  value, condition  and  utility  that  such
replaced parts would have had if maintained in the condition  and
repair  required  by  the terms hereof.  In the  event  that  any
Applicable  Law  requires  alteration  or  modification  to   the
Equipment,  Lessee  will conform thereto  or  obtain  conformance
therewith,  and  shall otherwise cause the  altered  or  modified
Equipment to comply with the provisions hereof.  With respect  to
parts, additions or improvements which are added to the Equipment
that  are  essential  to  the operation  of  the  Equipment,  are
necessary to cause it to be in compliance with the provisions  of
this Lease or which cannot be detached from the Equipment without
materially  interfering with the operation of  the  equipment  or
adversely  affecting the value, condition and utility  which  the
Equipment  would  have  had without the addition  thereof,  title
thereto  shall immediately vest in Lessor to the same extent  and
with  the same priority as Lessor holds in the Equipment, without
cost  or  expense to Lessor, or any further action by  any  other
person, and such parts, improvement and additions shall be deemed
incorporated  in the Equipment and subject to the terms  of  this
Lease as if originally leased hereunder.  Lessor agrees that upon
Lessee's  replacing a part in full compliance with the provisions
of this subsection (b), all of Lessor's right, title and interest
in  and to any part so replaced shall without further action vest
in  Lessee  "AS  IS,  WHERE  IS," and otherwise  subject  to  the
provisions  of  Section  7 hereof.  Lessee  shall  not  make  any
material  alterations to the Equipment without the prior  written
consent  of  Lessor,  which  consent shall  not  be  unreasonably
withheld.
      (c)  Upon the twenty-four (24) hours' written or telephonic
request of Lessor, Lessee shall provide to Lessor any information
reasonably  requested by Lessor pertaining to  the  Equipment  or
Lessee,  including, the location and condition of the  Equipment.
Upon reasonable advance notice (which the parties agree shall  be
no  less  than  forty-eight  (48) hours'  written  or  telephonic
request)  Lessee shall afford Lessor access to Lessee's  premises
where the Equipment is located for the purpose of inspecting such
Equipment, all applicable maintenance and other records, Permits,
licenses  and  any  notices or directives from any  manufacturer,
vendor,  service  provider  or  Governmental  Authority,  at  any
reasonable time during normal business hours; provided,  however,
if a Default or default shall have occurred and be continuing, no
notice  of  any inspection by Lessor shall be required.   In  the
event Lessee fails or is unable to perform any of its obligations
hereunder,  Lessor shall have the right, but not the  obligation,
to  perform the same, and Lessee shall forthwith reimburse Lessor
on  an  after-tax basis, as Supplemental Rent, for all costs  and
expenses incurred by Lessor in performing the same.  Lessor shall
not  have  any  duty to make or cause to be made any  inspection,
repair,   restoration,   replacement,   renewal,   addition    or
improvement  of  any nature of description with  respect  to  the
Equipment,  or  the  related property or to  incur  any  cost  or
expense  in  connection with any Lease Document and Lessor  shall
not incur any liability or obligation to any person by reason  of
Lessor's  doing, causing to be done or failing to do any  of  the
foregoing, in its discretion.

    7.  DISCLAIMER OF WARRANTIES.  LESSEE HEREBY ACKNOWLEDGES AND
AGREES  THAT:   EXCEPT FOR THE WARRANTY IN SECTION 16(d)  HEREOF,
THE  EQUIPMENT AND THE RIGHTS, TITLE AND INTEREST BEING  CONVEYED
HEREIN WITH RESPECT THERETO, ARE BEING CONVEYED AND DELIVERED  TO
LESSEE "AS IS" AND "WHERE IS" WITHOUT ANY RECOURSE TO LESSOR, AND
LESSOR  HAS  NOT MADE, AND HEREBY DISCLAIMS, LIABILITY  FOR,  AND
LESSEE  HEREBY WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO,  ANY
AND ALL WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF
ANY KIND WITH RESPECT THERETO, EITHER EXPRESS OR IMPLIED, ARISING
BY  APPLICABLE  LAW OR OTHERWISE, INCLUDING (A)  ANY  EXPRESS  OR
IMPLIED WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF
OR  ARISING  FROM  OR  IN  (1)  MERCHANTABILITY  OR  FITNESS  FOR
PARTICULAR USE OR PURPOSE, (2) COURSE OF PERFORMANCE,  COURSE  OF
DEALING  OR  USAGE OF TRADE OR (3) TORT (WHETHER OR  NOT  ARISING
FROM THE ACTUAL IMPLIED OR IMPUTED NEGLIGENCE OF LESSOR OR STRICT
LIABILITY) OR UNDER THE CODE OR OTHER APPLICABLE LAW WITH RESPECT
TO  THE  EQUIPMENT,  INCLUDING ITS TITLE OR FREEDOM  FROM  LIENS,
FREEDOM FROM TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT,  LATENT
DEFECTS  (WHETHER  OR NOT DISCOVERABLE), CONDITION,  MANUFACTURE,
DESIGN,  SERVICING OR COMPLIANCE WITH APPLICABLE LAW AND (B)  ALL
OBLIGATIONS AND LIABILITIES OF LESSOR, AND RIGHTS AND REMEDIES OF
LESSEE,  HOWSOEVER ARISING UNDER ANY APPLICABLE LAW WITH  RESPECT
TO THE MATTERS WAIVED AND DISCLAIMED, INCLUDING, FOR LOSS OF USE,
REVENUE OR PROFIT WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY
OF  LESSEE  OR  LESSOR TO ANY THIRD PARTY, OR ANY  OTHER  DIRECT,
INCIDENTAL  OR CONSEQUENTIAL DAMAGES (AS SUCH TERMS ARE  USED  IN
SECTION  2719(3) OF THE CODE, OR OTHER APPLICABLE LAW) EXCEPT  TO
THE  EXTENT  THE WAIVER OF SAME IS PROHIBITED BY APPLICABLE  LAW;
all  such risks, as between Lessor and Lessee, are to be born  by
Lessee;  and Lessor's agreement to enter into this Lease and  any
Equipment Schedule is in reliance upon the freedom from  and  the
complete negation of liability or responsibility for the  matters
waived  and  disclaimed  herein.  Lessee  agrees  that  the  only
representations, warranties, guaranties or indemnities made  with
respect  to the Equipment are those made by the Supplier thereof;
and, provided that no Default or default has then occurred and is
continuing  under  the pertinent Equipment Schedule,  Lessor  (a)
shall cooperate  fully with Lessee with respect to the resolution
of  such claims, in good faith and by appropriate proceedings  at
Lessee's  expense, (b) hereby assigns to Lessee, for  and  during
the term of this Lease, any applicable warranties, indemnities or
other  similar  rights under any Supply Contracts (excluding  any
refunds  or other similar payments reflecting a decrease  in  the
value  of  any  such  Equipment, which amount  shall  during  the
existence  of any default or Default be received by and  paid  to
Lessor,  for  application  to  Lessee's  obligations  under   the
Equipment Schedule relating thereto) applicable to any Equipment,
and   (c)  hereby  authorizes  Lessee  to  obtain  all  services,
warranties or (except as provided in (b) above) amounts from  the
Supplier  of  such Equipment to be used to repair such  Equipment
(and  such  amounts  shall  be used  by  Lessee  to  repair  such
Equipment).   Any such claim shall not affect in any  manner  the
unconditional   obligation  of  Lessee  to  make  rent   payments
hereunder.

   8. FEES AND TAXES.  (a) To the extent permitted by Law, Lessee
shall  file  any  necessary  report and  return  for,  shall  pay
promptly when due, shall otherwise be liable to reimburse  Lessor
(on  an  after-tax basis) for, and agrees to indemnify  and  hold
Lessor harmless from all Impositions.
       (b)   If  any report, return or property listing,  or  any
Imposition  is,  by  Law, required to be filed  by,  assessed  or
billed to, or paid by, Lessor, Lessee will do all things required
to  be  done  by  Lessor  (to the extent  permitted  by  Law)  in
connection therewith and is hereby authorized by Lessor to act on
behalf  of  Lessor  in all respects, including,  the  contest  or
protest,  in  good faith and by appropriate proceedings,  of  the
validity of any Imposition, or the amount thereof.  Lessor agrees
fully  to  cooperate with Lessee in any such contest, and  Lessee
agrees  promptly to indemnify Lessor for all reasonable  expenses
incurred  by  Lessor  in  the course  of  such  cooperation.   An
Imposition  or  Claim therefor shall be paid, subject  to  refund
proceedings, if failure to pay would adversely affect  the  title
or  rights  of  Lessor  in the Equipment or otherwise  hereunder.
Provided  that  no Default or default has occurred  and  is  then
continuing,  if  Lessor obtains a refund of any Imposition  which
has  been paid (by Lessee, or by Lessor and for which Lessor  has
been  fully reimbursed by Lessee), Lessor shall promptly  pay  to
Lessee  the net amount of such refund actually received.   Lessee
will  cause all billings of such charges to Lessor to be made  to
Lessor  in  care of Lessee and will, in preparing any  report  or
return  required by Law, show the ownership of the  Equipment  in
Lessee,  and  shall send a copy of any such report or  return  to
Lessor.  If Lessee fails to pay any such charges when due, except
any  Imposition being contested in good faith and by  appropriate
proceedings  as above provided for a reasonable period  of  time,
Lessor at its option may do so, in which event the amount so paid
(including any penalty incurred as a result of Lessee's failure),
plus an Administrative Fee shall be paid by Lessee to Lessor with
the next installment of Basic Rent.
       (c)   The provisions of this Section 8 shall not apply  to
any  Imposition (i) imposed as a result of any voluntary transfer
or disposition by Lessor of all or any portion of its interest in
the Equipment pursuant to Section 15 hereof; (ii) that Lessee  is
contesting  in  good  faith, by appropriate  proceedings  and  is
otherwise  permitted  pursuant to the provisions  of  this  Lease
until the conclusion of such contest; except, that Lessee's right
to contest any Imposition and thereby avoid its obligation to pay
any  such  Imposition is conditioned upon the existence  of  such
Imposition  during  any  such contest not  causing  any  material
danger of the sale, forfeiture or loss of the Equipment; or (iii)
imposed on Lessor that is based on, or measured by gross  or  net
income  taxes  (including, capital gains  taxes,  minimum  taxes,
income taxes collected by withholding and taxes on tax preference
items),  except  for Lessee's obligation to pay  indemnities  and
reimbursements  as  an  "after-tax  basis,"  and   as   otherwise
expressly provided herein.

    9. INTENT, TITLE AND LIENS.  (a) The parties intend and agree
that  the  Equipment  shall remain personal  property,  and  that
Lessor's  title  thereto or the priority of  such  title  not  be
impaired,  notwithstanding the manner in which it may be  affixed
to  any  real  or  personal property.  Lessee  shall  obtain  and
deliver to Lessor (to be recorded at Lessee's expense), from  any
person having an interest in any real or personal property to  or
upon  which  the Equipment is to be attached or located,  as  the
case  may be, waivers of any Lien or which such person might have
or hereafter obtain or claim with respect to the Equipment.
       (b)  During the Term of each Equipment Schedule, and until
Lessee either purchases such Equipment upon the expiration of the
Initial  Term,  or upon the expiration of any Renewal  Term  with
respect  thereto, and upon Lessee's full performance of  all  its
obligations under or relating to such Equipment Schedule,  Lessor
shall retain title to such Equipment; provided, that, Lessee  and
Lessor  acknowledge  that transactions documented  hereunder  and
under  each Equipment Schedule shall constitute a "Lease intended
as  security," or "security interest," as the case may be,  under
Applicable  Law (including under Section 1201(37) of  the  Code).
In furtherance thereof, (i) in order to secure the prompt payment
and  performance  as and when due to all of Lessee's  obligations
(both  now  existing  and  hereafter  arising)  under  each  such
Equipment  Schedule and all of the other Lease Documents,  Lessee
shall be deemed to have granted, and it hereby grants to Lessor a
first  priority security interest in and assigns and conveys  the
following (whether now existing or hereafter created):   (A)  the
Equipment  leased  pursuant to such Equipment Schedule,  (B)  all
subleases thereof (including all of Lessee's rights, but none  of
its   obligations  thereunder,  including  all  amounts   payable
thereunder) all accounts, contract rights and general intangibles
(including all licenses, patents, copyrights, maskworks and trade
secrets) relating to the Equipment, and (C) all replacements  and
Proceeds  (cash  and  non-cash), including the  proceeds  of  all
insurance policies, of the property and rights described  in  (A)
and  (B),  and  (ii)  Lessee  agrees that  with  respect  to  the
Equipment,  in  addition  to all the other  rights  and  remedies
available  to Lessor hereunder upon the occurrence of a  Default,
Lessor  shall  have  all of the rights and remedies  of  a  first
priority perfected secured party under the Code.  Lessee may  not
dispose  of  any of the Equipment except to the extent  expressly
provided   herein,   notwithstanding  the  fact   that   proceeds
constitute a part of the Equipment.
       (c)  Lessee will not directly or indirectly create, incur,
assume  or suffer to exist any Lien on or with respect to any  of
the  Equipment,  title  thereto or any interest  therein,  except
Permitted  Liens.   Lessee shall notify Lessor  immediately  upon
receipt of notice of any Lien affecting the Equipment in whole or
in part, and defend Lessor's title therein and the first priority
thereof  against all persons holding or claiming to hold a  Lien;
and  any  Claims suffered by Lessor as a result thereof shall  be
covered by the indemnity in Section 13 hereof.
``     (d)  Owner for Federal Tax Purposes.  It is hereby  agreed
between  Lessee and Lessor that, for Federal income tax  purposes
(i)  the Lease is, and will be consistently treated as, a finance
lease rather than a true lease; (ii) Lessee will be the owner  of
the Equipment to be delivered under this Lease; (iii) Lessee will
not  claim any rental deduction for amounts paid to Lessor  under
the  Lease;  (iv)  Lessor will not claim  any  cost  recovery  or
depreciation  deductions with respect to the Equipment  delivered
under this Lease; (v) neither Lessor nor Lessee will at any  time
take any action, directly or in directly, or file any returns  or
other  documents inconsistent with the foregoing; and (vi) Lessor
and  Lessee will file such returns, take such actions and execute
such  documents as may be reasonable and necessary to  facilitate
accomplishment  of  the  intent expressed  in  subparagraphs  (i)
through (iv) of this Section 9(d).

    10.     INSURANCE.  (a) Lessee shall obtain and maintain all-
risk  insurance coverages with respect to the Equipment  insuring
against, among other things:  casualty coverage, including,  loss
or  damage  to  the Equipment due to fire and the risks  normally
included  in extended coverage, malicious mischief and vandalism,
for not less than the greater of the Equipment's full replacement
value or the Stipulated Loss Value; and public liability coverage
including,  both  personal injury and  property  damage,  with  a
combined single limit per occurrence of not less than the  amount
specified  in  each Equipment Schedule, with no deductible.   All
such  insurance  shall be in form and amount and  with  companies
reasonably  satisfactory to Lessor.  All insurance  for  loss  or
damage  shall  provide that losses, if any, shall be  payable  to
Lessor  as  sole  loss payee and Lessee shall  utilize  its  best
efforts  to have all checks relating to any such losses delivered
promptly  to  Lessor.   Lessor shall be named  as  an  additional
insured  with  respect to all such liability  insurance.   Lessee
shall  pay  the premiums therefor and deliver to Lessor  evidence
satisfactory to Lessor of such insurance coverage.  Lessee  shall
cause  to be provided to Lessor, not less than fifteen (15)  days
prior  to  the  scheduled expiration or lapse of  such  insurance
coverage,   evidence  satisfactory  to  Lessor  of   renewal   or
replacement  coverage.  Each insurer shall agree, by  endorsement
upon  the  policy  or  policies issued by it  or  by  independent
instrument furnished to Lessor, that (i) no cancellation,  lapse,
expiration or adverse change reducing the coverage thereof  shall
be effective unless Lessor has been given thirty (30) days' prior
written notice thereof; (ii) insurance as to the interest of  any
named  additional insured or loss payee other than  Lessee  shall
not be invalidated by any actions, inactions, breach of warranty,
declaration  or condition or negligence of Lessee or  any  person
other  than such additional  insured with respect to such  policy
or  policies; (iii) such insurance is primary with respect to any
other  insurance  carried by or available  to  Lessor;  (iv)  the
insurer   waives  any  right  of  subrogation  and  any   setoff,
counterclaim,  or  other  deduction,  whether  by  attachment  or
otherwise, against Lessor; and (v) with respect to the  liability
coverage,  all  of  the provisions of such coverage,  except  the
limits of liability, shall operate in the same manner as if there
were a separate policy with and covering Lessee and Lessor.   The
proceeds  of  such insurance payable as a result of  loss  of  or
damage  to  the  Equipment shall be applied as  required  by  the
provisions of Section 11 hereof.
       (b)   With  respect to Lessee's agreement  to  obtain  and
maintain  the casualty and liability insurance coverage for  each
item  of  Equipment  required in clause (a) above,  Lessee  shall
undertake and be responsible for the foregoing in exchange for  a
credit  to  Lessee's rental obligations the amount of  which  has
been  calculated and agreed to by both Lessee and Lessor as  fair
and    complete   consideration   for   such   undertaking    and
responsibility  as it may now and hereafter exist (including  the
payment  by  Lessor of all premiums, costs and expenses  relating
thereto), and accounted for in the amount of Basic Rent for  such
item  of Equipment by its execution and delivery of the Equipment
Schedule  relating  thereto.  In furtherance  of  the  foregoing,
Lessee  acknowledges and agrees that (A) the credit provided  for
in  the  preceding sentence shall fully discharge Lessor for  all
purposes  from  so  obtaining or maintaining any  such  insurance
coverage  (to the extent Lessor would be deemed to have  had  any
responsibility  therefor)  and (B) it shall  also  undertake,  be
responsible for and otherwise fully perform and comply  with  all
of  the  obligations provided for herein that are not related  to
the  obtaining  and maintaining of such insurance  coverage,  and
that   it   shall  not  be  entitled  to  any  credit  or   other
compensation, nor shall Lessor have any responsibility to  Lessee
or  any  other  person, with respect to such obligations  or  any
other obligations not expressly assumed by it hereunder.

    11.      LOSS  AND DAMAGE.  (a) Lessee assumes  the  risk  of
direct  and  consequential loss and damage to the Equipment  from
all  causes.  Except as provided in this Section 11 for discharge
upon  payment of Stipulated Loss Value, no loss or damage to  the
Equipment  or  any  part  thereof shall  release  or  impair  any
obligations  of  Lessee  under  this  Lease.   Without   limiting
Sections 5, 7, 8, 13 or any other provision hereof, Lessee agrees
that  Lessor shall not incur any liability to Lessee for any loss
of  business,  loss  of profits, expenses, or  any  other  Claims
resulting  to  Lessee by reason of any failure  of  or  delay  in
delivery  or  any delay caused by any non-performance,  defective
performance, or breakdown of the Equipment, nor shall  Lessor  at
any  time  be  responsible  for person  injury  or  the  loss  or
destruction  of any other property resulting from the  Equipment.
In  the  event of loss  or damage to any item of Equipment  which
does  not constitute a Total Loss, Lessee shall, at its sole cost
and  expense, promptly repair and restore such item of  Equipment
to  the  condition  required by this  Lease.   Provided  that  no
Default  or  default  has occurred and is then  continuing,  upon
receipt   of  evidence  reasonably  satisfactory  to  Lessor   of
completion  of such repairs, Lessor will apply any net  insurance
proceeds  received by Lessor on account of such loss to the  cost
of  repairs.  Upon the occurrence of a Total Loss during the Term
of this Lease, Lessee shall give prompt notice thereof to Lessor.
On  the next date for the payment of Basic Rent, Lessee shall pay
to  Lessor  the  Rent due on that date plus the  Stipulated  Loss
Value of the item or items of the Equipment with respect to which
the Total Loss has occurred and any other sums due hereunder with
respect to that Equipment (less any net insurance proceeds or net
condemnation award actually paid to Lessor to compensate  it  for
such  Total Loss).  Upon Lessor's receipt of such payment in good
collected   indefeasible  funds  with  respect  to  an  Equipment
Schedule,  such  Equipment Schedule and the  obligation  to  make
future  payments of Basic Rent thereunder shall terminate  solely
with  respect to the Equipment or items thereof so paid  for  and
(unless  any  insurer  shall otherwise demand)  Lessor  shall  be
deemed  to  have  conveyed all of its right, title  and  interest
therein  to  Lessee  "AS IS, WHERE IS" and otherwise  subject  to
Section  7 hereof.  Stipulated Loss Value shall be determined  as
of  the next date of which a payment of Basic Rent is or would be
due  after  a  Total  Loss or other termination  of  the  subject
Equipment Schedule, after payment of any Basic Rent due  on  such
date, and the applicable percentage factor shall be that which is
set  forth  on the SLV Schedule with respect to such  Basic  Rent
payment.
       (b)   Notwithstanding the foregoing or any other provision
hereof  to  the contrary, in the event any item(s)  of  Equipment
suffers a Total Loss and the insurance carrier providing coverage
obtained  by Lessee against such Total Loss, has as a  result  of
such  Total Loss, agreed in writing to pay to Lessor as the  sole
loss  payee proceeds of such coverage in an amount equal  to  the
Stipulated  Loss Value (determined as of the Basic  Rent  payment
date  next preceding such Total Loss, but otherwise in accordance
with the preceding clause (b)), Lessee's obligation to pay future
installments  of  Basic  Rent  for  such  item(s)  of   Equipment
suffering  a Total Loss shall cease as of the Basic Rent  payment
date preceding the Total Loss thereof, and Lessee shall thereupon
be  relieved of its obligation to pay the Stipulated  Loss  Value
thereof;  provided,  that  (i) Lessee has  given  prompt  written
notice   of  such  Total  Loss  to  Lessor  and  the  appropriate
insurer(s) (which notice shall include Lessee's written  election
that  it  intends that this clause (b) shall apply to such  Total
Loss);  (ii)  no  default  or Default occurs  prior  to  Lessor's
receipt  of all amounts due from Lessee and such insurer pursuant
hereto  in good collected indefeasible funds; (iii) such  insurer
neither  (A)  repudiates its obligation to  the  amount  required
above  or  fails  to pay such amount to Lessor in good  collected
indefeasible  funds within 90 days after the date  of  the  Total
Loss,  nor (B) suffers an event of the type described in  Section
14(a)(iv);  and  (iv)  Lessee  takes  all  actions  as  shall  be
requested  by  Lessor with respect to the insurance coverage,  or
otherwise  necessary to facilitate the payment of  the  insurance
proceeds  required  above.   Upon  the  failure  of  any  of  the
conditions  set  forth in the proviso in the preceding  sentence,
Lessee  shall immediately be liable to an pay to Lessor the  full
amounts  that would otherwise have been due pursuant to paragraph
(a) of this Section 11.  To the extent Lessee's obligation to pay
the  Stipulated Loss Value of any item of Equipment is  satisfied
by  Lessor's receipt of insurance proceeds as provided above, and
not by funds in such amount paid by Lessee in the manner required
herein,  Lessor shall have no obligation to convey such  item  of
Equipment to Lease.

    12.      REDELIVERY.  (a) In the event Lessor  exercises  its
remedies under Section 14(c)(2) hereof, Lessee shall, at its  own
expense,  return  the  Equipment  to  Lessor  within  the  period
designated  by Lessor, in a condition that satisfies all  of  the
requirements of this Lease (including Section 6 hereof), and free
and clear of all Liens except Liens resulting from claims against
Lessor  not  relating  to  the ownership  or  operation  of  such
Equipment,  by  delivery  to such place  within  the  Continental
United  States as Lessor shall specify.  In addition to  Lessor's
other rights and remedies hereunder, if repairs are necessary  to
place  the  Equipment in the condition required in this  Section,
Lessee  shall be liable for and pay to Lessor the full amount  of
the  costs  and  expenses  incurred  and/or  paid  by  Lessor  to
accomplish such repairs.

    13.      INDEMNITY.  Lessee assumes and agrees to  indemnify,
defend  and  keep  harmless, even if such Claims are  groundless,
false  or  fraudulent,  Lessor (which for the  purposes  of  this
Section  13 shall also include Ally Capital Corporation  and  its
affiliates   ("Ally")  and  any  assignee  of  Lessor's   rights,
obligations,  title  or  interest under  any  Equipment  Schedule
notwithstanding  any  assignment made by Ally  of  its  interests
herein), its agents and employees, from and against any  and  all
Claims (other than, with respect to any such indemnitee, such  as
may directly and proximately result from the gross negligence  or
willful  misconduct of such indemnitee; but Lessee does agree  to
so indemnify each such indemnitee against its own negligence), by
paying  (on  an  after-tax-basis,  if  to  Lessor)  or  otherwise
discharging  same,  when  and as such Claims  shall  become  due,
including  any Claims arising on account of (a) this  Lease,  any
Equipment  Schedule,  or any other Lease Documents,  or  (b)  the
Equipment,   or   any  part  thereof,  including  the   ordering,
acquisition,   delivery,  installation  or   rejection   of   the
Equipment,  the  possession,  maintenance,  use,  condition,   or
ownership  or  operation  of  any  item  of  Equipment,  and   by
whomsoever owned, used or operated, during the term of this Lease
or any Equipment Schedule with respect to that item of Equipment,
the  existence  of  latent  and other  defects  (whether  or  not
discoverable  by  Lessor  or  Lessee)  any  claim  in  tort   for
negligence  or  strict  liability,  and  any  claim  for  patent,
trademark  or  copyright  infringement,  or  the  loss,   damage,
destruction,   removal,   return,  surrender,   sale   or   other
disposition  of  the  Equipment, or  any  item  thereof,  or  for
whatever  other  reason  whatsoever.  Lessor  shall  give  Lessee
prompt  notice  of  any  claim  or liability  hereby  indemnified
against  and  Lessee  Shall be entitled to  control  the  defense
thereof,  so long as Lessee is not in Default; provided, however,
that  Lessor  shall  have  the right to approve  defense  counsel
selected by Lessee.

    14.     DEFAULT; REMEDIES.  (a) A default shall be deemed  to
have  occurred hereunder (solely with respect to the  obligations
and  other matters addressed in the second sentence of Section  1
hereof) and under an Equipment Schedule ("Default") if (i) Lessee
shall  fail  to  make any payment of Rent or  any  other  payment
hereunder, thereunder, or under any other Lease Document relating
thereto,  within ten (10) days after the same shall  have  become
due;  or  (ii)  Lessee  shall fail to  obtain  and  maintain  the
insurance required pursuant thereto; (iii) (1) Lessee shall  fail
to  perform or observe any other covenant, condition or agreement
to  be  performed or observed by it thereunder or under any other
Lease  Document relating thereto and such failure shall  continue
unremedied for a period of thirty (30) days after the earlier  of
(A)  actual  knowledge thereof by any officer of Lessee,  or  (B)
written  notice  thereof  to Lessee  by  Lessor;  or  (2)  Lessee
repudiates  this Lease or such Equipment Schedule,  or  any  part
hereof or thereof, or attempts to reject or revoke acceptance  of
any  Equipment to be leased or leased or revoke acceptance of any
Equipment  to  be  leased or leased thereunder  (except  for  any
rejection  permitted by the last sentence of Section  5  of  this
Lease),  or  (iv) Lessee shall (1) be generally  not  paying  its
debts  as they become due; or (2) take action for the purpose  of
invoking the protection of any bankruptcy or insolvency  law,  or
any  such law is invoked against or with respect to Lessee or its
property,  and  any  such petition filed against  Lessee  is  not
dismissed  within sixty (60) days; or (v) Lessee  shall  make  or
permit  any  unauthorized Lien against or assignment or  transfer
thereof or of the Equipment or of any interest therein; (vi)  any
certificate,   statement,  representation,  warranty   or   audit
contained  herein,  therein  or  in  any  other  Lease   Document
heretofore or hereafter furnished with respect thereto by  or  on
behalf  of  Lessee  proving to have been false  in  any  material
respect at the time as of which the facts therein set forth  were
stated or certified, or having omitted any substantial contingent
or  unliquidated  liability or claim  against  Lessee;  or  (vii)
Lessee shall be in default under any material obligation for  the
payment  of  borrowed money, for the deferred purchase  price  of
property  or  for  the  payment  of  any  rent  under  any  lease
agreement,  and the applicable grace period with respect  thereto
shall  have  expired; or (viii) Lessee shall have terminated  its
corporate existence, consolidated with, merged into, or  conveyed
or  leased substantially all of its assets as an entirety to  any
person (such actions being referred to as an "Event") unless such
person  is  organized and existing under the laws of  the  united
States  or  any  state,  and  delivers  to  Lessor  an  agreement
satisfactory  in  form  and substance  to  Lessor,  in  its  sole
discretion, containing an effective assumption by such person  of
the  sole  responsibility  for, and agreement  to  pay,  perform,
comply  with  and otherwise be liable for, in a due and  punctual
manner, all of Lessee's obligations having previously arisen,  or
then  or  thereafter  arising, under any and  all  of  the  Lease
Documents;  and  (2)  Lessor  is  satisfied  as  to  the   credit
worthiness  of such person, and of its conformance to  the  other
standard criteria used by Lessor (or Lessor's affiliate or  agent
to  the  extent such affiliate or agent and not Lessor, regularly
makes  decisions  on  Lessor's  behalf  to  participate  or   not
participate  in the extension of lease financing to an  equipment
user); or (iv) there occurs a default under any guaranty executed
in  connection with such Equipment Schedule; or if  there  is  an
anticipatory repudiation of Lessee's obligations hereunder, under
such  Equipment Schedule or any other Lease Documents; or (x)  if
Lessee  is a privately held corporation and effective control  of
Lessee's  voting capital stock, issued and outstanding from  time
to  time,  is  not  retained by the present stockholders  (unless
Lessee  shall have provided sixty (60) days' prior written notice
to  Lessor of the proposed disposition of stock and Lessor  shall
have  consented  thereto in writing); or  (xi)  if  Lessee  is  a
publicly  held  corporation and, as a result of or in  connection
with  a  material  change in the ownership  of  Lessee's  capital
stock, Lessee's debt to worth ratio then equals or exceeds  twice
Lessee's  debt  to  worth ratio as of the  date  of  this  Lease,
without  the  prior written consent of Lessor.  As  used  herein,
"debt  to worth ratio" shall mean the ratio of (1) Lessee's total
liabilities which, in accordance with GAAP, would be included  in
the  liability side of a balance sheet, to (2) Lessee's  tangible
net  worth  including the sum of the par or stated value  of  all
outstanding  capital stock, surplus and undivided  profits,  less
any   amounts  attributable  to  goodwill,  patents,  copyrights,
mailing   lists,   catalogs,  trademarks,   bond   discount   and
underwriting   expenses,   organization   expense    and    other
intangibles, all as determined in accordance with GAAP.
       (b) Although each Equipment Schedule executed pursuant  to
this  Lease shall constitute a separate instrument of lease,  the
occurrence  of  a  Default  hereunder  or  with  respect  to  any
Equipment  Schedule  shall,  at the  sole  discretion  of  Lessor
constitute  a  Default with respect to any one  or  more  of  the
remaining  Equipment  Schedules.   Notwithstanding  anything  set
forth  herein,  Lessor may, but shall not have any obligation  to
(Lessee  hereby waiving any rights it may have to require  Lessor
to  marshall  assets),  (i)  exercise  all  rights  and  remedies
hereunder  independently with respect to each Equipment Schedule;
or  (ii)  apply any collateral and the proceeds thereof in  which
Lessor  holds  a security interest with respect to  a  particular
Equipment  Schedule to Lessee's obligations under such  Equipment
Schedule or any one or al of the remaining Equipment Schedules.
       (c)  Upon  a  Default  hereunder  or  under  an  Equipment
Schedule, as the case may be, Lessor may, at its option,  declare
this  Lease  or  such Equipment Schedule to be in default  either
with  or  without written notice to Lessee (without  election  of
remedies), and at any time thereafter, may exercise any  and  all
rights  and  remedies of a secured party under the  Code  and  in
addition thereto, at its sole discretion, do any one or  more  of
the following, all of which are authorized by Lessee with respect
to such Equipment Schedule as Lessor in its sole discretion shall
elect  (to  the  extent permitted by, and subject  to  compliance
with,  any  mandatory  requirements of  Applicable  Law  then  in
effect):
           (i)(1) declare the following amounts to be immediately
due  and payable, as liquidated damages and not as a penalty (and
in  lieu  of  future  rentals  and  other  obligations  then  due
thereunder),  and demand or sue for, collect and apply,  (A)  all
Basic  Rent  due  and unpaid as of the payment  date  immediately
preceding the Default, plus a pro-rated daily rent in the  amount
set  forth in Section 3(b)(i) of such equipment Schedule for  the
period  from such preceding payment date to the date of  Lessor's
declaration  (to the extent such daily rent is not accounted  for
in  clause (B), (B) by acceleration, the unpaid principal portion
of  the  aggregate Basic Rent payments due on or after such  date
for the remaining period of the Initial Term and the Renewal Term
(whether   or  not  Lessee  has  exercised  its  renewal   option
thereunder)  of  such Equipment Schedule, which principal  amount
shall  be  equal  to the Stipulated Loss Value of  the  Equipment
leased  thereunder  (determined as of the Basic  Rent  date  next
preceding  the Default), (C) all Supplemental Rent and all  other
sums  due thereunder as of the date of such Default; and (D)  all
such  other  charges  permitted  by  Applicable  Law  that,  when
received by Lessor together with all other payments due to Lessor
under this Section 15(c), shall make Lessor whole with respect to
all  harms, damages, losses and expenses suffered by Lessor as  a
result of the Default and Lessee's failure to pay any Rent due as
a  result thereof on the date required hereunder; provided,  that
if  a  Default  described in subsection (a)(iv) above,  or  if  a
Default  shall have occurred and be continuing at any time  after
the  occurrence of an event that is similar in nature to  any  of
the events described in subsection (a)(iv), then, without further
action  or notice of any kind, the amounts described above  shall
immediately become due and payable; and/or
            (ii)(1) require Lessee to assemble any or all of  the
Equipment at the location to which the Equipment was delivered or
the  location  to  which such Equipment may have  been  moved  by
Lessee  or  to  return promptly, any or all of the  Equipment  to
Lessor  at the location, and otherwise in accordance with all  of
the terms of Section 12 hereof; and/or (2) take possession of and
render  unusable by Lessee any or all of the Equipment,  wherever
it  may  be located, without any court order or other process  of
law  (and if Lessor does seek the entry of such an order,  Lessee
agrees  to  waive  any notice or opportunity  to  be  heard  with
respect thereto) and without liability for any damages occasioned
by such taking of possession (any such taking of possession shall
constitute  an automatic termination of this Lease as it  applied
to  those items taken without further notice, and such taking  of
possession  shall not prohibit Lessor from exercising  its  other
remedies hereunder); and/or (3) at Lessor's request, Lessee shall
promptly execute and deliver to Lessor such instruments of  title
and other documents as Lessor may deem necessary or advisable  to
enable Lessor or an agent or representative designated by Lessor,
at  such time or times and place or places as Lessor may specify,
to  obtain possession of all or any part of any rights in respect
of the Equipment the possession of which Lessor shall at the time
be entitled hereunder; and if Lessee shall for any reason fail to
execute  and delivery such instruments and documents  after  such
demand by Lessor, Lessor may (A) obtain a judgment conferring  on
Lessor the right to immediate possession and requiring Lessee  to
deliver such instruments and documents to Lessor, to the entry of
which  judgment  Lessee  hereby specifically  consents,  and  (B)
pursue all or part of such Equipment wherever it may be found and
may enter any of the premises wherever such Equipment may be,  or
is  supposed  to  be,  and  search for such  Equipment  and  take
possession  of  and remove same; and/or (4) have the  right,  but
without  any  obligation,  to (A) use, operate,  store,  control,
insure  or manage the Equipment and to carry on the business  and
to  exercise  all  rights and powers of Lessee  relating  to  the
Equipment  as  Lessor  shall deem best, including  the  right  to
remove  Liens, cure violations of Applicable Law, and enter  into
any and all such agreements with respect thereto and with respect
to  the  maintenance, condition, operation, leasing,  storage  or
disposition  of the Equipment or any part thereof as  Lessor  may
determine,   (B)  collect  and  receive  all  Proceeds,   without
prejudice, however, to the right of Lessor under any provision of
this  Lease to collect and receive all cash held by, or  required
to  be  deposited  with, Lessor hereunder,  and  (C)  apply  such
Proceeds,  less  costs of collection, in the manner  provided  in
clause (iii)(A) below, and/or
            (iii)  subject to any right of Lessee to redeem  such
Equipment,  sell  or  otherwise dispose of any  or  all  of  such
Equipment,  whether  or not in Lessor's possession,  and  without
instituting  any legal proceedings whatsoever, in a  commercially
reasonable manner at public or private sale with notice to Lessee
(the  parties  agreeing that ten (10) days' prior written  notice
shall constitute adequate notice of any such sale); and such sale
or  disposition  may  be  (1) by public auction  to  the  highest
bidder, in one lot as an entirety or in separate lots, either for
cash or on credit and on such terms as Lessor may determine,  and
at  any place (whether or not it be the location of the Equipment
or  any  part  thereof) designated in such  notice,  and  (2)  be
adjourned from time to time by announcement at the time and place
appointed for such sale or sales, or for any such adjourned  sale
or  sales, without further published notice, and Lessor  may  bid
for  and purchase, at its sole discretion, the Equipment  or  any
part  thereof  at such sale, it being understood,  however,  that
without  the consent of Lessor, neither Lessee nor any  affiliate
of  Lessee or any other person acting directly or indirectly  for
or  on  behalf of Lessee or any affiliate of Lessee  may  be  the
purchaser  at any such private sale (except for the  full  amount
due  to Lessor under such Equipment Schedule, and under any other
Lease  Documents collateralized thereby); and apply the  proceeds
of  such disposition and all Proceeds:  (A) First, to the payment
of  all  costs  of enforcement, including expenses of  any  sale,
lease  or  other disposition, expenses of any taking,  attorneys'
fees, court costs and other expenses incurred or advances made by
Lessor  in protection of its rights or otherwise pursuant to  its
exercise of remedies and to provide adequate indemnity to  Lessor
against all Impositions and Liens which by Law have, or may have,
priority  over the rights of Lessor to the money so  received  by
Lessor; (B) Second, to the payment of Lessee's obligations  under
the  Equipment  Schedule,  and under any  other  Lease  Documents
collateralized  thereby; and (C) Third, to  the  payment  of  any
surplus  thereafter remaining to Lessee or to  whosoever  may  be
entitled  thereto;  and  in  the  event  that  the  proceeds  and
Remaining  Proceeds are insufficient to pay the amounts specified
in  clauses (A) and (B) above, Lessor may collect such deficiency
from Lessee; and/or
            (iv) terminate this Lease or such Equipment Schedule;
and/or
           (v) proceed by appropriate court action, either at law
or   in  equity  or  in  bankruptcy,  whether  for  the  specific
performance of any covenant or agreement herein contained  or  in
execution  or aid of any power herein granted; or for foreclosure
hereunder, or for the appointment of a receiver or receivers  for
the Equipment or any part thereof, for the recovery of a judgment
for the obligations thereby secured or for the enforcement of any
other   proper,   legal  or  equitable  remedy  available   under
Applicable Law, including Section 9502 et seq. of the Code.
      (d) Unless otherwise provided above, a termination pursuant
hereto  shall occur only upon written notice by Lessor to  Lessee
and,  unless Lessor is terminating this Lease, only with  respect
to  the  Equipment  Schedule  as Lessor  specifically  elects  to
terminate  in  such notice.  Except as to the Equipment  Schedule
with  respect  to  which  there is a termination,  the  remaining
Equipment  Schedules shall continue in full force and effect  and
Lessee shall be and remain liable for the full performance of all
its   obligations  thereunder  and  under  the  remaining   Lease
Documents.   In  addition,  Lessee  shall  be  liable   for   all
reasonable  legal  feels,  all court  costs  and  other  expenses
incurred  by  reason of any Default or the exercise  of  Lessor's
remedies, including all expenses incurred in connection with  the
return  of any Equipment in accordance with the terms of  Section
12  hereof or in placing such Equipment in the condition required
by Section 12.  No right or remedy referred to in this Section 14
is  intended  to  be exclusive, but each shall be cumulative  and
shall  be  in addition to any other remedy referred to  above  or
otherwise  available at law or in equity, and  may  be  exercised
concurrently  or separately from time to time.   The  failure  of
Lessor  to exercise the rights granted hereunder upon any default
or  Default by Lessee shall not constitute a waiver of  any  such
right  upon the continuation or reoccurrence of any such  default
or  Default.   In  no event shall the execution of  an  Equipment
Schedule  constitute a waiver by Lessor any pre-existing  default
or Default in the performance of the terms and conditions hereof.

    15.      ASSIGNMENT BY LESSOR AND LESSEE.  WITHOUT THE  PRIOR
WRITTEN  CONSENT  OF  LESSOR  (WHICH SHALL  NOT  UNREASONABLY  BE
WITHHELD), LESSEE WILL NOT ASSIGN ANY OF ITS RIGHTS NOR  DELEGATE
ANY  OF  ITS  OBLIGATIONS  HEREUNDER,  SUBLET  THE  EQUIPMENT  OR
OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR  USED BY, OR  TO
COME  INTO  OR REMAIN IN THE POSSESSION OF, ANY ONE  BUT  LESSEE.
ANY  UNPERMITTED SUBLEASE OR ASSIGNMENT BY LESSEE SHALL BE  VOID.
AB INITIO.  No assignment or sublease, whether authorized in this
Section or in violation of the terms hereof, shall relieve Lessee
of  its  obligations under any Lease Document  and  Lessee  shall
remain  primarily liable under al of the Lease Documents.  Lessor
may  at  any  item  assign any or al of its rights,  obligations,
title  and  interest under any or all of the Lease documents,  to
any  other  person, so long as notice is sent  to  Lessee.   Such
notice  shall  provide the name and address of Lessor's  assignee
and  the  percentage interest such assignee has acquired  in  the
Lease.   Lessee  shall  acknowledge receipt  of  such  notice  in
writing.   Upon receipt of such notice from Lessor, Lessee  shall
enter  in  its  books  and records the name and  address  of  the
assignee  (and its percentage interest in the Lease) as  the  new
Lessor  under  the Lease.  In the event Lessor expressly  retains
the  obligations  of the lessor under any Lease Document  in  any
such  assignment,  Lessor's assignee shall not  be  obligated  to
perform  any duty, covenant or condition required to be performed
by  the lessor under the terms o such Lease Document (other  than
the  covenant  of  quiet  enjoyment specified  in  Section  16(d)
hereof); and no breach or default by Lessor hereunder or pursuant
to any other agreement between Lessor and Lessee, should there be
one,  shall excuse performance by lessee of any provision hereof;
it  being understood that in the event of a default or breach  by
Lessor  that  Lessee shall pursue any rights on  account  thereof
solely  against  Lessor.  Lessee agrees that any such  assignment
shall  not materially change Lessee's duties or obligations under
the  Lease  or  any  Equipment Schedule nor  materially  increase
Lessee's  risks or burdens.  Upon such assignment and  except  as
may  otherwise by provided therein all references in this  Lease,
or  such  other assigned Lease Document, to Lessor shall  include
such  assignee.   Subject  always to the  foregoing,  this  Lease
inures to the benefit of, and is binding upon, the successors and
assigns of the parties hereto.

     16.      MISCELLANEOUS.   (a)  This  Lease,  each  Equipment
Schedule,  any  other Lease Documents and any  commitment  letter
executed  by the parties pertaining to such Equipment  Schedules,
constitute the entire agreement between the parties with  respect
to the subject matter hereof and thereof and shall not be amended
or altered in any manner except by a document in writing executed
by both parties.  This Lease and all of the other Lease Documents
may  be  executed in any number of counterparts and by  different
parties  hereto  or  thereto on separate  counterparts,  each  of
which, when so executed and delivered, shall be an original,  but
all  such counterparts shall together consist of but one and  the
same  instrument; provided, however, that to the extent that this
Lease  or  any Equipment Schedule constitutes chattel  paper  (as
such  terms is defined in the Code) no security interest in  this
Lease  or such Equipment Schedule made be created thereby by  the
transfer  or possession of any counterpart hereof or thereof,  as
the  case  may be, other than the originally executed counterpart
bearing  the mark "Original" on the first page hereof or thereof,
which  counterpart  shall  constitute the  "Original"  hereof  or
thereof, as the case may be, for purposes of the Code.
       (b)   Any  provision  of this Lease  or  any  other  Lease
Document which is prohibited or unenforceable in any jurisdiction
shall,  as to such jurisdiction, be ineffective to the extent  of
such  prohibition  or unenforceability without  invalidating  the
remaining   provisions  hereof,  and  any  such  prohibition   or
unenforceability  in  any jurisdiction shall  not  invalidate  or
render  unenforceable such provision in any  other  jurisdiction.
Without  limiting the generality of the foregoing, in  the  event
any   court  shall  determine  that  any  provision  hereof   was
unconscionable  when  made, such court is  hereby  authorized  by
Lessor and Lessee to limit the application of such unconscionable
provision  to  the  extent necessary to avoid any  unconscionable
result.
       (c)   Each  execution by Lessee of an  Equipment  Schedule
shall  be  deemed a reaffirmation and warranty that  there  shall
have been no material adverse change in the business or financial
condition of Lessee from the date of execution hereof.  Except as
otherwise expressly provided herein, it is hereby agreed that (i)
all   agreements,  indemnities,  representations  and  warranties
contained  herein or in any other Lease Document  shall  survive,
and shall continue in effect following the execution and delivery
of  this Lease and all such other Lease Documents; and (ii)  with
respect to each Equipment Schedule, shall survive the termination
thereof  to  the  extent necessary for their  full  and  complete
performance.
       (d)   Subject to the terms and conditions hereof,  neither
Lessor  nor any person authorized by Lessor shall interfere  with
Lessee's right to peaceably and quietly hold, possess and use the
Equipment  during  the  term of the Equipment  Schedule  relating
thereto.  Any action by Lessee against Lessor for any default  by
Lessor  under  this  Lease or any Equipment  Schedule,  shall  be
commenced  within  one (1) year after any such  cause  of  action
accrues.
        (e)   Lessee  irrevocably  appoints  Lessor  as  Lessee's
attorney-in-fact  (which power shall be deemed  coupled  with  an
interest)  to  execute on Lessee's behalf and file  al  UCCs  and
amendments Lessor deems advisable to establish, protect,  perfect
or  obtain priority for the security interest granted herein,  to
execute,  endorse and deliver any documents and checks or  drafts
relating  to or received in payment for any loss or damage  under
the  policies of insurance required by the provisions of  Section
10  hereof, but only to the extent that the same relates  to  the
Equipment.
       (f)   LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN  ANY
ACTION  OR PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAYBE PARTIES
ARISING  OUT OF OR IN ANYWAY PERTAINING TO THIS LEASE OR  ANY  OF
THE  LEASE  DOCUMENTS.  IT IS HEREBY AGREED AND  UNDERSTOOD  THAT
THIS  WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL  CLAIMS
AGAINST PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING  CLAIMS
AGAINST  PARTIES WHO ARE NOT PARTIES TO THIS LEASE OR SUCH  OTHER
LEASE  DOCUMENTS.   THIS  WAIVER  IS  KNOWINGLY,  WILLINGLY   AND
VOLUNTARILY   MADE  BY  THE  PARTIES  AND  THE   PARTIES   HEREBY
ACKNOWLEDGE THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE  BEEN
MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OR TRIAL BY JURY  OR
IN  ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.  EACH OF LESSOR  AND
LESSEE  FURTHER ACKNOWLEDGE THAT IT HAS BEEN REPRESENTED  IN  THE
SIGNING  OF THIS LEASE AND THE OTHER LEASE DOCUMENTS AND  IN  THE
MAKING  OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED  OF
THEIR  OWN  FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY  TO
DISCUSS THIS WAIVER WITH COUNSEL.
       (g)  All notices (excluding billings and communications in
the  ordinary course of business) hereunder shall be in  writing,
delivered  personally  or by overnight courier  service,  set  by
facsimile transmission (with confirmation of receipt), or sent by
certified mail, return receipt requested, addressed to the  other
party  at  its  respective address stated below the signature  of
such party or at such other address as such party shall from time
to  time  designate in writing to the other party, and  shall  be
effective from the date of mailing.
       (h)   This Lease and al of the other Lease Documents shall
not  be  effective unless and until accepted by execution  by  an
officer of Lessor at the address, in the State of California,  as
set  forth below the signature of Lessor.  THIS LEASE AND ALL  OF
THE  OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES  HEREUNDER  AND  THEREUNDER  SHALL  IN  ALL  RESPECTS  BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL  LAWS
OF  THE  STATE OF CALIFORNIA (WITHOUT REGARD TO THE  CONFLICT  OF
LAWS  PRINCIPLES  OF  SUCH  STATE),  INCLUDING  ALL  MATTERS   OF
CONSTRUCTION,  VALIDITY  AND  PERFORMANCE,  REGARDLESS   OF   THE
LOCATION OF THE EQUIPMENT.  The parties agree that any action  or
proceeding  arising  out of or relating  to  this  Lease  may  be
commenced  in  any  state  or  Federal  court  in  the  State  of
California, and agree that a summons and complaint commencing  an
action  or proceeding in any such court shall be properly  served
and shall confer personal jurisdiction if served personally or by
certified mail to it at its address hereinbelow set forth, or  as
it  may  provide  in writing from time to time, or  as  otherwise
provided under the laws of the State of California.

    17.      DEFINITIONS  AND  RULES OF  CONSTRUCTION.   (a)  The
following  terms,  wen capitalized (if applicable)  or  otherwise
used as below, have the following meanings:
    "Abatement Amount":  with respect to any Abatement Period, an
amount  equal  to (i) any installment(s) of Basic Rent,  and  any
fraction  thereof,  accruing pursuant to the  Equipment  Schedule
covering  the item of Equipment having suffered an Impairment  of
Use,  multiplied by (ii) a fraction having (x) a numerator  equal
to  the  amount of Total Invoice Cost allocable to such  item  of
Equipment, and (y) a denominator equal to the Total Invoice  Cost
of  all  of  the items of Equipment then being leased  to  Lessee
under such Equipment Schedule.
    "Abatement  Period":  with respect to any item of  Equipment,
that period commencing upon the Impairment Date relating thereto,
and  continuing until the earlier of (i) Lessor having either (x)
cured  the  Impairment of Use relating thereto, or  (y)  provided
Lessee  with Replacement Equipment in substitution therefore,  or
(ii) the expiration of the Term of such Equipment Schedule.
    "Administrative Fee":  with respect to each payment  of  Rent
that  shall  become due and payable hereunder or  under  or  with
respect  to any Equipment Schedule, an amount equal to  five  (5)
percent  of  such  Rent payment; provided, that  if  such  charge
exceeds  the highest charges of such type permitted by Applicable
Law,  then  the  Administrative Fee shall  be  the  highest  such
charges permitted by Applicable Law.
    "Applicable Law":  any applicable Law, including any Law that
may apply to Lessee, its properties and operations, the Equipment
or  related  property or the operation, modification,  condition,
maintenance,  ownership, leasing or use  thereof  (including  any
product  thereof), or any transaction contemplated  hereunder  or
under any other Lease Document, including any environmental  law,
federal  or  state securities law, commercial law (pertaining  to
the  rights  and  obligations  of sellers,  purchasers,  debtors,
secured  parties,  or  to  any other pertinent  matter),  zoning,
sanitation,  siting or building law, energy, occupational  safety
and health practices, or any other Law.
    "Base Lease Commencement Date":  for each Equipment Schedule,
as defined in Section 2 thereof.
    "Basic  Rent":  the rental installments payable  pursuant  to
each Equipment Schedule for the Interim Term, the Basic Term  and
the  Renewal  Term,  in the amounts and on the  dates  set  forth
therein.
    "business  day":  any day, other than a Saturday, Sunday,  or
legal holiday for commercial banks under the laws of the State of
the governing Law of this Lease.
     "Claims":    all  claims,  harms,  judgments,   good   faith
settlements  entered  into, suits, actions,  debts,  obligations,
damages  (whether  incidental, consequential or direct),  demands
(for  compensation, indemnification, reimbursement or  otherwise)
losses,   penalties,   fines,   liabilities   (including   strict
liability),  charges that Lessor has incurred or  is  responsible
for  in  the  nature  of  interest, Liens, and  costs  (including
attorneys'  fees and disbursements and any other  legal  or  non-
legal  expenses of investigation or defense of any Claim, whether
or  not  such  Claim  is ultimately defeated,  or  enforcing  the
rights,  remedies  or  indemnities  provided  for  hereunder,  or
otherwise available at law or equity to Lessor), of whatever kind
or   nature,  contingent  or  otherwise,  matured  or  unmatured,
foreseeable or unforeseeable, by or against any person.
    "Code"  or "Uniform Commercial Code":  the Uniform Commercial
Code  as  in  effect  in  California or in any  other  applicable
jurisdiction; and any reference to an article or section  thereof
shall  mean the corresponding article or section (however termed)
of  any  such other applicable version of the Uniform  Commercial
Code.
    "default":  except when inconsistent with the context of  any
provision  hereof, an event which, but for the lapse of  time  or
the giving of notice or both, would be a Default.
    "Equipment":   with respect to each Equipment  Schedule,  the
property described therein, together with all appliances,  parts,
instruments,  accessories, furnishings, which are  from  time  to
time   incorporated  in  the  Equipment,  or   having   been   so
incorporated,  are later removed therefrom, unless title  thereto
is expressly released by Lessor, and all replacements of, and all
additions,  improvements and accessions to any and  all  thereof,
and  all books and records and general intangibles (including all
licenses,   patents,  copyrights  and  trade  secrets)   relating
thereto;  and when used in the context of Lessor's title  to  the
Equipment  (whether relating to the creation, grant,  perfection,
release, priority, enforcement or application of process thereof)
shall  also include all other property in which Lessor is granted
a  security  interest hereunder or from time to  time  under  any
Equipment Schedule.
    "Equipment Schedule":  any Equipment Schedule to be  executed
pursuant hereto.
    "GAAP":   generally  accepted accounting  principle,  applied
consistently.
     "Governmental  Authority":   any  federal,  state,   county,
municipal,  regional  or  other governmental  authority,  agency,
board,  body,  instrumentality or court, in  each  case,  whether
domestic or foreign.
    "Impairment  Date":   the  date  of  the  occurrence  of  any
Impairment of Use.
    "Impairment  Event":  with respect to any item of  Equipment,
Lessor's breach of its agreements in Section 16(d).
    "Impairment  of Use":  Lessee is denied use or possession  of
any  item  of  Equipment to a material extent, as  a  direct  and
primary result of an Impairment Event; provided, that such  event
is  certified  to  Lessor  in  writing  by  Lessee's  responsible
officer,  and  verified  to  Lessor's  satisfaction  by  Lessor's
independent investigation or such other evidence relating thereto
as Lessor may reasonably request.
    "Imposition":  with respect to each Equipment  Schedule,  any
title,  recordation,  documentary stamp and  other  fees,  taxes,
assessments and all other charges or withholdings of  any  nature
(together  with  any penalties or fines thereof) arising  at  any
item   upon  or  relating  thereto  or  to  the  Equipment  lease
thereunder,   or  the  delivery,  acquisition,  ownership,   use,
operation, leasing or other disposition of such Equipment or upon
the  Rent  payable thereunder, whether the same  be  assessed  to
Lessor or Lessee.
    "Initial  Term":  for  each Equipment Schedule,  the  monthly
period  specified  in Section 2 thereof commencing  on  the  Base
Lease Commencement Date.
    "Interim Term":  for each Equipment Schedule, the period from
the effective date thereof to the Base Lease Commencement Date.
    "Law":   any  law, rule, regulation, ordinance, order,  code,
common  law, interpretation, judgment, directive, decree, treaty,
injunction, writ, determination, award, Permit or similar norm or
decision of any Governmental Authority.
   "Lease":  this Equipment Lease Agreement.
    "Lease  Documents":  collectively, the Lease,  the  Equipment
Schedules,  and  all  instruments,  documents,  certificates  and
agreements delivered pursuant hereto.
    "Lien":   any  mortgage,  pledge, lease,  sublease,  security
interest,  attachment, charge, encumbrance or right or  claim  of
others  whatsoever  (including  any  conditional  sale  or  other
retention agreement).
    "Permit":   any action, approval, certificate  of  occupancy,
consent,  waiver, exemption, variance, franchise, order,  permit,
authorization,  right  or  license,  or  other  form  of  legally
required permission, of or from a Governmental Authority.
    "Permitted  Lien":   (a)  Lessor's  and  Lessee's  respective
rights,  titles  and  interest in the Equipment,  (b)  mechanics,
materialmen, laborers, employees or suppliers Liens  and  similar
Liens  arising by operation of Law and incurred by Lessee in  the
ordinary  course of business for sums that are not yet delinquent
or  are  being  contested in good faith  by  negotiations  or  by
appropriate   proceedings  which  suspend  the   collection   and
enforcement  thereof (provided, that the existence of  such  Lien
while  such  negotiations or proceedings  are  pending  does  not
involve  any  substantial risk (in Lessor's  discretion)  of  the
sale, forfeiture or loss of the Equipment or any therein, and for
which  adequate  reserves have been provided in  accordance  with
GAAP),  and  (c)  Liens arising out of any  judgments  or  awards
against  Lessee  which  have been adequately  bonded  to  protect
Lessor's  interests or with respect to which a stay of  execution
has been obtained pending an appeal or a proceeding for review.
    "person":   any  individual, corporation, partnership,  joint
venture,  or  other  legal  entity or a  Governmental  Authority,
whether related or unrelated to Lessee or Lessor.
    "Proceeds":   all  tolls,  rents, revenues,  issues,  income,
products, profits and other proceeds of the Equipment or any part
thereof.
    "Purchase  Documents":  all documents, instruments,  licenses
and  agreements  pertaining  to the acquisition  of  any  of  the
rights, title and interests in the Equipment.
    "Purchase  Price":  for each Equipment Schedule,  the  amount
specified as such therein.
    "Renewal  Term":  for each Equipment Schedule, unless  Lessee
elects  to purchase the Equipment on the last day of the  Initial
Term, the consecutive monthly period set forth therein.
    "Rent":   collectively, the Basic Rent and  the  Supplemental
Rent.
   "Replacement Equipment":  any item(s) of Equipment substituted
by  Lessor  for any item of Equipment suffering an Impairment  of
Use,  having  the  same  value, utility and  condition  that  the
replaced  item  of Equipment had on the date next  preceding  the
Impairment Date.
    "Stipulated  Loss  Value":  with respect  to  each  Equipment
Schedule,  the product of the Total Invoice Cost of the Equipment
leased  thereunder,  and  the applicable percentage  factors  set
forth on the Schedule of Stipulated Loss Values attached hereto.
   "Supplemental Rent":  all amounts, liabilities and obligations
(other than Basic Rent) which Lessee assumes or agrees to pay  to
Lessor  or  others hereunder, or under any other Lease  Document,
with  respect to an Equipment Schedule, including the  Stipulated
Loss  Value,  the  Purchase Price, all  Administrative  Fees  and
payments  constituting indemnities, reimbursements, expenses  and
other charges payable pursuant to the terms thereof.
    "Supplier":   the person from whom Lessor is  purchasing  the
Equipment.
    "Supply Contract":  any written contract from the Supplier of
the  Equipment,  pursuant  to  which  Lessor  has  purchased  the
Equipment for lease to Lessee under an Equipment Schedule.
    "Term":   the period for which Equipment is leased under  any
Equipment Schedule, including the Interim Term, the Initial  Term
and, to the extent Lessee does not purchase the Equipment on  the
last day of the Initial Term, the Renewal Term.
    "title":  when used in the context of Lessor's title  to  any
Equipment,  such  title retained by Lessor, which,  after  giving
effect  to  the  provisions of this Lease,  constitutes  a  first
priority  security  interest in such Equipment  under  Applicable
Law.
     "Total  Invoice  Cost":   with  respect  to  each  Equipment
Schedule,  the amount specified as such thereon.
    "Total  Loss":   any of (a) the actual or constructive  total
loss   of   any  item  of  the  Equipment;  or  (b)   the   loss,
disappearance, theft or destruction of any item of the Equipment;
or   (c)   damage  (including  any  contamination  by   hazardous
substances) to any item of the Equipment to such extent as  shall
make repair thereof uneconomical, or shall render any item of the
Equipment  permanently  unfit for  normal  use,  for  any  reason
whatsoever;  or (d) the condemnation, confiscation,  requisition,
seizure,  forfeiture or other taking of title to or  use  of  any
item of the Equipment, or any imposition of a Lien thereon by  an
Governmental Authority in excess of $___; or (e) as a  result  of
any  Law or other action taken by any Governmental Authority, the
use  of  the Equipment in the normal course of Lessee's  business
shall  have been prohibited (i) indefinitely or (ii) for a period
in excess of (1) 60 days, or (2) for a period that extends beyond
the  then  existing  Term; all of the foregoing,  to  the  extent
established to the reasonable satisfaction of Lessor.
   "UCC":  a Uniform Commercial Code financing statement.
       (b)   Any  defined term used in the singular  preceded  by
"any"  indicates any number of the members of the relevant class.
(i)  "including shall mean containing, embracing or involving all
of  the  enumerated items, but not limited to such  items  unless
such  term is followed by the words "and limited to," or  similar
words; and (ii) use of the word "or" shall mean at lest one,  but
not  necessarily  only one, or the alternatives enumerated.   Any
Lease  Document  or  other agreement or  instrument  referred  to
herein  means  such agreement or instrument as  supplemented  and
amended  from  time to time.  Any reference to Lessor  or  Lessee
shall  include  their  permitted  successors  and  assigns.   Any
reference  to  a  Law  shall  also  mean  such  Law  as  amended,
superseded  or  replaced  from time to  time.   Unless  otherwise
expressly  provided  herein  to the contrary,  all  actions  that
Lessee takes or is required to take under this Lease or any other
Lease Document, shall be taken at Lessee's sole cost and expense,
and  all such costs and expenses shall constitute Claims  and  be
covered  by Section 14 hereof.  To the extent Lessor is  required
to  give  its  consent to Lessee with respect to any matter,  the
reasonableness of Lessor's withholding of such consent  shall  be
determined  based  on the then existing circumstances;  provided,
that   Lessor's  withholding  of  its  consent  shall  be  deemed
reasonable for all purposes if (i) the taking of the action  that
is  the  subject  of  such  request, might  result  (in  Lessor's
discretion),  in (1) an impairment of Lessor's rights,  title  or
interests  hereunder  or under any Equipment  Schedule  or  other
Lease Document, or to the Equipment, or (2) expose Lessor to  any
Claims, or (ii) to the extent Lessee fails to provide promptly to
Lessor   any   filings,  certificates,  opinions  or  indemnities
specified by Lessor to Lessee in writing.
      (c)  Lessor and Lessee agree that the definitions and rules
of  construction herein shall constitute an integral part of this
Lease.

    IN WITNESS WHEREOF, the parties hereto have caused this Lease
to be duly executed as of the day and year first above set forth.

ALLY CAPITAL CORPORATION ELECTROSOURCE, INC.


                 /s/                              /s/
Name:  James A. Kamradt            Name:  James M. Rosel
Title:      Vice  President-Production           Title:      Vice
President, Finance, Law & Contracts

  2330 Marinship Way, Suite 300         3800 B Drossett Drive
  Sausalito, California  94965          Austin, Texas  78744-1131