EXHIBIT 10.8(f)


                             EXTENSION AND AMENDMENT
                                       OF
                   SECOND AMENDED AND RESTATED DENNIS J. LACEY
                         EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXTENSION AND AMENDMENT AGREEMENT ("Agreement") is made and entered into as
of the 27th day of June, 1997, having an "Effective Date" of October 1, 1997, by
and between Capital Associates, Inc., a Delaware corporation ("CAI") and Capital
Associates  International,  Inc. a Colorado  corporation  ("CAII") (CAI and CAII
being  collectively  referred  to herein as the  "Company")  and Dennis J. Lacey
("Lacey").

                                    RECITALS

A.  The Company and Lacey entered into that certain  Second Amended and Restated
    Dennis J. Lacey Executive Employment Agreement, dated as of October 1, 1995,
    which includes an Exhibit A to Second  Amended and Restated  Dennis J. Lacey
    Executive Employment  Agreement Severance Benefits  (collectively the "Lacey
    Agreement") and except for those terms and conditions  amended  hereby,  the
    terms and conditions of the Lacey Agreement are hereby  incorporated  herein
    by this reference as Exhibit A.

B.  The Company and Lacey now desire to amend  certain  provisions  of the Lacey
    Agreement and extend the Lacey  Agreement  for an  additional  two (2) years
    through September 30, 1999.

                                    AGREEMENT

NOW,  THEREFORE,  in  consideration  of the promises and the covenants set forth
herein, and in the Lacey Agreement,  and other good and valuable  consideration,
the  receipt  and  sufficiency  of which is hereby  acknowledged,  the  parties,
intending to be legally bound, hereby agree as follows.

1.  ADDITIONAL  LONG TERM  BONUS.  Section 7. of the Lacey  Agreement  is hereby
    amended by the  addition of a new second  paragraph  to that  Section  which
    states:

    "Lacey shall also be entitled to an  additional  bonus to encourage the
    development  and attainment of certain long term goals for the Company.
    Such long term goals shall cover a period of 3, 4 or 5 fiscal  years of
    the Company,  but shall be  structured  to be paid  annually by setting
    incremental  annual  goals  which  lead  to the  accomplishment  of the
    Company's long term goals. The long term goals, the annual  incremental
    goals and the each  year's  incremental  cash bonus to be paid upon the
    achievement of the annual  incremental  goals,  shall be set forth in a
    Long Term Bonus Plan  developed by the Executive  Committee and adopted
    by the  Compensation  Committee.  The term of the Long Term  Bonus Plan
    shall not be construed as extending the term of the Lacey Agreement."


                                     1
<PAGE>



2.  AUTOMOBILE ALLOWANCE. Section 8. of the Lacey Agreement is hereby amended to
    provide a $1,000 per month automobile allowance.

3.  "CHANGE  OF  CONTROL"  TERMINATION.  Section  2. (B) of  Exhibit A to Second
    Amended  and  Restated  Dennis  J.  Lacey  Executive   Employment  Agreement
    Severance  Benefits  is hereby  amended  by the  addition  of the  following
    paragraph after the third full paragraph of that Section, which states:

    "In the event the continuation of employment circumstances described in
    the second full  paragraph  of this Section 2. (B) do not occur so that
    Lacey is deemed terminated due to a "Change of Control" (and other than
    for cause), the termination  payments  contemplated and provided for in
    the first full  paragraph  of this  Section 2. (B) shall not be paid to
    Lacey, and in lieu thereof,  the Company shall pay to Lacey within five
    (5) business days of the date of such termination, one lump sum payment
    equal to 100% of Lacey's Base Salary for a two (2) year  period,  which
    shall not be subject to any off set due to any other  compensation that
    Lacey may earn  within the two (2) years  following  such  termination;
    provided  and on the  condition  that  Lacey  agrees  "not to  compete"
    against  the  Company  during  this two  year  term.  The term  "not to
    compete"  as used  herein  shall mean that Lacey will not engage in any
    facet of the equipment  leasing business in any form (except that which
    is  contemplated  in  Section  5. of this  Exhibit  A),  and this shall
    include, without limitation,  that Lacey will not become a shareholder,
    officer,  employee or agent of any equipment leasing company or entity,
    or a company or entity that owns and/or  manages an  equipment  leasing
    business,  nor shall he act as an equipment leasing  consultant for any
    equipment  leasing  company  or entity  (other  than the  Company).  In
    addition,  Lacey must comply with the obligations of Sections 6. and 7.
    of this Exhibit A."

4.  EXTENSION.

    Section 3. of the Lacey  Agreement is hereby amended by deletion of the year
    "1997" in the  third  line and in lieu  thereof  the  insertion  of the year
    "1999."

    Section 5. of the Lacey  Agreement is hereby amended by deletion of the year
    "1997" where it appears in two places and, in lieu thereof, the insertion of
    the year "1999."

5.  STOCK OPTIONS.  Section 12. of the Lacey  Agreement is hereby amended by the
    addition of a third paragraph, which states:

    "As stock  options are  granted to the  non-employee  directors  of the
    Company under the Company's  Non-Employee  Director  Stock Option Plan,
    Mr. Lacey shall be granted the same quantity of stock options under the
    Company's stock option plan for employees."


                                     2

<PAGE>


6.  COUNTERPARTS.  The last  sentence  of Section 19 of the Lacey  Agreement  is
    hereby amended by deleting the last full sentence of Section 19.

7.  RATIFICATION.  Except as  amended  by this  Agreement,  all other  terms and
    conditions of the Lacey Agreement are hereby ratified and confirmed.

          IN WITNESS  WHEREOF,  this  Agreement has been executed by the parties
hereto as of the date set forth next to the signatures below, to be effective on
the Effective Date.




/s/Dennis Lacey
-------------------------------
DENNIS J. LACEY

Date:            7-1-97
       ------------------------



CAPITAL ASSOCIATES, INC.


By: /s/J. D. Walker
    ---------------------------
    J. D. Walker

Its:     Chairman of the Board
      -------------------------

Date:     July 1, 1997
       ------------------------


CAPITAL ASSOCIATES INTERNATIONAL, INC.


By: /s/J. D. Walker
    ---------------------------
    J. D. Walker

Its:     Chairman of the Board
      -------------------------

Date:     July 1, 1997
       ------------------------


                                     3


<PAGE>




                SECOND AMENDED AND RESTATED DENNIS J. LACEY
                       EXECUTIVE EMPLOYMENT AGREEMENT
                       ------------------------------

          This Second Amended and Restated Dennis J. Lacey Executive  Employment
Agreement  (this  "Agreement"),  dated as of  October  1, 1995  (the  "Effective
Date"), is made by and between (1) Capital Associates, Inc. ("CAI"), and Capital
Associates  International,  Inc.  ("CAII")  (CAI  and  CAII  being  collectively
referred to herein as the "Company"), and (2) Dennis J. Lacey ("Lacey").

                                    RECITALS
                                    --------

          WHEREAS,  the Company and Lacey  previously  entered into that certain
Dennis  J.  Lacey  Executive   Employment  Agreement  (the  "Initial  Employment
Agreement"), which became effective on and as of September 7, 1991;

          WHEREAS,  the Company and Lacey  previously  entered into that certain
Amendment  No.  1  to  the  Dennis  J.  Lacey  Executive   Employment  Agreement
("Amendment No. 1"), which became effective on and as of September 7, 1992;

          WHEREAS,  as part of Amendment No. 1, the parties extended the term of
the Initial Employment Agreement for an additional 24 months,  commencing on and
as of September 7, 1992;

          WHEREAS,  the Company and Lacey  previously  entered into that certain
Amendment  No.  2  to  the  Dennis  J.  Lacey  Executive   Employment  Agreement
("Amendment No. 2"), which became effective on and as of April 9, 1993;

          WHEREAS,  the Company and Lacey  previously  entered into that certain
Amendment  No.  3  to  the  Dennis  J.  Lacey  Executive   Employment  Agreement
("Amendment No. 3"), which became effective on and as of April 9, 1993;

          WHEREAS,  the Company and Lacey  previously  entered into that certain
First  Amended  and  Restated  Dennis J. Lacey  Executive  Employment  Agreement
("First Amended Employment Agreement"), dated as of June 15, 1993;

          WHEREAS,  the Company and Lacey  previously  entered into that certain
Amendment  No. 1 to  First  Amended  and  Restated  Dennis  J.  Lacey  Executive
Employment Agreement ("Amendment No. 1 to First Amended Employment  Agreement"),
dated as of August 26, 1994;


                                       1
<PAGE>







          WHEREAS, the parties now desire to amend and restate the First Amended
Employment Agreement,  as previously amended by Amendment No. 1 to First Amended
Employment Agreement;

          WHEREAS,  all references to the "Second Amended Employment  Agreement"
in Exhibit A hereto shall hereinafter be deemed to refer to this Agreement; and

          WHEREAS, except as expressly set forth in this Agreement and Exhibit A
hereto,  on and as of the Effective  Date,  this  Agreement and Exhibit A hereto
shall  supersede  and  supplant  the  First  Amended  Employment  Agreement,  as
previously amended by Amendment No. 1 to First Amended Employment Agreement, and
Exhibit A thereto, in its entirety, effective on and as of the Effective Date.

          NOW, THEREFORE, in consideration of the promises and the covenants set
forth  herein,  and  for  good  and  valuable  consideration,  the  receipt  and
sufficiency  of which are hereby  acknowledged,  the  parties,  intending  to be
legally bound, hereby agree as follows:


                                    AGREEMENT
                                    ---------


          i.        Employment Agreement.  This  Agreement  sets  forth  (A) the
               terms and  conditions on which the Company has previously  agreed
               to employ, and is currently employing, Lacey and (B) the terms on
               which Lacey  has  agreed  to continue  to provide  services as an
               employee t o the Company during the Term of this  Agreement.  The
               nature  of  the  services  to  be  provided  by  Lacey under this
               Agreement are set forth in the section of this Agreement entitled
               "Title and Duties."

         ii.        Effective Date.  The  "Effective  Date"  shall be October 1,
               1995.

        iii.        Term.  The "Term" of this Agreement shall commence on and as
               of the Effective Date and shall expire UPON THE EARLIEST TO OCCUR
               OF  (A)  the  close of  business on  September  30, 1997,  unless
               renewed  by  the parties for one or more additional  twelve-month
               periods (there being no limit on the number of subsequent twelve-
               month renewals, or renewals for whole twelve-month multiples,  of
               this  Agreement  to  which the  parties  may  agree),  (B) a date
               mutually agreed to by the parties or (C) termination  of  Lacey's
               employment by the Company or Lacey.

         iv.        Title and Duties.  For the period  August 31, 1991,  through
               September 6, 1991 (the "Interim  Period"), Lacey served,  at  the
               request of the Board of Directors of CAI (the "Board"), as Acting
               President,  Acting Chief  Executive  Officer and Chief  Financial
               Officer of CAI and CAII.


                                       2
<PAGE>





          Commencing  on September 7, 1991,  at the request of the Board,  Lacey
assumed the positions of President and Chief  Executive  Officer of CAI and CAII
with the powers,  authority,  duties and responsibilities  specified at any time
and from time to time by a majority  of the Board and as set forth in the Bylaws
of the Company.

          On and as of the  Effective  Date,  Lacey  shall  continue to serve as
President  and  Chief  Executive  Officer  of CAI  and  CAII  with  the  powers,
authority,  duties and  responsibilities  specified at any time and from time to
time by a majority of the Board and as set forth in the Bylaws of the Company.

          v.        TERMINATION  OF EMPLOYMENT.  A majority of the Board may (A)
               terminate Lacey's  employment  at any time, (B) determine  not to
               renew this Agreement effective on and as of September  30,  1997,
               and/or  (C) if  this  Agreement  is  renewed for a period  beyond
               September 30, 1997, determine not to renew such extension of this
               Agreement  on  and as  of the expiration date of such  extension,
               subject  in  the  case  of  (A)  (B) and  (C)  to the  terms  and
               conditions  set  forth in  "Severance"  below and  the section of
               Exhibit A hereto entitled "Severance Benefits."

         vi.        BASE SALARY DURING EMPLOYMENT.  Commencing on the  Effective
               Date,  Lacey's  base  salary  shall  be  $250,000  per year on an
               annualized basis ("Base Salary"), subject to increase at any time
               during the Term of this Agreement by the  Compensation  Committee
               of the  Board  (the  "Compensation  Committee"),  in its sole and
               absolute  discretion.  In determining  whether an increase in the
               Base  Salary is  appropriate  at any time during the Term of this
               Agreement, the Compensation Committee shall consider, among other
               things,  (A) profitability of the Company,  (B) Stock (as defined
               below)  price  and (C) such  other  factors  as the  Compensation
               Committee deems appropriate, in its sole and absolute discretion.
               Base  Salary  shall be  payable  in  accordance  with  prevailing
               Company payroll policies.

        vii.        BONUS DURING EMPLOYMENT.  The  dollar  amount  and timing of
               payment of all annual bonuses (the "Bonus"),  if any,  payable to
               Lacey for any fiscal  year of the  Company  that ends on the last
               day of,  or at any time  during,  the Term of this  Agreement  (a
               "Fiscal Year") shall be determined by the Compensation Committee.
               The Bonus,  if any,  payable  for any Fiscal Year will be paid no
               later than 45 days after the completion and  certification of the
               audited financial statements of CAI for such Fiscal Year and will
               be payable to Lacey  notwithstanding  his employment  status with
               the  Company  at the  time the  Bonus  (i) is  authorized  by the
               Compensation Committee or (ii) is payable to Lacey.

       viii.        OTHER BENEFITS DURING EMPLOYMENT.  Lacey  shall be  entitled
               to  participate  in  all   Company   employee   benefit  programs
               including,  but  not  limited  to,  the following:  (A) insurance
               (life, medical, dental, prescription, etc.); (B) a $500 per month
               automobile  allowance;  (C) vacation and sabbatical in accordance

                                       3
<PAGE>




               with  prevailing  Company  policy;  (D) 401K  plan  and/or  other
               qualified  and  nonqualified  pension,  profit  sharing and other
               retirement plan  participation to the extent available under law;
               and (E) any and all other benefits offered to Company  employees.
               All of the benefits  described in the preceding sentence shall be
               in  accordance  with  prevailing  Company  policy at the time the
               benefit is extended to Lacey.


          The Company previously agreed, and hereby confirms its agreement, that
it  will  continue  to pay,  on  Lacey's  behalf,  throughout  the  Term of this
Agreement,   the  "excess"  life  insurance   premiums  and  "excess"  long-term
disability insurance premiums set forth in Exhibit B hereto.

         ix.        EXPENSE  REIMBURSEMENT  DURING  EMPLOYMENT.  Lacey  will  be
               reimbursed for reasonable  business  expenses  incurred by him on
               behalf of the Company (not including legal fees incurred by Lacey
               in  connection   with  the  negotiation  and  execution  of  this
               Agreement), upon submission of properly completed Company expense
               report/reimbursement forms.

          x.        O&D INSURANCE AND INDEMNIFICATION.  Lacey  will be  entitled
               to  the  same  officer  and  director  liability   insurance  and
               indemnification  as other  officers and  directors of the Company
               for any  period  during  which  Lacey  served  or  serves in such
               capacities.

         xi.        SEVERANCE.  Upon  termination  of  his  employment  with the
               Company,  Lacey shall be entitled to the  severance  benefits set
               forth in Exhibit A hereto.

        xii.        STOCK OPTION.  Pursuant to a stock option  agreement in  the
               form attached as Exhibit C to this Agreement and  incorporated by
               reference,  Lacey is granted, on and as of the Effective Date, an
               option (the "Stock  Option") to purchase up to 150,000  shares of
               common stock of the Company  ("Stock"),  the terms and conditions
               of which are set forth in the stock option agreement  attached as
               Exhibit C hereto.

          On and as of September 6, 1991, the Company  granted Lacey (A) 100,000
shares of Stock, subject to certain repurchase rights on the part of the Company
(the "First Stock Award"), all of which were immediately vested, and (B) 500,000
additional  shares of Stock,  subject to a vesting  schedule  (the "Second Stock
Award").  The Company's  repurchase rights with respect to the First Stock Award
expired on March 31,  1992.  On and as of August 28, 1992,  the Company  granted
Lacey an additional 25,000 shares of Stock (the "Third Stock Award").  On and as
of January 14, 1993,  the Company  granted Lacey an additional  25,000 shares of
Stock (the "Fourth  Stock  Award").  On  and  as of  April 8, 1993,  the Company

                                       4


<PAGE>




 
advised Lacey that he had "earned" 50,000 Second Stock Award shares,  which have
been delivered to Lacey. The Company  previously filed a registration  statement
under the Securities Act of 1933, as amended (the "Securities Act"), on Form S-8
covering (1) all of the shares  comprising the First,  Second,  Third and Fourth
Stock Awards plus (2) an additional  150,000  shares of Stock (all of the shares
described  in (1) and (2) are  referred  to herein as the  "Registered  Stock").
Effective  as of the  Effective  Date,  the  Company and Lacey  hereby  agree to
terminate,  and Lacey hereby relinquishes,  any and all right, title or interest
Lacey may have in and to, or to  receive,  all or any  portion of the  remaining
450,000 "unearned" Second Stock Award shares.

       xiii.        COMPLETE AGREEMENT.  This  Agreement with  exhibits embodies
               the complete agreement and understanding  between the Company and
               Lacey  and,  as of  the  Effective  Date,  supersedes  all  prior
               understandings,  agreements or representations by or between them
               with respect to the matters addressed herein.

        xiv.        ASSIGNMENT.  Lacey  may  assign  any  of  his  financial  or
               monetary  rights  under this  Agreement  to an  immediate  family
               member (i.e., wife or children).  Lacey may not assign any of his
               rights under this  Agreement to anyone other than a family member
               or any of his obligations under this Agreement, without the prior
               written consent of the Company. The Company may not assign any of
               its rights or obligations  under this Agreement without the prior
               written consent of Lacey.

         xv.        REMEDIES.  The Company and Lacey will be entitled to enforce
               their rights under this Agreement specifically to recover damages
               by reason of any breach of any provision of this Agreement and to
               exercise  all other  rights to which  they may be  entitled.  The
               Company  and Lacey  agree  that  monetary  damages  may not be an
               adequate  remedy for breach of the  provisions of this  Agreement
               and that either of them may, in their sole  discretion,  apply to
               any court for specific  performance  and/or  injunctive relief in
               order to enforce or prevent violations of this Agreement.

        xvi.        CHOICE OF LAW.  This  Agreement  shall  be  governe  by  and
               construed in  accordance  with the laws of the State of Colorado,
               exclusive of the provisions of such laws relating to conflicts of
               law.


       xvii.        MODIFICATION  AND  WAIVER.  No  supplement,  modification or
               amendment of this Agreement  shall be binding unless  executed in
               writing by both of the  parties  hereto.  No waiver of any of the
               provisions of this Agreement shall be deemed or shall  constitute
               a waiver of any other provisions  hereof (whether or not similar)
               nor shall such waiver constitute a continuing waiver.


                                       5

<PAGE>



      xviii.        SEVERABILITY.  If  any   provision  or  provisions  of  this
               Agreement shall be held to be invalid,  illegal or  unenforceable
               for  any  reason  whatsoever  (A)  the  validity,   legality  and
               enforceability  of the  remaining  provisions  of this  Agreement
               (including,  without  limitation,  each portion of any section of
               this Agreement  containing any such provision held to be invalid,
               illegal or unenforceable,  that is not itself invalid, illegal or
               unenforceable)  shall  not in any  way be  affected  or  impaired
               thereby,  and (B) to the fullest extent possible,  the provisions
               of this Agreement (including, without limitation, each portion of
               any section of this Agreement  containing any such provision held
               to be  invalid,  illegal  or  unenforceable,  that is not  itself
               invalid,  illegal or  unenforceable)  shall be construed so as to
               give effect to the intent manifested thereby.

        xix.        COUNTERPARTS.  This Agreement may be executed in one or more
               counterparts,  each of which shall for all  purposes be deemed to
               be an original and all of which together shall constitute one and
               the same Agreement. Only one such counterpart signed by the party
               against  whom  enforceability  is sought  needs to be produced to
               evidence  the  existence  of this  Agreement.  Signatures  may be
               exchanged by telecopy,  with original  signatures to follow. Each
               party to this  Agreement  agrees that it will be bound by its own
               telecopied   signature   and  that  it  accepts  the   telecopied
               signatures of the other parties to this  Agreement.  The original
               signature  pages shall be  forwarded to Ballard  Spahr  Andrews &
               Ingersoll,  c/o John L. Ruppert,  Esq.,  1225 17th Street,  Suite
               2300,  Denver,  Colorado 80202,  and Mr. Ruppert will provide all
               parties with a copy of an originally executed Agreement.

         xx.        BINDING EFFECT.  This  Agreement  shall be binding upon each
               party hereto and such party's heirs, successors and assigns.


 
                                      6

<PAGE>

          IN WITNESS  WHEREOF,  this  Agreement has been executed by the parties
hereto as of the Effective Date.


                                             The Board of Directors of
                                             Capital Associates, Inc.


/s/Dennis Lacey                              By:  /s/J. D. Walker
--------------------------                        ---------------------------
Dennis J. Lacey                                   J. D. Walker

Dated:  ------------------                   Title:  Director
                                                     ------------------------

                                             Dated:  5 Oct. 95
                                                     ------------------------


                                             The Board of Directors of
                                             Capital Associates
                                             International, Inc.

                                             By:  /s/J. D. Walker
                                                  ---------------------------
                                                  J. D. Walker

                                             Title:  Director
                                                     ------------------------

                                             Dated:     5 Oct. 95
                                                    -------------------------

                                       7

<PAGE>





                                    EXHIBIT A
                         TO SECOND AMENDED AND RESTATED
                                 DENNIS J. LACEY
                         EXECUTIVE EMPLOYMENT AGREEMENT
                               SEVERANCE BENEFITS
                               ------------------

          This Exhibit A is a part of that certain  Second  Amended and Restated
Dennis J. Lacey Executive Employment Agreement, dated as of October 1, 1995 (the
"Second Amended Employment  Agreement"),  by and among Capital Associates,  Inc.
("CAI"),  Capital  Associates  International,  Inc. ("CAII") (CAI and CAII being
collectively referred to herein as the "Company") and Dennis J. Lacey ("Lacey"),
and all  provisions of the Second  Amended  Employment  Agreement are applicable
hereto to the extent not otherwise  inconsistent  with the terms of this Exhibit
A. To the  extent  of any  conflict  between  the  terms of the  Second  Amended
Employment  Agreement  and this  Exhibit  A, the  terms of this  Exhibit A shall
govern.

          Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Second Amended Employment Agreement.

          1.   GROUNDS FOR TERMINATION.  The grounds for termination  of Lacey's
employment  with the Company are set forth in the section of the Second  Amended
Employment Agreement entitled "Termination of Employment."

          2.   TERMINATION PAYMENTS.

          (A)  TERMINATION OF LACEY'S EMPLOYMENT BY THE  COMPANY "FOR CAUSE." In
the event the Company terminates Lacey's employment with the Company "for cause"
during the Term of the Second Amended Employment Agreement,  Lacey shall receive
no termination payment(s).

          "For cause" shall mean (i) dishonesty or fraud;  (ii) commission of an
act involving moral  turpitude;  (iii)  commission of a felony;  (iv) deliberate
injury or attempted deliberate injury to the Company; (v) dereliction or neglect
of duty, as determined  by the Board in its sole and absolute  discretion;  (vi)
intentional or willful failure to carry out the legally approved instructions of
the Board,  as determined by the Board in its sole and absolute  discretion;  or
(vii) material breach of confidentiality,  non-solicitation,  and other negative
covenants of the Second Amended Employment Agreement.

          (B)  TERMINATION OF LACEY'S  EMPLOYMENT BY THE COMPANY OTHER THAN "FOR
CAUSE." In the event the Company  terminates Lacey's employment with the Company
other  than  "for  cause"  during  the  Term of the  Second  Amended  Employment
Agreement,  Lacey shall receive  termination  payments equal to 100% of his Base
Salary as of the effective date of the  termination  of his employment  with the


                                       1

<PAGE>


Company (his "Termination Date"). All payments under this paragraph (B) shall be
paid to Lacey in twelve (12) equal monthly installments,  with the first payment
occurring on the  Termination  Date followed by eleven (11)  successive  monthly
payments in the same amount on the first eleven (11) monthly  anniversary  dates
of the  Termination  Date;  provided,  however,  that any remaining  termination
payment installment shall be reduced by any payments Lacey receives by achieving
gainful employment during the installment payment period.

          A "Change of Control"  of the  Company (as defined in the  immediately
following  paragraph)  shall be deemed a  termination  of Lacey  other than "for
cause";  provided,  however,  that a Change  of  Control  shall  not be deemed a
termination  of Lacey  other  than "for  cause" if (i) the  Company  remains  in
existence  after the  Change of  Control  and the  Company  retains  Lacey in an
executive level position for the remaining Term of the Second Amended Employment
Agreement  with  substantially   comparable   accountability  and  substantially
equivalent compensation to his accountability and compensation immediately prior
to the  Change of  Control or (b) if the  Company  does not remain in  existence
following  the Change of Control,  the  "Surviving  Company"  (as defined in the
immediately following paragraph) after the Change of Control retains Lacey in an
executive level position for the remaining Term of the Second Amended Employment
Agreement  with  substantially   comparable   accountability  and  substantially
equivalent compensation to his accountability and compensation immediately prior
to the Change of Control and, if Lacey  chooses not to exercise his Stock Option
in full in  connection  with the Change of  Control,  issues/grants  replacement
stock  options  to  acquire  shares of stock of the  Surviving  Company to Lacey
having comparable value and substantially the same terms as Lacey's Stock Option
(as defined in paragraph 12 of the Second Amended Employment Agreement).

          A "Change of Control"  shall be deemed to occur upon the  happening of
any of the  following  events:  (1) the Board adopts a resolution  to the effect
that a change of control has occurred or is anticipated to occur and such change
of control  does in fact  occur;  (2) any change of control of the  Company of a
nature that is required to be reported on Form 8-K under the Securities Exchange
Act of 1934,  as amended  (the  "Exchange  Act");  (3)  individuals  who, on the
Effective Date, constitute the Board cease for any reason to constitute at least
a majority thereof unless the election,  or the nomination for election, of each
new director was approved by a vote of at least  two-thirds  of the directors on
the Board prior to such  election or  nomination,  including  two-thirds  of any
directors then still in office who were directors on the Effective Date; (4) the
approval by the  stockholders of the Company of any merger or  consolidation  of
the  Company  with  any  other  corporation  or  entity  or the  sale  or  other
disposition of all or  substantially  all the assets of the Company to any other


                                       2

<PAGE>


person, corporation or entity (such other corporation or entity in the case of a
merger,  consolidation or sale of all or substantially  all of the assets of the
Company being referred to herein as the "Surviving Company"), and (5) any person
(within the meaning of Section 13(b) of the Exchange Act) becomes the beneficial
owner (directly or indirectly) of securities of the Company  representing 50% or
more of the combined voting power of the Company's then  outstanding  securities
entitled to vote generally in the election of directors; provided, however, that
the  acquisition by MCC Financial  Corporation or its affiliates or subsidiaries
of securities  of the Company  representing  50% or more of the combined  voting
power of the Company's then outstanding securities entitled to vote generally in
the  election of  directors  shall not be  considered  a "Change of Control" for
purposes of this paragraph 2(B).

          (C) VOLUNTARY  TERMINATION  BY LACEY.  In the event Lacey  voluntarily
terminates his employment with the Company during the Term of his Second Amended
Employment Agreement, Lacey shall receive no termination payments.

          (D)  INVOLUNTARY   TERMINATION  (I.E.,  DEATH,  PERMANENT  DISABILITY,
INCOMPETENCE,  ETC.) BY LACEY.  In the event Lacey involuntarily  terminates his
employment  with the Company  during the Term of his Second  Amended  Employment
Agreement,  such  termination  shall be treated  for all  purposes of the Second
Amended  Employment  Agreement  and this Exhibit A as a  termination  of Lacey's
employment  by the Company other than "for cause," as described in paragraph (B)
above.


          3.  EXPENSE   REIMBURSEMENT.   In  the  event  Lacey's  employment  is
terminated  (without regard to the reason for such  termination),  Lacey will be
reimbursed for reasonable expenses, including travel and entertainment expenses,
incurred by him on behalf of the Company while he was an employee of the Company
and  for  which  he  submits  to  the   Company   properly   completed   expense
report/reimbursement  forms on or before the 15th  business  day  following  his
Termination Date.

          4. OTHER  PAYMENTS.  In the event Lacey is  terminated  by the Company
other than "for cause" (or is treated as if  terminated  other than "for cause")
during the Term of his Second Amended Employment Agreement,  Lacey shall receive
the  following  termination  benefits  from  the  Company,  in  addition  to the
termination payments referenced in paragraph 2. above:

          (A) The  Company  agrees to  maintain  in full  force and  effect  all
medical, health and other similar insurance on behalf of Lacey and his immediate
family,  on the terms and conditions in effect for Lacey on the Termination Date
for the period for which  Lacey  receives  termination  payments as set forth in
clause  (B)  of  "Termination  Payments"  above  and  COBRA  benefits thereafter

                                       3

<PAGE>






commencing on the first anniversary date of his Termination Date.

          (B) The Company will pay to Lacey his share of any bonuses declared by
the Compensation Committee,  prorated based upon the aggregate dollar amounts of
the  bonus and  Lacey's  employment  for the  portion  of the year  prior to his
Termination  Date;  provided,  however,  that Lacey  acknowledges  that  nothing
contained herein shall obligate the  Compensation  Committee to declare any such
bonus or give Lacey a legal right to enforce the declaration of such bonus.

          5.  CONSULTING OR PART-TIME  ACTIVITIES.  Following his termination by
the Company other than "for cause," Lacey will, if requested by the Company,  be
available to provide consulting services to the Company, as and when needed (not
to exceed  ten (10) hours per week,  as  determined  by the  Company in its sole
discretion),  for a period of  twelve  (12) full  months  following  the date of
termination  of  his  employment  with  the  Company  (the  "Initial  Consulting
Period"),  unless  he  shall  become  gainfully  employed  during  such  Initial
Consulting  Period at which time any  remaining  consulting  service  obligation
described herein shall  immediately  terminate.  The Company agrees to reimburse
Lacey for all pre-approved,  actual out-of-pocket  expenses incurred by Lacey in
connection  with this  arrangement  during the  Initial  Consulting  Period.  If
Lacey's  consulting  services are requested  after the expiration of the Initial
Consulting  Period,  Lacey agrees to negotiate in good faith with the Company to
agree on terms pursuant to which such services will be provided.

          Following  his  termination  from the Company "for cause" or following
his voluntary  termination,  Lacey will have no obligation to provide consulting
services to the Company.

          6.  AGREEMENT NOT TO SOLICIT  EMPLOYEES OR OTHERS.  Lacey agrees that,
through and including the third annual anniversary of the date of termination of
his  employment  with the  Company,  he will not,  directly or  indirectly,  (A)
solicit,  induce,  interfere  with or hire away,  or assist  any third  party in
soliciting,  diverting,  interfering  with  or  hiring  away  any  part-time  or
full-time employee of the Company, whether or not such employment is pursuant to
a written  agreement,  is for a  specified  term or is "at  will," (B) induce or
attempt to induce any customer,  to cease doing business with the Company, or in
any way interfere with the relationship  between any such party and the Company,
and (C) retain as an employee any former part-time or full-time  employee of the
Company within six months  following such  employee's  termination of employment
with the  Company.

          7. OWNERSHIP, NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION.


                                       4

<PAGE>

          (A) Except as set forth  below,  Lacey  agrees  that all  Confidential
Information  (as  defined  below)  and  all  physical  embodiments  thereof  are
confidential to the Company. Lacey agrees that he will not at any time, directly
or indirectly,  use, disclose or make available to any person, concern or entity
any  Confidential  Information,  except  with the prior  written  consent of the
Company or as may be required by law.

          (B) "Confidential Information" shall be broadly defined to include any
and all data and information relating to the business of the Company,  including
without limitation: (i) information and material relating to lessee and investor
relations;   (ii)  lease  and  financing  documentation;   (iii)  financial  and
accounting  affairs of the Company;  (iv) business  agreements  with vendors and
lenders; (v) pricing information;  (vi) customer lists; (vii) business plans and
strategies;  (viii) any and all  information  relating  to  present or  proposed
Company  debt or equity  products;  (ix)  marketing  plans  and data;  (x) trade
secrets;  and (xi) any other  information  that  Lacey  knows or should  know is
treated as confidential  by the Company.  "Confidential  Information"  shall not
include  any data or  information  that has been  voluntarily  disclosed  to the
public by the  Company or that  otherwise  enters  the  public  domain by lawful
means.

          IN WITNESS  WHEREOF,  this Exhibit A has been  executed by the parties
hereto as of the Effective Date of the Second Amended Employment Agreement.


                                             The Board of Directors of
                                             Capital Associates, Inc.


/s/Dennis Lacey                              By:  /s/J. D. Walker
--------------------------                        ---------------------------
Dennis J. Lacey                                   J. D. Walker

Dated:  ------------------                   Title:  Director
                                                     ------------------------

                                             Dated:  5 Oct. 95
                                                     ------------------------


                                             The Board of Directors of
                                             Capital Associates
                                             International, Inc.

                                             By:  /s/J. D. Walker
                                                  ---------------------------
                                                  J. D. Walker

                                             Title:  Director
                                                     ------------------------

                                             Dated:     5 Oct. 95
                                                    -------------------------

                                       5