Document:

COMMERCIAL PROPERTY LEASE AGREEMENT

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

         1.  PROPERTY  LEASED.   Lessor,  in  consideration  of  the  rents  and
agreements  to be paid and  performed  by  Lessee,  does  lease to Lessee  those
premises situated at 395 West 1400 North, in Logan, Cache County, State of Utah,
and further  described  on Exhibit  "A"  attached  hereto and by this  reference
incorporated herein.

         2.  TERM. This lease  shall  continue  for the term of ten (10)  years,
commencing on December 1, 1999 and continuing  thereafter  through  November 30,
2009, or until earlier  terminated  as set forth herein.  However,  in the event
that Lessee shall notify Lessor in writing of its intention to renew this lease,
which  notice  must be  given  not  less  than  ninety  (90)  days  prior to the
expiration  of the initial term hereof,  then this lease shall be renewed  under
the same terms as set forth  herein,  including  the annual  adjustments  of the
rentals hereunder, for an additional period of sixty (60) months.

         3.  RENTAL. Rental payments shall become due and payable hereunder on a
monthly basis, payable in advance, commencing on the first day of December, 1999
and continuing on the first day of each month thereafter until November 1, 2004,
when the last of such monthly  rental  payments shall be paid.  Rental  payments
shall  initially  commence at the rate of $13,500.00  per month;  and, upon each
annual  anniversary date of this lease  agreement,  the monthly rentals shall be
adjusted  by the amount of any  increase  in the  Consumer  Price Index over the
immediately  preceding  year.  Rentals  shall be  payable  to the  Lessor at its
office,  or to such person or at such other place as the Lessor may from time to
time designate in writing.

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         4.  USE OF  PREMISES. The  premises  shall be used for the  purpose  of
operating the Lessee's business of manufacturing and marketing pvc pipe fittings
and related  products,  and for no other  purposes  without the prior consent of
Lessor.  Lessee  shall not commit or permit to be  committed  any waste upon the
premises.  Lessee  shall  not use the  premises,  or any part  thereof,  for any
purpose  other than the purpose or purposes for which said  premises are leased,
and no use in any event shall be made of the premises, nor acts done, which will
increase  the hazard of damage to the  premises,  or injury to those in or about
the  premises,  or the existing rate of insurance  upon the building,  nor shall
Lessee sell,  keep or use in or about said  premises any article which may limit
the coverage  afforded by the Utah Standard Form fire insurance  policy,  or the
sale, presence, or use of which is prohibited by law.

         Lessee shall keep said premises open for business during usual business
hours and failure to do so for more than thirty (30) days, other than for repair
or remodeling,  may be deemed a breach of lease by Lessee at Lessor's  election.
Lessee shall, at Lessee's sole cost and expense,  without  obligation to Lessor,
observe in the use of the  premises  all  municipal,  county,  state and federal
regulations,  ordinances and statutes now in force, or which may hereafter be in
force, and failure to do so shall be a material breach of this agreement.

         5.  POSSESSION.  The date of  possession  of said  leased  premises  by
Lessee pursuant to this lease shall be the lst day of December, 1999.

         6.  INSURANCE. Lessee shall maintain fire and casualty insurance on the
real and personal  property subject to this lease and shall hold Lessor harmless
from any loss in connection  therewith.  Lessee  further  agrees to take out and
keep in force  during the life hereof,  at Lessee's  expense,  public  liability
insurance to protect against any liability to the public, incident to the use of
or resulting from any occurrence in or about said premises.  The liability under
such insurance shall be not less than  $500,000.00  combined single limit or the
equivalent on bodily injury and property damage.

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         7.  REPAIR AND MAINTENANCE.  The repair,  maintenance and upkeep of the
leased premises shall be as follows: Lessor shall be responsible for: Structural
components in the buildings, except as may be required to maintain or repair the
same as the  result  of the use or  damage  thereof  by  Lessee or others in the
conduct  of  Lessee's  business.  Lessee  shall be  responsible  for:  All other
maintenance.

         8.  ALTERATIONS.  Lessee  shall  not  make or  permit  to be  made  any
additions or alterations of the premises or any part thereof without the written
consent of Lessor,  and any additions to or alterations  of said premises,  when
permitted to be made,  except movable  furniture,  trade  fixtures,  and drapery
installed  by  Lessee,  shall  become at once a part of the realty and belong to
Lessor  and shall not be  removed  by  Lessee  at the end of his  occupancy,  or
otherwise,  except upon written consent or order of Lessor. Any linoleum, rubber
tile or other floor  covering  affixed to the floors shall become at once a part
of the realty and belong to Lessor and shall not be removed by Lessee at the end
of his occupancy, or otherwise, except upon written consent or order of Lessor.

         9.  MECHANIC'S  LIENS. It is expressly  agreed that if any work that is
performed by Lessee or Lessee's  agents,  employees or  representatives,  either
prior to or  subsequent  to the  possession  by  Lessee  of the  above-described
premises, shall give rise to any lien against the leased premises,  Lessee shall
indemnify  Lessor  against and save Lessor  harmless from any and all mechanic's
liens or claims of liens and all attorney  fees,  costs and  expenses  which may
accrue,  grow out of, or be incurred by reason of said work  performed by Lessee
or Lessee's agents, employees or representatives.

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         10. UTILITIES. Lessee shall pay for all gas, heat, light, power, water,
rubbish  removal,  telephone  service,  and all other services  supplied to said
premises.

         11. INSPECTION  AND ENTRY BY OWNER.   Lessee  shall  permit  Lessor and
Lessor's agents to enter into and upon the premises at all reasonable  times for
the purpose of  inspecting  the same,  or for the  purpose of making  reasonable
repairs,  alterations  or additions to any portion of said premises which Lessor
may see fit to make, including installation of pipes, conduits,  etc. to service
adjacent property, without any reduction or rebate of rent to Lessee for loss of
occupancy  or quiet  enjoyment of the premises  thereby  occasioned,  and Lessee
shall permit Lessor at any time after sixty (60) days prior to expiration of the
leasehold  term to place upon the  premises  "for rent,"  "for  lease," or other
signs.

         12. BANKRUPTCY OR  INSOLVENCY.   Should the Lessee  become  bankrupt or
insolvent,  either  voluntarily or involuntarily,  or a receiver be appointed to
take charge of Lessee's assets, or general assignment be made for the benefit of
creditors, the same shall constitute a breach of the terms of this lease and the
Lessor may declare  the lease  terminated,  and the Lessee  shall have no right,
title or  interest  in the  property,  and the Lessor  may keep as  damages  any
advanced rental.

         13. DEFAULT.   Lessee  shall pay rent to Lessor at such place as may be
assigned from time to time by Lessor, at the time provided as aforesaid, without
deduction or delay.  In the event of failure of Lessee so to do, or in the event
of a breach of any other  condition or  agreement by Lessee,  it shall be lawful
for Lessor, after giving to Lessee a fifteen (15) day written notice of default,
and after failure by Lessee within said fifteen (15) days to remedy or cure said

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default,  and after the lapse of said  fifteen  (15) days,  to re-enter and take
possession of the said premises and to remove all persons and property therefrom
and to repossess said premises.  Any such re-entry or repossession or any notice
served in  connection  therewith  shall not  operate to release  Lessee from any
obligations for rental or otherwise  under this lease,  and shall be in addition
to any available  remedies and time set forth for notices given  pursuant to the
Utah unlawful detainer statutes.

         If Lessee  shall be in  default  in  performance  of any  condition  or
agreement, or shall abandon or vacate the premises, Lessor shall have the right,
after giving the required written notice of default, and after failure by Lessee
to timely  remedy  or cure said  default,  to relet  the said  premises,  or any
portion thereof, for such rent and upon such terms as Lessor may see fit. Lessee
shall pay the  expenses  of such  reletting,  including  any and all real estate
broker's commissions.

         All remedies herein given Lessor shall be cumulative and in addition to
other legal and equitable rights which Lessor may have, and if Lessor institutes
legal  action to collect the total or balance of the rent hereby  reserved,  the
filing of such action prior to the  expiration of the full  leasehold term shall
not be deemed  premature as a matter of law  irrespective  of whether Lessor has
retaken possession and relet the premises for his own account or for the account
of Lessee.

         14. ATTORNEY FEES. Should either party employ an attorney in connection
with the  violation  of the  terms of this  lease,  or for the  preparation  and
serving of notice or other matters,  and whether suit is filed or not, the party
so  employing  an  attorney  and the  prevailing  party  shall  be  entitled  to
reasonable  costs and attorney fees in addition to all other amounts as provided
for in this lease.

         15. ASSIGNMENT AND SUBLEASE. Lessee shall not assign this lease, or any
interest  therein,  and  shall not lease or  sublet  the  premises,  or any part
thereof,  or  any  right  of  privilege  appurtenant  thereof,  or  mortgage  or

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hypothecate the leasehold,  without the prior written  consent of Lessor,  which
consent  shall  not be  unreasonably  withheld.  A  consent  to one  assignment,
subletting  or  hypothecation  shall  not  be  construed  as a  consent  to  any
subsequent assignment, subletting or hypothecation.  Unless such written consent
has been had and obtained,  any assignment or transfer of this lease,  or of any
interest  therein,  or any subletting or  hypothecation,  either by voluntary or
involuntary act of Lessee or by operation of law, or otherwise,  may be deemed a
breach  of  lease  by  Lessee  at  Lessor's  election  and  any  such  purported
assignment,  transfer,  subletting or hypothecation  without such consent may be
deemed by Lessor to be null and void.  Lessor's  consent to any such assignment,
transfer,  subletting or hypothecation  shall relieve Lessee from any obligation
under this lease.

         16. DESTRUCTION OF PREMISES.  In the event of a partial  destruction of
the said premises during the said term,  from any cause,  Lessor shall forthwith
repair the same,  provided such repair can be made within ninety (90) days under
the laws and regulations of state, federal, county or municipal authorities, but
such partial  destruction shall in no way annul or void this lease,  except that
Lessee shall be entitled to a proportionate deduction of rent while such repairs
are  being  made  unless  the  Lessee  was the  cause of the  destruction.  Such
proportionate  deduction of rent to be based upon the extent to which the making
of such repairs shall  interfere  with the business  carried on by Lessee in the
said premises, but in no event shall it be more than the monthly rental. If such
repairs cannot be made in ninety (90) days, Lessor may, at his option, make same
within a reasonable time, this lease continuing in full force and effect and the
rent to be proportionately  rebated as aforesaid in this paragraph. In the event
that Lessor does not so elect to make such  repairs  which  cannot be made under
such laws and regulations,  this lease may be terminated at the option of either
party. In the event that the building is destroyed in which the demised premises
may be situated to the extent of not less than 33 1/3 percent of the replacement
costs  thereof,  Lessor may elect to terminate  this lease,  whether the demised
premises  be injured or not. A total  destruction  of the  building in which the
said premises may be situated shall terminate this lease.

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         17. CONDEMNATION.   If the whole or any part of the  premises  shall be
taken by any public authority under the power of eminent domain,  then the terms
of this lease  shall  cease as to the part so taken from the day  possession  of
that part shall be required for any public purpose, and rent shall be paid up to
that day, and on or before that day Lessee shall  elect,  in writing,  either to
cancel this lease or to continue in  possession of the remainder of the premises
under the terms herein provided, except that rent shall be reduced in proportion
to the amount of the premises  taken.  All damages awarded for such taking shall
belong to and be the  property  of Lessor,  whether  such  damages be awarded as
compensation  for  diminution  in  value to the  leasehold  or to the fee of the
premises.  Lessee hereby irrevocably assigns to Lessor any right to compensation
or damages to which Lessee may become entitled by reason of the  condemnation of
all or a part of the demised premises.

         18. DAMAGE  LIABILITY.  Lessee assumes all risks of injury or damage to
all persons and property,  excluding  injuries or damage caused by  pre-existing
structural defects or Lessor's negligent conduct, including, but not limited to,
all  property of Lessee and Lessor in or about the  premises,  and Lessee  shall
hold Lessor harmless for any such damage or injury; except that Lessee shall not
be liable to  Lessor  for  damage  or  injury  to  Lessor's  property  caused by
earthquakes, other acts of God, or Lessor's negligent conduct.

         It is  further  understood  and  agreed  that the  provision  herein in
connection  with the Lessor being insured  against  liability shall in no way be
construed as creating liability upon its part or admission of liability upon its
part, but is merely for the protection of Lessor.

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         19. OUTSIDE STORAGE.  There shall be no storage of any kind of material
on the  outside of the  building  herein  described,  except as  incident to the
normal operation of Lessee's business,  and except as may be expressly permitted
or allowed by permission of Lessor.

         20. TERMINATION.   On the last day of the term, or sooner  termination,
the Lessee shall  peaceably  and quietly leave and yield the premises to Lessor,
with fixtures and  appurtenances  in good condition and repair,  reasonable wear
and tear excepted.  Lessee shall leave the premises and  appurtenances  free and
clear of rubbish and clean;  and in the event Lessee fails to do so,  Lessor may
charge  Lessee for the  reasonable  cost  incurred  by Lessor in having the same
done.

         21. WAIVER.  Waiver  by  Lessor  of  any  breach  of any  condition  or
agreement  of this  lease by  Lessee  shall  not be deemed to be a waiver of any
subsequent breach of the same or any other condition or agreement by Lessee.

         22. SUCCESSOR.  The condition and  agreements  herein  contained  shall
apply  to and  bind the  heirs,  personal  representatives,  and  successors  in
interest of the parties hereto.

         23. TAXES.

             (a)  Payment of Taxes.  Lessee  shall pay all real  property  taxes
applicable to the premises during the term of this lease.

             (b) Definition of Real Property Tax. As used herein, the term "real
property tax" shall include any form of assessment, levy, penalty, or tax (other
than  inheritance or estate taxes) imposed by any authority having the direct or
indirect power to tax, including any city, county,  state or federal government,
or any school,  agricultural,  lighting,  drainage or other improvement district
thereof, as against any legal or equitable interest of Lessor in the premises or
on the real  property of which the premises are a part,  or as against  Lessor's
right to rent or other income.

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             (c) Personal Property Taxes.  Lessee shall pay prior to delinquency
all  taxes  assessed  against  and  levied  upon  trade  fixtures,  furnishings,
equipment and all other personal  property of Lessee,  and all personal property
leased to Lessee  hereunder,  whether such property is contained in the premises
or  elsewhere.   When  possible,   Lessee  shall  cause  said  trade   fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor.

         24. HOLDING OVER.  Holding over after the expiration of the term or any
extension  thereof  with the consent of Lessor  shall be a tenancy from month to
month at a minimum monthly rental of the then prevailing rent.

         25. SERVING OF NOTICE.  All notices as provided for in this lease or by
law shall be in writing and shall be served either  personally  or by mail,  and
shall be made upon the parties at the  following  address  unless a party serves
written notice upon the other party of a change of address:

         Lessor:           PVC, Inc.
                           395 West 1400 North
                           Logan, Utah 84341

         Lessee:           NACO INDUSTRIES, Inc.
                           395 West 1400 North
                           Logan, Utah 84341

         26. TOTAL  AGREEMENT.  It is understood  and agreed  between Lessor and
Lessee that this written lease agreement is the total  agreement  between Lessor
and Lessee with respect to the lease of the property  described herein, and that
there are no other  agreements,  oral or otherwise,  between them  affecting the
same.

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         IN WITNESS  WHEREOF,  the parties hereto have executed this document by
officers duly  authorized to do so,  effective as of the date and year first set
forth above.

         LESSOR:                             LESSEE:

         By/s/PVC, Inc.                      By:/s/Naco Industries, Inc.
         --------------                      ---------------------------
         Title:PVC, Inc.                     Title:NACO INDUSTRIES, Inc.

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                                   EXHIBIT "A"

                                Legal Description

                                       11EQUIPMENT LEASE AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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control of the Lessee,  the Lessee agrees, at its own cost and expense,  to keep
the equipment insured to protect all interests of the lessor,  against all risks
of loss, theft, or damage from every cause whatsoever for not less than the then
current value of the equipment and in addition  shall  purchase  insurance in an
amount  reasonable under the  circumstances to cover the liability of the Lessor
for public  liability  and  property  damage.  The  Lessor  shall be named as an
insured in all such  policies and as loss payee  thereunder.  Each insurer shall
agree by endorsement upon the policy or policies issued by it, that it will give
the Lessor 30 days prior written  notice of the effective date of any alteration
or cancellation.  The proceeds of such insurance,  whether  resulting from loss,
theft,  or damage or return  premium or otherwise,  shall be applied  toward the
replacement or repair of the equipment or the payment of the  obligations of the
Lessee  hereunder at the option of the Lessor.  The Lessee  hereby  appoints the
Lessor as Lessee's  attorney-in-fact  to make claim for, receive payment of, and
execute or endorse all documents, checks, or drafts for loss or damage or return
premium under any insurance policy issued on the equipment.

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

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

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

                                       7
<PAGE>

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

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

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

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

         20. REMEDIES.  Upon the  happening of any event of default as set forth
in  paragraph  19, the Lessor shall have the right to do the  following  without
demand or notice of any kind:

                  (a) Declare  due, sue for, and receive from the Lessee the sum
of all rents and other  amounts  due and owing  under this lease plus the sum of
the rents and other amounts to become  payable during the balance of the term of
this lease;

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

                                       8
<PAGE>

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

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

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

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

                       or

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

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

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

                                       9
<PAGE>

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

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

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

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

                                                     LESSOR:

                                                     By/s/PVC, Inc.
                                                     --------------
                                                     PVC, Inc.

                                                     LESSEE:

                                                     By/s/NACO INDUSTRIES, Inc.
                                                     --------------------------
                                                     Naco Industries, Inc.

                                       10
<PAGE>

                                   EXHIBIT "A"

            List of Personal Property and Equipment Subject to Lease

                                       11

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