Document:

<PAGE>

                                                                    Exhibit 10.4

THIS OPTION AND THE UNDERLYING SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER THE LAWS OF ANY
STATE, AND HAVE BEEN TAKEN BY THE ISSUEE FOR HIS OWN ACCOUNT AND NOT WITH A VIEW
OF THEIR DISTRIBUTION. SAID SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS (A)
THEY HAVE BEEN REGISTERED UNDER SAID ACT AND QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS, OR (B) THE TRANSFER AGENT (OR CORPORATION IF THEN ACTING AS ITS
OWN TRANSFER AGENT) IS PRESENTED WITH A WRITTEN OPINION OF COUNSEL SATISFACTORY
TO THE CORPORATION TO THE EFFECT THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE OR TRANSFER.

SALE OR OTHER TRANSFER OF THIS OPTION OR THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS OPTION IS FURTHER RESTRICTED FOR UP TO 12 MONTHS FOLLOWING
THE EFFECTIVE DATE OF A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IN CONNECTION WITH AN INITIAL PUBLIC OFFERING OF SECURITIES
OF THE CORPORATION.

                       REDLINE PERFORMANCE PRODUCTS, INC.
                       NONQUALIFIED STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT (the "AGREEMENT") is made and entered into

effective the 15th day of October, 2002, by and between Redline Performance
Products, Inc., a

Minnesota corporation (the "CORPORATION"), and Mark A. Payne (the "OPTIONEE").

                                    RECITALS

         Pursuant to an employment agreement by and between the Corporation and
the Optionee dated effective as of the 15th day of October, 2002 (the
"EMPLOYMENT AGREEMENT"), the parties have agreed that as a portion of the
compensation described in such Employment Agreement, the Corporation shall grant
to the Optionee an option to purchase shares of the Corporation's One Cent
($0.01) per share par value common stock (such class of capital stock of the
Corporation is referred to herein as "COMMON STOCK") under the terms set forth
herein.

         NOW, THEREFORE, in consideration of the promises and covenants
contained herein, the Corporation and the Optionee hereby agree as follows:

                                    AGREEMENT

1.)      Grant of Option. The Corporation hereby grants to the Optionee,
effective as of the 15th day of October, 2002 (the "GRANT DATE"), an option (the
"OPTION") to purchase an aggregate of

<PAGE>

two hundred forty thousand (240,000) shares of Common Stock upon the terms and
conditions set forth in this Agreement. The shares of Common Stock subject to
the Option are hereinafter referred to as the "OPTION SHARES." The Option is not
intended to qualify as an option qualified under Section 422 of the Internal
Revenue Code of 1986, as amended (the "CODE").

2.)      Option Price. Subject to any adjustments pursuant to the provisions of
this Agreement, the purchase price for the Option Shares shall be Three and
75/100 Dollars ($3.75) per share (the "OPTION PRICE"), which price is not less
than one hundred percent (100%) of the fair market value of a single share of
Common Stock as of the Grant Date.

3.)      Term of Option; Time of Exercise.

         (a)      The term of the Option is for a period commencing on the Grant
         Date and terminating on the close of business on the earlier of: (i)
         October 15, 2007, and (ii) the date one hundred eighty (180) days after
         termination of Optionee's employment with the Corporation (the "OPTION
         PERIOD").

         (b)      Subject to restrictions set forth in this Agreement, the
         Options shall become exercisable as follows:

<TABLE>
<CAPTION>
Vesting Date        No. of Shares        Vesting Date        No. of Shares
------------        -------------        ------------        -------------
<S>                 <C>                  <C>                 <C>
   4/15/03             30,000               4/1/05              15,000

  10/15/03             30,000               7/1/05              15,000

   1/1/04              15,000               10/1/05             15,000

   4/1/04              15,000               1/1/06              15,000

   7/1/04              15,000               4/1/06              15,000

   10/1/04             15,000               7/1/06              15,000

   1/1/05              15,000               10/1/06             15,000
</TABLE>

4.)      Manner of Exercise of Option. This Option may be exercised by the
Optionee, in whole or in part, by delivery to the Corporation of the form of
exercise hereof duly executed, accompanied by payment (whether in cash,
cashier's check, bank draft or another form of consideration acceptable to the
Corporation) in full of the amount of the aggregate Option Price for the number
of Option Shares with respect to which this Option is then being exercised;
provided, however, that this Option must be exercised in multiples of not less
than one hundred (100) Option Shares or the remaining number of Option Shares if
such number is less than one hundred (100). An Option shall be deemed to have
been exercised immediately prior to the close of business on the date the
Corporation is in receipt of written notice of exercise of this Option in the
form attached hereto and payment for the number of Option Shares being acquired
upon exercise of this Warrant. The person entitled to receive the Option Shares
issuable upon such exercise shall be treated for all purposes as the holder of
such Option Shares of record as of the

                                       2.

<PAGE>

close of business on such date. As promptly as practicable on or after such
date, the Corporation shall issue and deliver to the person or persons entitled
to receive such Option Shares a certificate or certificates for the number of
full shares of Common Stock issuable upon such exercise, together with cash in
lieu of any fraction of an Option Share, as provided below.

5.)      No Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise of this Option. In lieu of any fractional
shares which would otherwise be issuable upon exercise of this Option, the
Corporation shall pay cash equal to the product of such fraction multiplied by
the fair market value of one (1) share of Common Stock on the date of exercise
as determined in good faith by the Corporation.

6.)      Adjustment of Option Price and Number of Option Shares. The number and
kind of securities issuable upon the exercise of this Option shall be subject to
adjustment from time to time upon the happening of certain events as follows:

         (a)      Adjustment for Stock Dividends, Splits and Consolidations. In
         case the Corporation shall at any time subdivide the outstanding Common
         Stock into a greater number of shares or declare a dividend payable in
         Common Stock, the Option Price in effect immediately prior to such
         subdivision shall be proportionately reduced, and conversely, in case
         the outstanding Common Stock shall be combined into a smaller number of
         shares, the Option Price in effect immediately prior to such
         combination shall be proportionately increased.

         (b)      Adjustment for Reorganizations or Consolidations. If any
         capital reorganization or reclassification of the capital stock of the
         Corporation, or consolidation or merger of the Corporation with another
         corporation, or the sale of all or substantially all of its assets to
         another corporation shall be effected in such a way that holders of
         Common Stock shall be entitled to receive stock, securities or assets
         ("SUBSTITUTED PROPERTY") with respect to or in exchange for such Common
         Stock, then, as a condition of such reorganization, reclassification,
         consolidation, merger or sale, the Optionee shall have the right to
         purchase and receive upon the basis and upon the terms and conditions
         specified in this Option and in lieu of the Common Stock of the
         Corporation immediately theretofore purchasable and receivable upon the
         exercise of the rights represented hereby, such Substituted Property as
         would have been issued or delivered to the Optionee if the Optionee had
         exercised this Option and had received upon exercise of this Option the
         Option Shares prior to such reorganization, reclassification,
         consolidation, merger or sale, less the amount of the aggregate Option
         Price.

7.)      Change in Control.

         (a)      Change in Control. For purposes of this Section 7, a "CHANGE
         IN CONTROL" of the Corporation means: (i) the sale, lease, exchange or
         other transfer of all or substantially all of the assets of the
         Corporation (in one transaction or in a series of related transactions)
         to a person or entity that is not controlled, directly or indirectly,
         by the Corporation, or (ii) a merger or consolidation to which the
         Corporation is a party if the shareholders of the Corporation
         immediately prior to effective date of such merger or consolidation do
         not have "beneficial ownership" (as defined in Rule 13d-3 under the
         Securities Exchange Act

                                       3.

<PAGE>

         of 1934, as amended (the "EXCHANGE ACT")) immediately following the
         effective date of such merger or consolidation of more than fifty
         percent (50%) of the combined voting power of the surviving
         corporation's outstanding securities ordinarily having the right to
         vote at elections of directors.

         (b)      Acceleration of Vesting. In the event a Change in Control of
         the Corporation occurs, this Option shall become immediately
         exercisable in full.

         (c)      Cash Payment for Options. If a Change in Control of the
         Corporation occurs, the Corporation may, in its sole discretion and
         without the consent of the Optionee, determine that the Optionee will
         receive, with respect to and in lieu of some or all of the Option
         Shares, as of the effective date of any such Change in Control of the
         Corporation, cash in an amount equal to the product of such number of
         Option Shares and the excess of the fair market value of the Common
         Stock (as determined in good faith by the Corporation) either
         immediately prior to the effective date of such Change in Control of
         the Corporation or, if greater, determined on the basis of the amount
         paid as consideration by the other party(ies) to the Change in Control
         transaction, over the Option Price.

         (d)      Limitation on Change in Control Payments. Notwithstanding
         anything in Sections 7(b) or (c) to the contrary, if the Corporation is
         then subject to the provisions of Section 280G of the Code, and if the
         acceleration of the vesting of an Option as provided in Section 7(b) or
         the payment of cash in exchange for all or part of an Option as
         provided in Section 7(c) (which acceleration or payment could be deemed
         a "payment" within the meaning of Section 280G(b)(2) of the Code),
         together with any other payments which such Optionee has the right to
         receive from the Corporation would constitute a "parachute payment" (as
         defined in Section 280G(b)(2) of the Code), then the payments to such
         Optionee pursuant to Sections 7(b) or (c) will be reduced to the
         largest amount as will result in no portion of such payments being
         subject to the excise tax imposed by Section 4999 of the Code;
         provided, however, that if such Optionee is subject to a separate
         agreement with the Corporation which specifically provides that
         payments attributable to one or more forms of employee stock incentives
         or to payments made in lieu of employee stock incentives will not
         reduce any other payments under such agreement, even if it would
         constitute an excess parachute payment, then the limitations of this
         Subsection (d) will, to that extent, not apply.

8.)      No Stockholder Rights. This Option shall not entitle the Optionee to
any of the rights of a stockholder of the Corporation prior to exercise of this
Option.

9.)      No Obligation to Exercise Option. The granting of the Option shall
impose no obligation upon the Optionee to exercise the Option. Nothing in this
Agreement confers upon the Optionee any rights respecting any employment or
limits the Optionee's rights or the Corporation's rights to terminate any such
employment.

10.)     Covenants of the Corporation. The Corporation covenants that during the
period this Option is exercisable, the Corporation will reserve from its
authorized and unissued Common Stock a sufficient number of shares of Common
Stock to provide for the issuance of the Option Shares upon the exercise of this
Option. The Corporation further covenants that all Option

                                       4.

<PAGE>

Shares that may be issued upon the exercise of this Option will, upon payment
and issuance, be duly authorized and issued, fully paid and nonassessable shares
of Common Stock.

11.)     Compliance with Securities Laws and Other Transfer Restrictions. The
Optionee, by acceptance hereof, agrees, represents and warrants that this Option
and the Option Shares which may be issued upon exercise hereof are being
acquired for investment, that the Optionee has no present intention to resell or
otherwise dispose of all or any part of this Option or any Option Shares, and
that the Optionee will not offer, sell or otherwise dispose of all or any part
of this Option or any Option Shares except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended (the "ACT"), or
applicable state securities laws. The Corporation may condition any transfer,
sale, pledge, assignment or other disposition on the receipt from the party to
whom this Option is to be so transferred or to whom Option Shares are to be
issued or so transferred, on any representations and agreements requested by the
Corporation in order to permit such issuance or transfer to be made pursuant to
exemptions from registration under federal and applicable state securities laws.
Upon exercise of this Option, the Optionee shall, if requested by the
Corporation, confirm in writing the Optionee's investment purpose and acceptance
of the restrictions on transfer of the Option Shares.

12.)     Representations. The Optionee acknowledges and represents as follows:

         (a)      The Option and any Option Shares acquired pursuant to exercise
         of the Option are being acquired for the Optionee's own account and for
         investment and not with the view to, or for resale in connection with,
         any distribution or public offering of the Option Shares within the
         meaning of the Act or any applicable state securities laws.

         (b)      The Optionee understands that:

                  (1)      Neither the Option nor the Option Shares to be issued
                           upon exercise of the Option have been registered for
                           offering or sale under the Act or any state
                           securities laws;

                  (2)      The Option and the Option Shares have not been
                           registered under the Act or any state securities laws
                           by reason of their contemplated issuance in
                           transactions exempt from the registration
                           requirements of such laws, and the reliance of the
                           Corporation upon such exemptions is predicated upon
                           the representations, warranties and covenants of the
                           Optionee;

                  (3)      The Option and the Option Shares may not be
                           transferred or resold without registration under the
                           Act and any applicable state securities laws or the
                           existence of an exemption from those registration
                           requirements; and

                  (4)      The Corporation has not agreed to register the Option
                           or the Option Shares for distribution under the
                           provisions of the Act or applicable state securities
                           laws, and has not agreed to comply with any exemption
                           under the Act or applicable state securities laws for
                           the resale of the Option Shares.

                                       5.

<PAGE>

         (c)      By reason of the Optionee's knowledge and experience in
         financial and business matters in general, and investments in
         particular, as well as the Optionee's relationship with the
         Corporation, the Optionee is capable of evaluating the merits and risks
         of an investment in the Option Shares.

         (d)      The Optionee realizes that the acquisition of the Option
         Shares is a long-term investment, and the Optionee must bear the
         economic risk of such investment for an indefinite period of time.

         (e)      Notwithstanding any of the other provisions of this Agreement,
         the Optionee shall not exercise the Option, and the Corporation will
         not be obligated to issue the Option Shares to the Optionee hereunder,
         if the exercise of the Option or the issuance of the Option Shares will
         constitute a violation by the Optionee or the Corporation of any
         provisions of any law or regulation of any governmental authority.

13.)     Restriction on Transfer After a Public Offering. The Optionee
understands that the Corporation at a future date may file a registration or
offering statement (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission to facilitate a public offering of its securities. The
Optionee agrees, for the benefit of the Corporation, that should such an initial
public offering be made and should the managing underwriter of such offering
require, the Optionee will not, without the prior written consent of the
Corporation and such underwriter, during the "Lockup Period" as defined herein:
(a) sell, transfer or otherwise dispose of, or agree to sell, transfer or
otherwise dispose of any of the Shares beneficially owned by the undersigned
during the Lockup Period; (b) sell, transfer or otherwise dispose of, or agree
to sell, transfer or otherwise dispose of any options, rights or warrants to
purchase any Shares beneficially owned by the undersigned during the Lockup
Period; or (c) sell or grant, or agree to sell or grant, options, rights or
warrants with respect to any of the Shares. The foregoing does not prohibit
gifts to donees or transfers by will or the laws of descent to heirs or
beneficiaries provided that such donees, heirs and beneficiaries shall be bound
by the restrictions set forth herein. The term "Lockup Period" shall mean the
lesser of (x) twelve (12) months and (y) the period during which Corporation
officers and directors are restricted by the managing underwriter from effecting
any sales or transfers of the Corporation's Common Stock. The Lockup Period
shall commence on the effective date of the Registration Statement.

14.)     Stop Transfer Order and Restrictive Legend. The Optionee agrees that
the Corporation may place a stop transfer order with its registrar and transfer
agent (if any) covering all of the Option Shares. The Optionee agrees that the
Corporation may place one or more restrictive legends on any certificates
evidencing the Option Shares containing substantially the following language:

                  The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended, have
                  not been registered under any state securities law, and are
                  subject to a subscription and investment representation
                  agreement. They may not be sold, offered for sale, or
                  transferred in the absence of either an effective registration
                  under the Securities Act of 1933, as amended, and under the
                  applicable state securities laws, or an opinion of counsel for
                  the

                                       6.

<PAGE>

                  Company that such transaction is exempt from registration
                  under the Securities Act of 1933, as amended, and under the
                  applicable state securities laws.

                  Sale or other transfer of these securities is further
                  restricted for up to twelve (12) months following an initial
                  public offering of securities of the Company.

15.)     Postponement of Exercise. Notwithstanding anything herein to the
contrary, the Corporation shall have the right to delay any exercise for a
period of up to one hundred eighty (180) days for the purpose of: (a) ensuring
the availability of an exemption under applicable securities laws for the
issuance of the Option Shares to the Optionee in light of the transactions by
the Corporation in its securities; and/or (b) facilitating a distribution of the
Corporation's securities. In either case, if the Corporation elects to delay any
such exercise, the Corporation shall inform the Optionee, in writing, of such
delay and the terms of such delay. Any such delay shall not lead to any change
in the Option Price or the terms of the Option and shall not extend the term of
any Option unless such delay would extend past the expiration date of such
Option. In such case, the expiration date shall be extended to thirty (30) days
after the end of such delay.

16.)     Nontransferability of Option. The Option granted under this Agreement
is not transferable by the Optionee, either voluntarily or involuntarily, except
by will or the laws of descent, and any attempt to otherwise transfer the Option
will render it null and void. The Option is exercisable during the Optionee's
lifetime only by the Optionee or the Optionee's guardian or legal
representative.

17.)     Withholding Taxes. The Optionee acknowledges that under the law in
effect as of the date of this Agreement, the Optionee will generally realize
income for federal and state income tax purposes at the time of the grant and/or
exercise of the Option, and further, that such income may constitute
compensation subject to withholding of income taxes. At the time of any exercise
of the Option, the Optionee will make arrangements with the Corporation to
satisfy any withholding tax obligations resulting from the exercise of the
Option.

18.)     Loss, Theft, Destruction or Mutilation of Option Agreement. Upon
receipt by the Corporation of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Option Agreement, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it, and upon reimbursement to the Corporation of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Option
Agreement, if mutilated, the Corporation will make and deliver a new Option
Agreement of like tenor and dates as of such cancellation, in lieu of this
Option Agreement.

                                       7.

<PAGE>

19.)     No Limitation on Corporate Action. No provisions of this Agreement and
no right or option granted or conferred hereunder shall in any way limit,
affect, or abridge the exercise by the Corporation of any of its corporate
rights or powers to recapitalize, amend its Articles of Incorporation,
reorganize or merge with or into another corporation, or to transfer all or any
part of its property or assets, or the exercise of any other of its corporate
rights and powers.

20.)     Miscellaneous. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Minnesota without
reference to such state's conflict of laws provisions. The headings in this
Agreement are for purposes of convenience and reference only, and shall not be
deemed to constitute a part hereof. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally but only by an
instrument in writing signed by the Corporation and the Optionee. All notices
and other communications from the Corporation to the Optionee shall be sent by
certified mail, return receipt requested, or delivered by overnight delivery
service to the address furnished to the Corporation in writing by the Optionee
who shall have furnished an address to the Corporation in writing.

21.)     Counterparts. This Agreement may be executed in separate and several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.

         IN WITNESS WHEREOF, the Corporation and the Optionee have executed this
Agreement as of the day and year first above written.

CORPORATION:                                 OPTIONEE:
REDLINE PERFORMANCE                          MARK A. PAYNE
PRODUCTS, INC.

By:/s/ Kent H. Harle                         /s/ Mark A. Payne
   -----------------------------------       -----------------------------------
   Print Name: Kent H. Harle
   Its: CEO

                                       8.

<PAGE>

                       REDLINE PERFORMANCE PRODUCTS, INC.

                               NOTICE OF EXERCISE

To:      The Officers and Directors of Redline Performance Products, Inc.

RE:      Exercise of Stock Option

Ladies and Gentlemen:

Pursuant to the terms of that certain Stock Option Agreement dated the _____ day
of _______________, 2002, this letter is to notify you that I hereby exercise my
outstanding stock option to purchase ___________________________ (__________)
shares of common stock (the "Securities") of Redline Performance Products, Inc.
In payment of the exercise price per share, attached is a:

         [ ]       (i)     a check in the amount of $_________________ made
                           payable to Redline Performance Products, Inc.; or
         [ ]      (ii)     another form of consideration acceptable to Redline
                           Performance Products, Inc. (explain):
         _______________________________________________________________________

         _______________________________________________________________________

Dated: __________________ ___, 20__

_______________________________________
Optionee Signature

_______________________________________
Optionee Name (Printed or Typed)

_______________________________________
Street Address

_______________________________________
City, State, Zip Code

_______________________________________
Social Security Number

                                        10.<PAGE>
                                                                    Exhibit 10.5

                              EMPLOYMENT AGREEMENT

       THIS AGREEMENT ("AGREEMENT") is effective as of the 31st day of July,
2000, by and between REDLINE PERFORMANCE PRODUCTS, INC., a Minnesota corporation
having its principal place of business in Vista, California (the "COMPANY"), and
KENT HARLE, a resident of the State of California ("EMPLOYEE").

                                    RECITALS

       WHEREAS, the Company desires to obtain the full-time services of Employee
and Employee desires to be employed by the Company, and each is willing to enter
into this Agreement, on the terms and subject to the conditions contained
herein.

                                    AGREEMENT

       NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:

       1.) Employment of Employee; Term.

       (a) Employment. The Company agrees to and hereby does employ Employee,
       and Employee accepts such employment and agrees to discharge faithfully,
       diligently and to the best of Employee's abilities, the responsibilities
       of such employment on the terms and conditions set forth herein.

       (b) Term. The Company hereby retains Employee for a term of four (4)
       years, (the "TERM") commencing on the date hereof and terminating on the
       fourth anniversary date of the date hereof, unless renewed pursuant to
       the next sentence or terminated pursuant to Section 10 hereof. This
       Agreement will automatically renew for successive one (1) year periods
       (each a "RENEWAL PERIOD") unless one party provides the other with
       written notice of non-renewal at least sixty (60) days, but not more than
       one hundred twenty (120) days prior to the expiration of the Term or any
       Renewal Period.

       2.) Duties of Employee. During the Term and any Renewal Period, Employee
will:

       (a) Full-Time Employment. Devote substantially all of Employee's business
       time and attention necessary to carry out the duties of Employee
       hereunder, applying Employee's best effort and skill for the benefit of
       the Company. Employee will not, without prior written consent of the
       Company, render services of any kind to others, or engage in any other
       business activity that in the Company's sole discretion would materially
       interfere with the performance of Employee's duties under this Agreement.

       (b) Duties. Act as President, Chief Executive Officer, Treasurer and
       Chief Financial Officer for the Company and perform the services and
       assume the duties and responsibilities assigned to Employee from
       time-to-time by the Company's Board of

                                       1
<PAGE>

       Directors. In performance of the services hereunder, Employee will comply
       with such rules, regulations, instructions, and policies, as the Company
       may from time-to-time adopt.

       (c) Report directly to the CEO [or Board of Directors, if applicable] of
       the Company or to another individual designated by the Board of Directors
       on a regular basis and as further requested by such directors or
       designated individual.

       3.) Compensation. Employee's compensation shall be:

       (a) Base Salary. In consideration for Employee's performance of services
       hereunder and Employee's observance of all of the provisions of this
       Agreement, the Company agrees to pay in accordance with its payroll
       practices in effect at the time, and Employee agrees to accept, Ninety
       Thousand Dollars ($90,000) on an annualized basis (the "BASE SALARY").
       Prior to each anniversary date of this Agreement, the Committee, as
       described below, shall consider the Employee's Base Salary for the next
       year of this Agreement, and may, in its sole discretion, increase the
       Base Salary for future years. The "COMMITTEE" shall mean a committee of
       the Company's Board of Directors consisting only of non-employee
       directors.

       (b) Payment of Base Salary. Employee's Base Salary will be paid
       semi-monthly in accordance with the Company's general payroll practices
       for employees. Base Salary payments will be subject to all appropriate
       withholdings for state, federal and local taxes, and such other
       deductions as are otherwise required by law or authorized by Employee.

       (c) Bonuses. Employee will be entitled to such yearly bonuses and
       compensation in addition to Base Salary in any amount, including zero, as
       determined by the Committee in its sole discretion.

       (d) Other Benefits. Employee will be entitled to participate in any
       fringe benefit programs provided by the Company for all of its full-time
       employees, pursuant to the terms of such programs, including, without
       limitation, any medical and hospitalization insurance programs.

       (e) Vacation. Employee will accrue three (3) weeks of paid vacation each
       calendar year during the Term and any Renewal Period. In addition,
       Employee will receive any holidays recognized by the Company as paid days
       off. Unused vacation time in any calendar year will accumulate and be
       carried over into subsequent years; provided, however, that Employee may
       not accrue more than six (6) weeks of paid vacation at any time, and
       efforts to accrue paid vacation time in excess of six (6) weeks shall be
       ineffective.

       (f) Business Expenses. The Company will reimburse Employee for business
       expenses reasonably incurred by Employee in connection with the
       performance of Employee's duties hereunder, upon the presentation by
       Employee of receipts and itemized accounts of such expenditures in
       accordance with the Company's policies and

                                       2
<PAGE>

       the rules and regulations of the Internal Revenue Service. Except for
       expenses previously approved by the Board or its designee, the Board may
       take such action as may be necessary to enforce the repayment to the
       Company by Employee of any amounts reimbursed upon finding that such
       reimbursement was not made primarily for the purpose of advancing the
       legitimate interests of the Company.

       (g) Relocation Allowance. The Company and Employee acknowledge that the
       Company will likely relocate its executive offices and principal
       operations to the State of Minnesota or to another northern-tier state in
       the United States. Employee and the Company agree that Employee will
       relocate as provided herein and that any relocation requested by the
       Company shall not be deemed a termination of this Agreement without Good
       Cause as described in Section 4(b). Upon presentation by Employee of
       receipts of expenses incurred by employee in relocating from California
       to another location, the Company will pay Employee a relocation allowance
       in an amount equal to the amount incurred by Employee in relocation;
       provided, however, such amount will not exceed Five Thousand Dollars
       ($5,000).

       4.) Termination of Agreement. This Agreement may be terminated as
follows:

       (a) Good Cause. Immediately by the Company for "Good Cause" upon notice
       of such termination to Employee. For purposes of this Agreement, "GOOD
       CAUSE" means Employee's: (i) failure or refusal to observe or perform any
       of the material provisions of this Agreement or any other written
       agreement with the Company, or to substantially perform any of the
       material duties required of Employee under this Agreement or any other
       written agreement with the Company; or (ii) commission of fraud,
       misappropriation, embezzlement or other acts of dishonesty, or conviction
       for any crime punishable as a felony or as a gross misdemeanor involving
       moral turpitude, which actions, in the judgment of the Company, have a
       material adverse effect upon Employee's ability to perform the duties
       which are assumed or assigned under Section 2 hereof, or which actions or
       occurrences are materially adverse to the interests of the Company.
       Termination under 4(a)(i) shall be effective upon thirty (30) days prior
       written notice and Employee's failure to remedy the problem within such
       period. Termination under 4(a)(ii) shall be effective immediately upon
       written notice.

       (b) Without Good Cause. By the Company without Good Cause upon not less
       than sixty (60) days' prior written notice from the Company to Employee.

       (c) By Employee. By Employee for any reason upon not less than sixty (60)
       days' prior written notice from Employee to the Company.

       (d) Death/Disability. Automatically upon Employee's death or disability.
       For the purposes of this Agreement, "DISABILITY" means the inability of
       Employee to perform Employee's duties under this Agreement for a total of
       ninety (90) days during any consecutive twelve (12) month period. If a
       question exists concerning the capacity of Employee to perform his
       duties, the Company may require Employee to submit to a medical
       examination by a doctor or medical facility licensed to practice
       medicine. The

                                       3
<PAGE>

       Company and Employee will mutually agree upon the physician and medical
       facility which will conduct the examination and provide treatment.

       5.) Obligations upon Termination. If Employee's employment hereunder is
terminated, the Company will have no further obligation to Employee under this
Agreement, except as set forth in Section 6 below, if applicable. However,
termination of Employee's employment will not terminate or extinguish Employee's
obligations under Sections 7, 8, 9, 10, 11 or 12 or Employee's obligation or
liability to pay to the Company any amounts owed to the Company by Employee,
including, but not limited to, any amounts misappropriated or improperly
obtained by Employee, without prejudice to any other rights or remedies of the
Company at law or in equity. Employee and the Company acknowledge and agree that
no part of any incentive compensation or bonus that is based on the Company's
financial performance for a fiscal year, if any, is payable if Employee's
employment is terminated for any reason prior to expiration of such fiscal year.

       6.) Severance Payments. In the event the Company terminates this
Agreement pursuant to Section 4(b) above, the Company will pay Employee his Base
Salary in effect as of the date of termination, for the remainder of the Term,
or for one (1) year, whichever is shorter. All payments made pursuant to this
Section will be paid semi-monthly in accordance with the Company's general
payroll practices for employees. All payments will also be subject to all
appropriate withholdings for state, federal and local taxes, and such other
deductions as are otherwise required by law or authorized by Employee. The
Company shall not be obligated to make any payments as provided in this Section
if Employee has violated or is not in compliance with Sections 7, 9, 10 or 12 of
this Agreement.

       7.) Confidential Information.

       (a) Definition. For purposes of this Agreement, "CONFIDENTIAL
       INFORMATION" means any information that is not generally known to the
       public that relates to the existing or reasonably foreseeable business of
       the Company which has been expressly or implicitly protected by the
       Company or which, from all of the circumstances, Employee knows or has
       reason to know that the Company intends or expects the secrecy of such
       information to be maintained. Confidential Information includes, but is
       not limited to, information contained in or relating to the development
       plans or proposals, marketing plans or proposals, strategies, financial
       statements, budgets, trade secrets, test data, other data, pricing
       formulas, customer and supplier information, Employee information,
       research and development information, designs, products, processes,
       manufacturing techniques, know-how and other proprietary information of
       the Company, whether written, oral or communicated in another type of
       medium, whether disclosed prior to or after the date of this Agreement,
       whether disclosed directly or indirectly, whether originals or copies and
       whether or not legal protection has been obtained or sought under
       applicable law. Employee will treat all such information as Confidential
       Information regardless of its source and whether or not marked as
       confidential.

       (b) Technology. Employee recognizes that the Company is continually
       engaged in the design, development and utilization of technology related
       to the production of high

                                       4
<PAGE>

       performance vehicles, including, but not limited to snowmobiles
       (hereinafter the "TECHNOLOGY"), and that such Technology is kept in
       strict confidence by the Company. Employee is aware that the Technology
       is vital to the Company's success.

       (c) Protection of Confidential Information. Employee further understands
       that the success of the Company depends, to a great extent, on its
       ability to protect its Confidential Information, including that
       comprising the Technology, from unauthorized disclosure, use or
       publication. Inasmuch as Employee will gain knowledge of or have access
       to the Confidential Information about the Technology, in whole or in
       part, in the course of employment, Employee acknowledges that the Company
       is and will be entrusting Employee with this valuable information.

       (d) Contributions of Employee. Employee understands that the Company is
       engaged in a continuous program of research, development, production and
       marketing of its present and future products, and the enhancement of its
       Technology. Employee further understands that, as an essential part of
       Employee's employment by the Company, Employee is expected to make new
       contributions to the Company.

       (e) No Disclosure. Employee will not, during the Term or any Renewal
       Period thereof, except in conjunction with his duties hereunder, or
       following the termination of Employee's employment with the Company,
       directly or indirectly, use, show, display, release, discuss,
       communicate, divulge or otherwise disclose Confidential Information to
       any person, firm, corporation, association or other entity for any reason
       or purpose whatsoever, without the prior written consent or authorization
       of a duly authorized officer of the Company.

       (f) Title. All documents or other tangible or intangible property
       relating in any way to the business of the Company which are conceived or
       generated by Employee in performing his duties for the Company or come
       into Employee's possession in performing his duties for the Company
       during the Term or any Renewal Period will be and remain the exclusive
       property of the Company. At termination or whenever requested by the
       Company, Employee will return all such documents, and tangible and
       intangible property, and all copies thereof, including, but not limited
       to, all records, manuals, books, blank forms, documents, letters,
       memoranda, notes, notebooks, reports, data, tables, magnetic tapes,
       computer files, disks, calculations or copies thereof, which are the
       property of the Company or which relate in any way to the business,
       customers, products, practices or techniques of the Company, and all
       other property of the Company, including, but not limited to, all
       documents of the Company.

       (g) Compelled Disclosure. In the event a third party seeks to compel
       disclosure of Confidential Information by Employee by judicial or
       administrative process, Employee will promptly notify the Board of
       Directors of the Company of such occurrence and furnish to the Board of
       Directors a copy of the demand, summons, subpoena or other process served
       upon Employee to compel such disclosure, and will permit the Company to
       assume, at its expense, but with Employee's cooperation, defense of such
       disclosure demand. In the event that the Company refuses to contest such
       third party disclosure

                                       5
<PAGE>

       demand under judicial or administrative process, or a final judicial
       order is issued compelling disclosure of Confidential Information by
       Employee, Employee will be entitled to disclose such information in
       compliance with the terms of such administrative or judicial process or
       order without violating his obligations under this Agreement.

       8.) Employee Representations and Warranties. Employee represents and
warrants the following:

       (a) No Breach. Performance of his duties for the Company and his
       obligations under the terms of this Agreement does not and will not cause
       Employee to breach any agreement, commitment or understanding Employee
       has with any other party, whether formal or informal, to assign to such
       other party inventions Employee may hereafter make, or to keep in
       confidence proprietary information of such other party which Employee
       acquired or learned prior to Employee's employment by the Company.

       (b) Former Employment. To Employee's knowledge, Employee has not brought
       and will not bring to the Company, or use for the benefit of the Company,
       any materials and/or documents of a former employer (which, for purposes
       of this Section, will also include persons, firms, corporations and other
       entities for which Employee has acted as an independent contractor or
       consultant) that are not generally available to the public or to the
       trade, unless Employee has obtained written authorization from any such
       former employer permitting Employee to retain and use said materials
       and/or documents. With respect to any materials and/or documents that
       Employee may bring to the Company for use in the course of Employee's
       employment, Employee hereby further represents and warrants that
       Employee's use (or the Company's use) of such materials and/or documents
       will not violate the intellectual property rights of any former employer
       of Employee, or any other party.

       9.) Employer Ownership of Intellectual Property.

       (a) Disclosure of Inventions. Employee hereby agrees to disclose promptly
       to the Company (or any persons designated by it) all developments,
       designs, creations, improvements, original works of authorship, formulas,
       processes, know-how, techniques and/or inventions, hereinafter referred
       to collectively as "INVENTIONS"): (i) which are made or conceived or
       reduced to practice by Employee, either alone or jointly with others, in
       performing his duties during the period of Employee's employment, by the
       Company, or which are reduced to practice during the period of one (1)
       year following the termination of Employee's employment, that relate to,
       at the time of conception or reduction to practice, the business of the
       Company or actual or demonstrably anticipated research or development of
       the Company; or (ii) which result from any work performed by Employee for
       the Company; or (iii) which result from Employee's use of the premises or
       other resources owned, leased or contracted by the Company.

       (b) Property of Company. Employee agrees that all such Inventions which
       the Company in its sole discretion determines to be related to its
       business or its research or development, or which result from work
       performed by Employee for the Company, will

                                       6
<PAGE>

       be the sole and exclusive property of the Company and its assigns, and
       the Company and its assigns will have the right to use and/or to apply
       for patents, copyrights or other statutory or common law protections for
       such Inventions in any and all countries. Employee further agrees to
       assist the Company in every proper way (but at the Company's expense) to
       obtain and from time to time enforce patents, copyrights and other
       statutory or common law protections for such Inventions in any and all
       countries. To that end, Employee will execute all documents for use in
       applying for and obtaining such patents, copyrights and other statutory
       or common law protections therefor and enforcing the same, as the Company
       may desire, together with any assignments thereof to the Company or to
       persons or entities designated by the Company. Employee's obligations
       under this Section will continue beyond the termination of Employee's
       employment with the Company, but the Company will compensate Employee at
       a reasonable rate after such termination for time actually spent by
       Employee at the Company's request in providing such assistance.

       (c) Works for Hire. Employee hereby acknowledges that all original works
       of authorship which are made by Employee (solely or jointly with others)
       within the scope of Employee's employment which are protectable by
       copyright are "works for hire," as that term is defined in the United
       States Copyright Act (17 USCA, Section 101).

       10.) Assignment of Inventions. Any provision in this Agreement requiring
Employee to assign Employee's rights in any Invention to the Company will not
apply to any invention that is exempt under the provisions of Section 181.78 of
the Minnesota Statutes. The statute states that such assignment agreements do
not apply:

              To an invention for which no equipment, supplies, facility or
              trade secret information of the employer was used and which was
              developed entirely on the employee's own time, and (1) which does
              not relate (a) directly to the business of the employer or (b) to
              the employer's actual or demonstrably anticipated research or
              development, or (2) which does not result from any work performed
              by the employee for the employer. (Emphasis added).

       Employee will execute the Invention Assignment Notice attached here to as
Exhibit A and incorporated herein by reference.

       11.) Power of Attorney. In the event the Company is unable, after
reasonable effort, to secure Employee's signature on any document needed to
apply for, obtain or enforce any intellectual property rights relating to any
Invention with respect to which Employee has made an inventive contribution,
whether because of Employee's unavailability, or Employee's physical or mental
incapacity, or for any other reason whatsoever, Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as Employee's agents and attorneys-in-fact to act for and in Employee's behalf
and stead solely for and in connection with the execution and filing of any such
document with the same legal force and effect as if such acts were performed by
Employee.

                                       7
<PAGE>

       12.) Covenants Not to Solicit or Compete. Employee and the Company agree
that the Company would be substantially harmed if Employee competes with the
Company during or after termination of employment with the Company. Therefore,
in consideration of the compensation and the benefits offered to him, Employee
agrees that:

       (a) During Employee's employment with the Company and for a period of one
       (1) year thereafter, Employee will not, either directly or indirectly,
       whether alone or in concert with others, solicit or entice or in any way
       divert any customer or supplier to do business with any business entity
       in competition with the Company.

       (b) During Employee's employment with the Company, and for any period
       thereafter during which Employee receives severance benefits, Employee
       will not, either alone or with others, directly or indirectly, engage in
       any business enterprise in competition with the Company or otherwise plan
       or take any preliminary steps, either alone or in concert with others, to
       set up or engage in any competitive business enterprise.

       (c) During Employee's employment with the Company and for a period of one
       (1) year thereafter, Employee will not, directly or indirectly, alone or
       in concert with others, solicit any of the Company's employees for
       employment or other engagement by any other company which is, by any
       reasonable standard, in competition with the Company.

Employee understands that the above limitations are necessary in order to reduce
the risk that the Company's Confidential Information, including its Technology,
will be disclosed to and used by its competitors to its detriment. Employee
further understands and agrees that the Company's obligation to make any
payments pursuant to Section 6 of this Agreement shall immediately and forever
terminate upon any violation or failure to comply with this Section 12 by
Employee.

       13.) Defense to Enforcement. The existence of any claim or cause of
action by Employee against the Company shall not constitute a defense to the
enforcement of Employee's obligations herein.

       14.) No Restraint on Employment. Nothing contained in this Agreement will
be construed to prevent Employee from engaging in a lawful profession, trade or
business after the termination of Employee's employment with the Company. This
Agreement will be construed only as one which prohibits Employee from engaging
in acts which are unfair to the Company, and which are in violation of the
confidence and trust reposed in Employee by the Company with respect to its
intellectual property, including but not limited to Confidential Information and
Technology.

       15.) Consideration for Sections 7, 8, 9, 10, 11 and 12. Employee
acknowledges and agrees that he has been offered and has voluntarily accepted
the following consideration for his agreement to the terms of Sections 7, 8, 9,
10, 11 and 12 of this Agreement:

       (a) The Company will grant Employee a five -year option to purchase
       50,000 shares of the Company's One Cent ($0.01) per share par value
       common stock pursuant to the Company's 2000 Stock Option Plan ("OPTION
       PLAN"), at an exercise price of One and

                                       8
<PAGE>

       37.5/100 Dollars ($1.375) per share, subject to the standard provisions
       and other terms and conditions for options granted under the Option Plan.
       The options will vest in accordance with the terms of the Option Plan in
       the following increments: 12,500 shares on the first anniversary date of
       the date of grant; 12,500 shares on the second anniversary date of the
       date of grant; 12,500 shares on the third anniversary date of the date of
       grant; and 12,500 shares on the fourth anniversary date of the date of
       grant. Employee acknowledges that the stock options granted Employee
       under the Option Plan will be granted pursuant to exemptions from the
       registration and prospectus requirements of the Securities Act of 1933,
       as amended, and that the shares of common stock of the Company acquired
       by Employee upon the exercise of such stock options may be subject to
       restrictions on the resale thereof and confirms that he has been advised
       of, and is aware of, such resale restrictions.

       (b) The Company will grant Employee One Hundred Thousand (100,000) shares
       ("RESTRICTED SHARES") of the Company's One Cent ($0.01) per share par
       value common stock pursuant to that certain Restricted Stock Agreement of
       even date hereof ("RESTRICTED STOCK AGREEMENT"). The Restricted Shares
       will be subject to the risk of forfeiture which risk will terminate over
       a three (3) year period based upon the Company's achievement of certain
       milestones described in the Restricted Stock Agreement and upon
       Employee's continued employment with the Company. In the event the
       Company fails to meet any of those certain milestones as more fully
       described in the Restricted Stock Agreement, the number of Restricted
       Shares subject to the respective milestones will be forfeited by
       Employee.

       16.) Voting of Shares.

       (a) Employee will vote all shares of the Company's voting capital stock
       which Employee currently owns or which Employee may hereafter acquire in
       such manner as to cause the Company's Board of Directors to be
       constituted as provided in Sections 6(a) and 6(b) of the Agency Agreement
       dated July 31, 2000, between the Company and Dougherty & Company, LLC
       (the "AGENCY AGREEMENT").

       (b) The provisions of this Section 16 shall survive the termination or
       expiration of this Agreement; provided that Section 16 shall terminate
       upon the termination of Sections 6(a) and 6(b) as provided in Section
       6(c) of the Agency Agreement.

       (c) Certificates representing shares of the Company's voting capital
       stock held by Employee shall be affixed with a legend referencing this
       Agreement and the voting restrictions hereof. Until terminated as
       provided in Section 16(b), the voting requirements shall apply to any
       transferee of such shares.

       17.) Pre-existing Proprietary Inventions. Employee has identified on
Exhibit B attached hereto a complete list of all inventions or improvements
which have been made or conceived or first reduced to practice by Employee alone
or jointly with others prior to Employee's employment by the Company and which
Employee desires to exclude from the operation of this Agreement. If there is no
such list on Exhibit B, Employee represents that

                                       9
<PAGE>

Employee has made no such inventions or improvements at the time of signing of
this Agreement.

       18.) Communication with Subsequent Employer. Upon termination of
Employee's employment, Employee hereby authorizes the Company to notify any
other party, including without limitation, Employee's future employers, future
partners and customers of the Company, as to the existence of this Agreement,
and the existence of Employee's covenants and responsibilities with respect to
the confidential and proprietary information entrusted to Employee hereunder.

       19.) Breach of Restrictive Covenants.

       (a) Relief. It is agreed that it would be difficult or impossible to
       ascertain the measure of damages to the Company resulting from any breach
       of Sections 7 or 12, and that injury to the Company from any such breach
       may be irremediable, and that money damages therefor may be an inadequate
       remedy. In the event of a breach or threatened breach by Employee of the
       provisions of any of such Sections, the Employee agrees to the entry by a
       court of competent jurisdiction of a temporary or permanent injunction or
       other equitable remedy enjoining Employee's breach or threatened breach,
       without the necessity of proof of damages, in addition to any other
       rights or remedies that the Company may have available under applicable
       law for such breach or threatened breach, including the recovery of
       damages.

       (b) Binding Effect. The provisions of Sections 7, 8, 9, 10, 11 and 12 of
       this Agreement will continue to be binding upon Employee, notwithstanding
       the termination of employment with the Company for any reason whatsoever.
       Such covenants will be deemed and construed as separate agreements
       independent of any other provisions of this Agreement. The existence of
       any claim or cause of action by Employee against the Company, whether
       predicated on this Agreement or otherwise, will not constitute a defense
       to the enforcement by the Company of any or all such Sections.

       20.) Miscellaneous Provisions. This Agreement includes the following
provisions, which shall survive any expiration or termination of this Agreement:

       (a) Definitions. The term "Company" when used in Sections 7 - 18 of this
       Agreement will mean in addition to the Company, any affiliate of the
       Company. The terms "affiliate" or "affiliates" when used in this
       Agreement will mean any person that controls the Company, or is
       controlled by the Company, or is under common control with the Company.

       (b) Entire Agreement; Modification. This Agreement constitutes the full
       and complete understanding and agreement of the parties with respect to
       the terms contained herein, and supersedes any prior understanding or
       agreement between the parties relating to these terms. No amendment,
       waiver or modification of any provision of this Agreement will be binding
       unless made in writing and signed by the parties hereto.

                                       10
<PAGE>

       (c) Assignment. The rights and benefits of the Company and its permitted
       assigns under this Agreement will be fully assignable and transferable.
       This Agreement is a personal service contract and will not be assignable
       by Employee, but all obligations and agreements of Employee hereunder
       will be binding upon and enforceable against Employee and Employee's
       personal representatives, heirs, legatees and devisees.

       (d) Notices. To be effective, all notices, consents or other
       communications required or permitted hereunder will be in writing. A
       written notice or other communication will be deemed to have been given
       hereunder: (i) if delivered by hand, when the notifying party delivers
       such notice or other communication to the other party to this Agreement;
       (ii) if delivered by facsimile or overnight delivery service, on the
       first business day following the date such notice or other communication
       is transmitted by facsimile or timely delivered to the overnight courier;
       or (iii) if delivered by mail, on the third business day following the
       date such notice or other communication is deposited in the U.S. mail by
       certified or registered mail addressed to the other party. Mailed or
       telecopied communications will be directed as follows unless written
       notice of a change of address or facsimile number has been given in
       writing in accordance with this Section:

              If to Company:    Redline Performance Products, Inc.
                                2520 Fortune Way
                                Vista, CA  92083
                                ATTN:  President
                                Facsimile No. (760) 598-0167

              With a copy to:   Larkin, Hoffman, Daly & Lindgren, Ltd.
                                1500 Wells Fargo Plaza
                                7900 Xerxes Avenue South
                                Minneapolis, MN 55431
                                ATTN:  Douglas M. Ramler, Esq.
                                Facsimile No. (952) 896-3333

              If to Employee:   Kent Harle
                                7787 Ludington Place
                                LaJolla, California 92037

       (e) Waiver. No waiver of any term, condition or covenant of this
       Agreement by a party will be deemed to be a waiver of any subsequent
       breaches of the same or other terms, covenants or conditions hereof by
       such party.

       (f) Counterparts. This Agreement may be executed in counterparts, each of
       which will be deemed to be an original, and all such counterparts will
       constitute one instrument.

       (g) Limitation; Severability of Provisions. To the extent any court of
       competent jurisdiction determines that any covenant contained in this
       Agreement is unreasonable or unenforceable in any respect, the court may
       limit such covenant to render it reasonable in

                                       11
<PAGE>

       light of the circumstances in which it was made, and such covenant, as so
       limited, will be specifically enforced. In the event the court refuses to
       limit such covenant or provision and the covenant or provision is found
       to be invalid or unenforceable, the same will not affect in any respect
       whatsoever the validity of the remainder of this Agreement.

       (h) Governing Law; Venue. This Agreement, all exhibits hereto, and all
       acts and transactions pursuant or relating hereto, and all rights and
       obligations of the parties hereto will be governed, construed, and
       interpreted in accordance with the domestic laws of the State of
       Minnesota without giving effect to any choice of law provision or rule
       (whether of the State of Minnesota or any other jurisdiction that would
       cause application of the laws of any jurisdiction other than the State of
       Minnesota). In order to induce the parties to accept this Agreement, and
       as a material part of the consideration therefor: (i) the parties hereto
       agree that all actions or proceedings arising out of this Agreement will
       be litigated in courts located within Hennepin County, Minnesota; (ii)
       the parties irrevocably and unconditionally consent to the exclusive
       jurisdiction of such courts and consent to the service of process in any
       such action or proceeding by personal delivery or any other method
       permitted by law; (iii) the parties agree that venue is proper in
       Hennepin County, Minnesota, for those matters not subject to arbitration;
       (iv) the parties waive any and all rights they may have to transfer or
       change the venue of any such action or proceeding; and (v) the parties
       agree that service of any process, summons, notice or document by U.S.
       Registered Mail to such party's respective address set forth above shall
       be effective service of process for any such action or proceeding with
       respect to any matters and to which such party has submitted to
       jurisdiction as set forth in this Section.

       (i) Arbitration. Except in the event of a breach or threatened breach by
       Employee of Sections 7 or 12, any controversy or claim arising out of or
       relating to this Agreement or the breach, termination, or invalidity
       thereof between the parties will be referred to the American Arbitration
       Association (the "ASSOCIATION"), Minneapolis, Minnesota, and any such
       proceeding will be conducted in the Minneapolis, Minnesota metropolitan
       area. Any such arbitration will be before a panel of three arbitrators
       and will be conducted in accordance with the rules of the Association,
       except that the Federal Rules of Civil Procedure and the Federal Rules of
       Evidence will apply at any hearing. No arbitrator will have any
       connection to the parties to this Agreement. The arbitrators will have
       the right to award or include in their award any relief they deem proper,
       including without limitation, money damages, interest, specific
       performance, attorneys' fees, costs and expenses incurred, but not
       exemplary or punitive damages. The award decision of the arbitrators will
       be conclusive and binding upon all parties and may be entered in any
       court of competent jurisdiction. The parties agree to bring all claims in
       this arbitration which relate to the original claim.

       (j) Representation by Counsel; Interpretation. The Company and Employee
       each acknowledge that each party to this Agreement has been, or has had
       the opportunity to be, represented by counsel in connection with this
       Agreement and the matters contemplated by this Agreement. Accordingly,
       any rule of law or any legal decision that would require interpretation
       of any claimed ambiguities in this Agreement against the party that
       drafted

                                       12
<PAGE>

       it has no application and is expressly waived. The provisions of this
       Agreement will be interpreted in a reasonable manner to effect the intent
       of the parties.

       IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                        EMPLOYEE

                                        /s/ Kent Harle
                                        ----------------------------------------

                                        COMPANY

                                        REDLINE PERFORMANCE PRODUCTS, INC.

                                        By:  /s/ Chris Rodewald
                                             -----------------------------------
                                        Its:  Vice President
                                              ----------------------------------

                                       13
<PAGE>

                       REDLINE PERFORMANCE PRODUCTS, INC.

                              EMPLOYMENT AGREEMENT

                                    Exhibit A

                           INVENTION ASSIGNMENT NOTICE

Mr. _____________:

       You are notified that the employment agreement between you and Redline
Performance Products, Inc., effective July 31, 2000, 2000, does not apply to any
invention that qualifies fully under the provisions of Minnesota Statutes
Section 181.78.

                                        REDLINE PERFORMANCE PRODUCTS, INC.

                                        By:  /s/ Chris Rodewald
                                             -----------------------------------
                                        Its:  Vice President
                                              ----------------------------------

I acknowledge receiving a copy of this notice

Date: July 31, 2000

                                        /s/ Kent Harle
                                        ----------------------------------------

                                       14
<PAGE>

                       REDLINE PERFORMANCE PRODUCTS, INC.

                              EMPLOYMENT AGREEMENT

                                    Exhibit B

                       PRE-EXISTING PROPRIETARY INVENTIONS

<TABLE>
<CAPTION>
Name/ Title of Proprietary Invention*                Description of Proprietary Invention
-------------------------------------                ------------------------------------
<S>                                                  <C>

</TABLE>

* Note: If no Proprietary Inventions are listed above Employee agrees that none
exist.

                                       15

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