Document:

EXECUTION COPY

                             STOCK OPTION AGREEMENT

       STOCK OPTION AGREEMENT,  dated April 13, 2000 (this "Agreement"),  by and
among PlayCore Holdings,  Inc., a Delaware corporation  ("Parent"),  and Jasdrew
Acquisition  Corp.,  a Delaware  corporation  and a  wholly-owned  subsidiary of
Parent ("Acquisition  Company"), and PlayCore, Inc., a Delaware corporation (the
"Company").

                              W I T N E S S E T H:

       WHEREAS,  concurrently with the execution and delivery of this Agreement,
Parent,  Acquisition  Company and the Company are entering into an Agreement and
Plan of Merger (as such  agreement  may  hereafter be amended from time to time,
the "Merger Agreement"; capitalized terms used but not defined in this Agreement
shall  have  the  meanings  ascribed  to them in the  Merger  Agreement),  which
provides,  upon the terms and  subject to the  conditions  thereof,  for (i) the
commencement  by Parent,  Acquisition  Company and the Company of a joint tender
offer (the "Offer") to purchase all of the issued and outstanding  shares of the
common stock,  par value $.01, of the Company ("Common Stock") at the applicable
Offer  Price and (ii) the  subsequent  merger of  Acquisition  Company  into the
Company (the "Merger"); and

       WHEREAS,  as a condition to the  willingness of  Acquisition  Company and
Parent to enter into the Merger Agreement,  Parent and Acquisition  Company have
required that the Company agree,  and in order to induce Parent and  Acquisition
Company to enter into the Merger  Agreement  the Company  has  agreed,  to grant
Acquisition Company an option to purchase shares of Common Stock, upon the terms
and subject to the conditions of this Agreement.

       NOW,  THEREFORE,  in  consideration  of the foregoing and the  respective
representations,   warranties,  covenants  and  agreements  set  forth  in  this
Agreement and in the Merger Agreement, the parties hereto agree as follows:

                                   ARTICLE I

                             THE TOP-UP STOCK OPTION

       SECTION  1.1.  Grant of Top-Up  Stock  Option.  Subject  to the terms and
conditions set forth herein, the Company hereby grants to Acquisition Company an
option (the "Top-Up  Stock  Option") to purchase that number of shares of Common
Stock (the "Top-Up Option Shares") equal to the number of shares of Common Stock
that,  when  added to the number of shares of Common  Stock  owned by Parent and
Acquisition  Company  at the time of  exercise  shall  permit  the  Merger to be
accomplished  pursuant to Section 253 of the Delaware  General  Corporation  Law
assuming the issuance of the Top-Up Option  Shares (the "Short Form  Condition")
at a purchase price per Top-Up Option Share equal to the Offer Price;

<PAGE>

provided,  however, that the Top-Up Stock Option shall not be exercisable if the
number  of  shares  of  Common  Stock  subject  thereto  exceeds  the  number of
authorized shares of Common Stock available for issuance.

       SECTION 1.2. Exercise of Top-Up Stock Option.

       (a) Subject to the conditions set forth in Section 2.1 and any additional
requirements  of Law, the Top-Up  Stock  Option may be exercised by  Acquisition
Company,  in whole but not in part,  at any one time after the  occurrence  of a
Top-Up  Exercise  Event (as defined  below) and prior to the Top-Up  Termination
Date (as defined below).

       (b) A "Top-Up  Exercise Event" shall occur for purposes of this Agreement
on the day of the Offer Closing,  provided that Acquisition Company has accepted
for payment  pursuant to the Offer shares of Common Stock satisfying the Minimum
Condition.

       (c) The  "Top-Up  Termination  Date"  shall  occur for  purposes  of this
Agreement upon the earliest to occur of: (i) the Effective  Time;  (ii) the date
which is five (5) business days after the  occurrence of Top-Up  Exercise  Event
(or such later date on which the closing of a purchase  may be  consummated,  as
set forth in  Section  3(d)  below);  and (iii) the  termination  of the  Merger
Agreement.

       (d) In the event Acquisition  Company wishes to exercise the Top-Up Stock
Option,  Acquisition  Company  shall  send to the  Company a  written  notice (a
"Top-Up Exercise Notice",  the date of which notice is referred to herein as the
"Top-Up  Notice  Date")  specifying  the  number of Top-Up  Option  Shares to be
acquired and the aggregate purchase price therefor, the place for the closing of
the purchase and sale pursuant to the Top-Up Stock Option (the "Top-Up Closing")
and a date not earlier  than the Top-Up  Notice Date and not later than ten (10)
business  days from the Top-Up  Notice Date for the Top-Up  Closing (the "Top-Up
Closing  Date");  provided,  however,  that (i) if the Top-Up  Closing cannot be
consummated by reason of any applicable Laws or Orders,  the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which such  restriction on consummation  has expired or been terminated and (ii)
without  limiting the  foregoing,  if prior  notification  to or approval of any
Governmental  Entity is required in connection  with such purchase,  Acquisition
Company and the Company shall  promptly file the required  notice or application
for approval and shall  cooperate  in the  expeditious  filing of such notice or
application,  and the period of time that  otherwise  would run pursuant to this
sentence  shall run instead from the date on which,  as the case may be, (A) any
required  notification period has expired or been terminated or (B) any required
approval has been obtained,  and in either event,  any requisite  waiting period
has expired or been terminated.

       (e) In the event that the  exercise of the Top-Up  Option would result in
the Short  Form  Condition  being  satisfied,  then  Acquisition  Company  shall
exercise  the  Top-Up  Option to buy a  sufficient  number of shares to meet the
Short Form  Condition  unless such exercise would be prevented by Section 2.1(b)
hereof.

                                      -2-
<PAGE>

                                   ARTICLE II

                                     CLOSING

       SECTION 2.1.

       (a)  Conditions  to  Closing.  The  obligation  of the Company to deliver
Top-Up  Option Shares upon the exercise of the Top-Up Stock Option is subject to
the following conditions:

              (i) All waiting  periods,  if any, under the HSR Act applicable to
       the issuance of the Top-Up Option Shares  hereunder shall have expired or
       have been terminated; and

              (ii) There shall be no  preliminary  or  permanent  injunction  or
       other final, non-appealable judgment by a court of competent jurisdiction
       preventing or prohibiting  the exercise of the Top-Up Stock Option or the
       delivery of the Top-Up Option Shares in respect of such exercise.

       (b) Limitation.  Notwithstanding  the foregoing,  the Top-Up Stock Option
may only be  exercised  to the  extent  that such  exercise  would  not  violate
applicable rules of The American Stock Exchange then applicable to the Company.

       SECTION 2.2. Closing.

       (a) At the Top-Up  Closing,  (i) the Company shall deliver to Acquisition
Company a certificate or certificates evidencing the applicable number of Top-Up
Option Shares (in the  denominations  specified in the Top-Up Exercise  Notice),
and (ii)  Acquisition  Company shall  purchase each Top-Up Option Share from the
Company at the Top-Up Price.  Payment by Acquisition Company of the Top-Up Price
for the Top-Up  Option  Shares  shall be made by wire  transfer  of  immediately
available  funds to an account  designated  by the  Company  (provided  that the
failure or refusal of the Company to  designate  such a bank  account  shall not
preclude Acquisition Company from exercising the Top-Up Option).

       (b) The Company  shall pay all expenses,  and any and all Federal,  state
and local taxes and other  charges,  that may be payable in connection  with the
preparation, issuance and delivery of stock certificates under this Section 2.2.

       (c) Certificates  evidencing Top-Up Option Shares delivered hereunder may
include  legends  legally  required,  including  a legend in  substantially  the
following form:

       THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
       REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  AND MAY BE
       REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
       REGISTRATION IS AVAILABLE.

                                      -3-
<PAGE>

It is  understood  and  agreed  that the  foregoing  legend  shall be removed by
delivery of substitute  certificate(s)  without such legend upon the sale of the
Top-Up Option Shares pursuant to a registered  public offering or Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act"), or any other sale
as a result of which such legend is no longer required.

       (d) Upon the giving by  Acquisition  Company to the Company of the Top-Up
Exercise  Notice and the tender of the applicable  purchase  price,  Acquisition
Company shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such  exercise,  notwithstanding  that the stock transfer books of
the Company shall then be closed or that  certificates  representing such shares
of Common Stock shall not then be actually delivered to Acquisition Company.

                                  ARTICLE III

                           REPRESENTATIONS, WARRANTIES
                          AND COVENANTS OF THE COMPANY

       The Company  hereby  represents  and  warrants to Parent and  Acquisition
Company  (except  as  otherwise  disclosed  in  writing  on the date  hereof) as
follows:

       SECTION 3.1.  Organization;  Authority  Relative to this  Agreement.  The
Company is a corporation  duly organized,  validly existing and in good standing
under the laws of the State of Delaware. The Company has all requisite corporate
power and  authority  to execute  and  deliver  this  Agreement,  to perform its
obligations  hereunder and to consummate the transactions  contemplated  hereby.
The execution and delivery of this Agreement by the Company and the consummation
by the  Company  of the  transactions  contemplated  hereby  have  been duly and
validly  executed and delivered by the Company and this Agreement  constitutes a
valid and binding obligation of the Company  enforceable  against the Company in
accordance  with its  terms,  except as such  enforceability  may be  limited by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws affecting creditors' rights generally, and by general equitable principles.

       SECTION  3.2.  Authority  to Issue  Shares.  The  Company  has  taken all
necessary  corporate action to authorize and reserve and permit it to issue, and
at all times from the date hereof through the Top-Up Termination Date shall have
reserved, all the Top-Up Option Shares issuable pursuant to this Agreement.  All
of the shares of Common Stock issuable under the Top-Up Stock Option, upon their
issuance and delivery in accordance  with the terms of this  Agreement,  will be
duly authorized, validly issued, fully paid and nonassessable, will be delivered
free and clear of all  security  interests,  liens,  claims,  pledges,  options,
rights of first refusal, agreements, limitations on Acquisition Company's voting
rights, charges,  adverse rights and other encumbrances of any nature whatsoever
(other than this Agreement) and will not be subject to any preemptive rights.

                                      -4-
<PAGE>

       SECTION 3.3. No Conflict; Required Filings and Consents.

       (a) The execution and delivery of this Agreement by the Company does not,
and  the  performance  by the  Company  of its  obligations  hereunder  and  the
consummation of the transactions contemplated hereby will not, (i) conflict with
or violate the  certificate  of  incorporation  or bylaws of the  Company,  (ii)
assuming  that all  Consents and filings  described in Section  3.3(b) have been
obtained or made,  conflict with or violate any Law applicable to the Company or
by which any  property  or asset of the  Company is bound or  affected  or (iii)
result  in  any  violation  pursuant  to  any  material  note,  bond,  mortgage,
indenture,  contract,  agreement,  lease, license, permit or other instrument or
obligation  to which  the  Company  is a party or by which  the  Company  or its
properties may be bound or affected.

       (b) No Consent of, or filing with, any Governmental Entity is required by
the Company in connection with the execution and delivery of this Agreement, the
performance by the Company of its obligations  hereunder or the  consummation by
the Company of the transactions  contemplated hereby,  except for (i) compliance
with  the HSR Act and  (ii)  Consents  or  filings  the  failure  of which to be
obtained  or made  would  not,  individually  or in the  aggregate,  prevent  or
materially delay the consummation of the transactions contemplated hereby or the
performance by the Company of any of its obligations hereunder.

       SECTION  3.4.  Covenants  of  the  Company.  In  addition  to  its  other
agreements and covenants herein, the Company agrees:

       (a) that it will not,  by charter  amendment  or through  reorganization,
consolidation,  merger, dissolution or sale of assets, or by any other voluntary
act,  avoid  or  seek to  avoid  the  observance  or  performance  of any of the
covenants,  stipulations or conditions to be observed or performed  hereunder by
the Company; and

       (b)  promptly  to take all  action as may from  time to time be  required
(including  complying with all  applicable  notification,  filing  reporting and
waiting period  requirements under HSR or otherwise,  and cooperating fully with
Acquisition  Company in preparing any applications or notices and providing such
information  to any  regulatory  authority as it may require) in order to permit
Acquisition  Company to  exercise  the Top-Up  Option and the  Company  duly and
effectively to issue shares of Common Stock pursuant hereto.

                                   ARTICLE IV

        REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION COMPANY

       Parent  and  Acquisition  Company  hereby  represent  and  warrant to the
Company as follows:

       SECTION 4.1. Organization;  Authority Relative to this Agreement. Each of
Acquisition Company and Parent is a corporation duly organized, validly existing
and in good

                                      -5-
<PAGE>

standing  under  the  laws of the  jurisdiction  of its  incorporation.  Each of
Acquisition  Company and Parent has all requisite  corporate power and authority
to execute and deliver this Agreement,  to perform its obligations hereunder and
to consummate the transactions  contemplated  hereby. The execution and delivery
of this  Agreement by  Acquisition  Company and Parent and the  consummation  by
Acquisition Company and Parent of the transactions contemplated hereby have been
duly and validly  authorized  by all necessary  corporate  action on the part of
Acquisition  Company  and  Parent.  This  Agreement  has been  duly and  validly
executed and delivered by Acquisition Company and Parent and constitutes a valid
and binding obligation of Acquisition  Company and Parent,  enforceable  against
each of Acquisition  Company and Parent in accordance with its terms,  except as
such  enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting  creditors'  rights
generally, and by general equitable principles.

       SECTION 4.2. No Conflict; Required Filings and Consents.

       (a) The execution and delivery of this Agreement by  Acquisition  Company
and Parent do not,  and the  performance  by  Acquisition  Company and Parent of
their   obligations   hereunder  and  the   consummation  of  the   transactions
contemplated  hereby will not, (i) conflict with or violate the  certificate  of
incorporation or bylaws of Acquisition Company or Parent, (ii) assuming that all
Consents  and filings  described in Section  4.2(b) have been  obtained or made,
materially conflict with or materially violate any Law applicable to Acquisition
Company or Parent or by which any  property or asset of  Acquisition  Company or
Parent is bound or affected or (iii)  result in any  violation  pursuant to, any
material note, bond, mortgage,  indenture,  contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Acquisition Company
or Parent is a party or by which  Acquisition  Company or Parent or any of their
respective properties may be bound or affected.

       (b) No Consent of, or filing with, any Governmental Equity is required by
Acquisition  Company or Parent in connection  with the execution and delivery of
this Agreement,  the performance by Acquisition  Company or Parent of any of its
obligations  hereunder or the  consummation by Acquisition  Company or Parent of
the transactions contemplated hereby, except for (i) compliance with the HSR Act
and (ii)  Consents  or filings the failure of which to be obtained or made would
not,  individually  or  in  the  aggregate,  prevent  or  materially  delay  the
consummation  of the  transactions  contemplated  hereby or the  performance  by
Acquisition Company or Parent of any of their respective obligations hereunder.

                                   ARTICLE V

                        COVENANTS OF ACQUISITION COMPANY

       SECTION 5.1.  Distribution.  Acquisition Company shall acquire the Top-Up
Option  Shares  for  investment  purposes  only  (and  only for the  purpose  of
effecting a merger of Acquisition  Company with the Company  pursuant to Section
253 of the Delaware General

                                      -6-
<PAGE>

Corporation  Law)  and not with a view to any sale or  distribution  thereof  in
violation of the Securities Act.

                                   ARTICLE VI

                                  MISCELLANEOUS

       SECTION 6.1.  Amendment.  This  Agreement may not be amended except by an
instrument in writing signed by the parties hereto.

       SECTION  6.2.  Waiver.  Any party  hereto  may (a) extend the time for or
waive  compliance  with the  performance  of any  obligation or other act of any
other  party  hereto or (b)  waive any  inaccuracy  in the  representations  and
warranties  contained herein or in any document  delivered  pursuant hereto. Any
such  extension or waiver shall be valid only if set forth in an  instrument  in
writing signed by the party or parties to be bound  thereby.  The failure of any
party to this  Agreement  to assert any of its rights  under this  Agreement  or
otherwise shall not constitute a waiver of those rights.

       SECTION 6.3. Fees and Expenses. Except as otherwise provided herein or in
Section 8.3 of the Merger  Agreement,  all costs,  fees and expenses incurred in
connection  with  this  Agreement  shall  be paid by the  party  incurring  such
expenses.

       SECTION 6.4. Notices. All notices,  requests,  claims,  demands and other
communications  hereunder  shall be in  writing  and  shall be  deemed  given if
delivered  personally  or sent by telecopy or by  overnight  courier  (providing
proof of delivery) to the respective  parties at their addresses as specified in
Section 9.4 of the Merger Agreement.

       SECTION  6.5.  Severability.  If any  term  or  other  provision  of this
Agreement is invalid,  illegal or incapable of being enforced by any rule of Law
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially  adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall  negotiate  in good  faith to modify  this  Agreement  so as to effect the
original  intent of the parties as closely as possible in a mutually  acceptable
manner to the  fullest  extent  permitted  by  applicable  Law in order that the
transactions  contemplated hereby may be consummated as originally  contemplated
to the fullest extent possible.

       SECTION 6.6. Assignment,  Binding Effect; Benefit. Neither this Agreement
nor any of the rights,  interests or obligations hereunder shall be assigned, in
whole or in part, by operation of law or otherwise, by any of the parties hereto
without the prior written consent of the other parties,  except that Acquisition
Company may assign, in its discretion,  any or all of its rights,  interests and
obligations  hereunder  to  Parent  or any  direct  or  indirect  subsidiary  of
Acquisition Company, but no such assignment shall relieve Acquisition Company of
any of its  obligations  hereunder.  Subject  to the  preceding  sentence,  this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the  parties  hereto and their  respective

                                      -7-
<PAGE>

successors and permitted  assigns.  Notwithstanding  anything  contained in this
Agreement to the contrary,  nothing in this  Agreement,  express or implied,  is
intended  to  confer  on any  person  other  than the  parties  hereto  or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

       SECTION  6.7.  Governing  Law.  This  Agreement  shall be governed by and
construed in accordance  with the laws of the State of Delaware,  without giving
effect to the principles of conflicts of laws thereof.

       SECTION 6.8. ENFORCEMENT. THE PARTIES AGREE THAT IRREPARABLE DAMAGE WOULD
OCCUR  IN THE  EVENT  THAT  ANY OF THE  PROVISIONS  OF THIS  AGREEMENT  WERE NOT
PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT
IS  ACCORDINGLY  AGREED THAT THE PARTIES  SHALL BE ENTITLED TO AN  INJUNCTION OR
INJUNCTIONS TO PREVENT  BREACHES OF THIS  AGREEMENT AND TO ENFORCE  SPECIFICALLY
THE TERMS AND  PROVISIONS OF THIS AGREEMENT IN ANY COURT OF THE UNITED STATES OR
ANY STATE  HAVING  JURISDICTION,  THIS BEING IN ADDITION TO ANY OTHER  REMEDY TO
WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY.

       SECTION  6.9.  Headings.  The  descriptive  headings  contained  in  this
Agreement are included for  reference  purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.

       SECTION 6.10. Counterparts.  This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts,  all of which
shall be considered one and the same  agreement and shall become  effective when
one or more  counterparts  have been signed by each of the parties and delivered
to the other  parties,  it being  understood  that all parties need not sign the
same counterpart.

       SECTION 6.11.  Entire  Agreement.  This Agreement  constitutes the entire
agreement, and supersedes all prior agreements and understandings,  both written
and  oral,  among  the  parties  with  respect  to the  subject  matter  of this
Agreement.

                                      -8-
<PAGE>

       IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be
executed by their respective  officers thereunto duly authorized,  all as of the
date first written above.

                                     PLAYCORE HOLDINGS, INC.

                                     By: /s/
                                     Name:
                                     Title:

                                     Jasdrew Acquisition Company

                                     By: /s/
                                     Name:
                                     Title:

                                     PLAYCORE, INC.

                                     By: /s/
                                     Name:
                                     Title:Exhibit 10.32

LEASE AGREEMENT                    Lease No. 3184

For and in consideration of the mutual covenants and promises hereinafter set
forth, the individual, company or other legal person identified on the signature
page of this Lease as the lessor ("Lessor") and the individual, company or other
legal person identified on the signature page of this Lease as the lessee
("Lessee") hereby agree as follows:

    LEASE. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
all machinery, equipment, motor vehicles and other property described in any
schedule or schedules executed by the parties, concurrently herewith or
hereafter, which schedules state they are subject to this Lease (collectively,
the "Schedules"). All machinery, equipment, motor vehicles and other property
described in any Schedule and all replacement parts, additions, repairs and
accessories incorporated in, or attached or affixed to, any such property is
collectively referred to in this Lease as the "Equipment."

2. TERM OF LEASE. This lease shall commence on the date it is executed and,
unless sooner terminated by Lessor as provided in Section 19, shall continue
until the total number of "Payments" shown on each Schedule shall have been made
and all amounts Lessee is required to pay under Section 15 (if any) have been
paid.

3. RENT. As rent for the Equipment described on each Schedule, Lessee agrees to
pay to Lessor the sum of (x) the rent payments shown under "Rent Payment" on
that Schedule, multiplied by the total number of "Payments" shown on that
Schedule, plus (y) any additional rent specified on that Schedule, plus (z)
"Interim Rent" amounts payable with respect to the period between the
Commencement Date and the first Rent Payment Due Date, based on a 30-day month
and the number of days between the Commencement Date and the first Rent Payment
Due Date. Payments are to be made on each and every Rent Payment Due Date shown
on the Schedule until the total number of payments have been made. The first
rent payment with respect to each Schedule is due upon (i) Lessee's execution of
a delivery receipt, if the Equipment described in that Schedule is motor
vehicles, or (ii) upon Lessee's acceptance (as described in Section 9) of any
Equipment other than motor vehicles described in that Schedule. Rent shall be
paid on the dates specified in the Schedule at the office of Lessor or to such
other person or at such other place as Lessor may from time to time designate in
writing. In addition to the rent payments described above, Lessee shall pay the
amount of any personal property taxes or other taxes and all maintenance,
insurance and other costs and expenses with respect to the Equipment (including
amounts, if any, required to be paid under Sections 14 and 16 of this Lease). If
Lessee fails to make any such payment or pay any other expense required to be
paid by Lessee pursuant to this Lease, Lessor, at its option, may pay such
expense, which shall constitute additional rent and be due and payable from
Lessee to Lessor upon demand thereof.

4. LATE CHARGE. The Payments described in Section 3 shall be paid when due to
the person entitled to those payments. In the event Lessee's rental payments or
any sum required to be paid to Lessor shall become past due, Lessee agrees to
pay to Lessor, not later than one month thereafter, an amount equal to 5 % of
the scheduled lease payment or twenty dollars ($20.00), whichever is greater,
but only to the extent allowed by law.

5. ESTIMATED COST. The rent payments specified in each Schedule have been
computed on the basis of the total cost of the Equipment to Lessor, as estimated
at the time that Schedule is executed. Total cost includes the cost to Lessor of
purchasing and delivering the Equipment to Lessee, transportation, installation,
and all other charges with respect to the Equipment. Lessee hereby authorizes
Lessor to correct the rent payments to reflect any difference between the actual
cost of the Equipment and the estimated cost.

6. SECURITY DEPOSIT. Lessee has deposited or will deposit with Lessor the sum
shown as "Security Deposit", if any, on each Schedule as a security deposit and
not as advance rent. Lessor may, at its option, apply any security deposit to
cure any default by Lessee under the Lease, in which event Lessee shall promptly
pay a sufficient amount to Lessor to restore the security deposit to the full
amount specified on the Schedule. Upon termination of this Lease, Lessor shall
return any remaining balance of the security deposit, if any, to Lessee if, and
only if, Lessee has fulfilled all of its obligations under the Lease.

7. SELECTION OF EQUIPMENT AND SUPPLIER. Lessee has selected the Equipment and
the supplier of the Equipment. Lessor agrees to order the Equipment from the
supplier in accordance with Lessor's customary practices, and Lessor shall not
be obligated to lease the Equipment to Lessee unless the supplier fills the
order. Lessor will have no liability because of any delay by the supplier in
filling the order. Lessee will accept the Equipment if delivered in good repair
and authorizes Lessor to add to the Schedules any serial numbers or other
identification of the Equipment when known. Any delay, in the delivery of the
Equipment will not affect the validity of this Lease.

8. WARRANTIES. LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE
CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF, THE ABSENCE
OR ANY CLAIM OF INFRINGEMENT OR THE LIKE WITH RESPECT TO, OR ANY OTHER MATTER
CONCERNING, THE EQUIPMENT AND EXPRESSLY DISCLAIMS ANY SUCH WARRANTIES OR ANY
OTHER WARRANTIES IMPLIED BY LAW. LESSEE HEREBY WAIVES ANY CLAIM IT MIGHT HAVE
AGAINST LESSOR FOR ANY LOSS, DAMAGE OR EXPENSE CAUSED BY THE EQUIPMENT OR BY ANY
DEFECT THEREIN, OR BY THE USE OR MAINTENANCE OF, OR SERVICING OR ADJUSTMENT TO,
THE EQUIPMENT AND, AS TO LESSOR, LEASES THE EQUIPMENT AS-IS AND WITH ALL FAULTS
AND WITHOUT WARRANTY OF ANY KIND. LESSOR WILL NOT BE LIABLE FOR ANY LOSS OR
INTERRUPTION OF OR DAMAGE TO LESSEE'S BUSINESS ON ACCOUNT OF ANY MECHANICAL
FAILURE OR DELAY IN CONNECTION WITH THE FURNISHING OR USE OF THE EQUIPMENT.
Lessee acknowledges that Lessor is not a dealer or manufacturer of equipment of
any kind and is not the seller of the Equipment, and that each unit of Equipment
is of a type, size, design and capacity selected solely by Lessee. Lessee also
acknowledges that Lessor supplies the Equipment without any obligation to
install, test, erect, service or maintain the Equipment. If the Equipment is not
properly installed, does not operate as represented or warranted by the
manufacturer or seller thereof, or is unsatisfactory for any reason, Lessee
shall make any claim on account thereof solely against the manufacturer or
seller and no such occurrence shall relieve Lessee of any of its obligations
under this Lease. The only warranty applicable to any Equipment is the
manufacturer's warranty, if any (in the case of new Equipment), and Lessor makes
no warranty to Lessee beyond that contained in the manufacturer's warranty, if
any. Lessee acknowledges receipt of the manufacturer's warranty with respect to
any new Equipment. So long as Lessee is not in default under this Lease, Lessor
assigns to Lessee any manufacturer's, seller's or other warranty, whether
express or implied, on the Equipment and any claim that Lessor may have as owner
of the Equipment against the manufacturer or supplier or any other person. All
claims or actions on any warranty shall be made or prosecuted by Lessee, at its
sole expense, and Lessor shall have no obligation whatsoever to make any claim
on such warranty. Any recovery in cash or cash equivalents under such warranty
shall be made payable jointly to Lessee and Lessor. At Lessor's option, all cash
proceeds or cash equivalents from such warranty recovery may be used to repair
or replace the Equipment. Lessee shall continue to pay rent to Lessor as
specified in this Lease, notwithstanding any claim for breach of warranty.

9. INSPECTION AND ACCEPTANCE BY LESSEE. Upon delivery of the Equipment, Lessee
shall promptly make all necessary inspections and tests of the Equipment in
order to determine whether the Equipment conforms to specifications and is in
good condition and repair. Lessee shall promptly notify Lessor in writing of any
defect or other objection to the type or condition of the Equipment. If Lessee
fails to notify Lessor in writing of any defect in or objection to the Equipment
within ten (10) days after delivery of the Equipment to Lessee, it shall
conclusively be established, as between Lessor and Lessee, that Lessee has fully
inspected the Equipment and that Lessee is satisfied with and has accepted the
Equipment as in good condition and repair for all purposes of this Lease. If
Lessee determines that the Equipment is in good condition and repair before the
expiration of ten (10) days after the Equipment is delivered, and in all events
prior to placing the Equipment in service, Lessee shall execute and deliver to
Lessor a certificate of acceptance in a form satisfactory to Lessor. Lessee's
acceptance of any Equipment with knowledge of a nonconformity cannot be revoked
because of such nonconformity.

10. LOCATION AND RIGHT OF INSPECTION. The Equipment shall be delivered to and,
with the exception of motor vehicles, at all times be located at the address of
Lessee shown on this Lease, or at such other place as shall be mutually agreed
upon in writing between Lessor and Lessee. Any motor vehicles included in
Equipment are leased principally for use in the United States, and will not be
used outside of the United States and Canada. Lessor shall at any and all times
during business hours have the right to enter into and upon the premises where
the Equipment is located for the purpose of inspecting the Equipment or
observing its use. Lessee shall not move any equipment other than motor vehicles
from the location to which said Equipment is delivered except with the prior
written consent of Lessor. Lessee shall promptly advise Lessor of any
circumstances with respect to location of the Equipment which may in any manner
affect Lessor's title thereto.

11. USE. The Equipment shall be kept by Lessee in its possession and control.
Lessee shall use the Equipment with due care, and shall comply with all laws,
ordinances or regulations applicable to the use, operation or maintenance of the
Equipment and the requirements of any insurer. Lessee shall put the Equipment
only to the use contemplated by the manufacturer. Lessee shall use any motor
vehicles included in the Equipment only in the course of Lessee's own business,
and shall permit any such vehicles to be operated only by Lessee's agents or
employees or members of Lessee's immediate family who, in each case, are legally
licensed to operate such vehicles. No driver of any motor vehicle included in
the Equipment shall have the authority to act on behalf of Lessor without prior
written authorization from Lessor. If Lessor as owner of any motor vehicle
included in the Equipment receives a notice of a parking or traffic violation
which involves the payment of a fine or penalty, Lessor may (but is not required
to) pay the fine or penalty. If Lessor does so, Lessee will immediately repay
Lessor the amount of fine or penalty and an additional $10 handling and
administrative fee. If any Equipment is confiscated by any public authority, or
if Lessor suffers any

<PAGE>

damage because of Lessee's use of the Equipment for an illegal purpose, Lessee
shall pay to Lessor the amount of any such damage and, in the case of
confiscation, the Stipulated Loss Value determined in accordance with the
relevant Schedule(s) and Lessor may, at its option, terminate this Lease.

12. INDEMNITY. Lessee shall hold Lessor harmless from, and pay to Lessor the
amount of, any fines, penalties or other amounts for which Lessor is held liable
as a result of, and any legal expenses Lessor has arising out of, the use,
condition, ownership or operation of any items of Equipment, including any
claims made under the strict liability doctrine, and as a result of any lien,
encumbrance or claim made on the Equipment by anyone, including Lessee's
employees and agents. Lessee shall indemnify Lessor against and hold Lessor
harmless from, any and all claims, actions, damages (including reasonable
attorneys' fees), obligations, liabilities and liens (including any of the
foregoing arising or imposed without Lessee's fault or negligence, or in
connection with latent or other defects, or any claim for patent, trademark or
copyright infringement or under the doctrine of "strict liability"), imposed or
incurred by or asserted against Lessor or its successors or assigns, arising out
of the manufacture, purchase, lease, possession, operation, condition, return or
use of the Equipment by operation of law or by Lessee's failure to comply with
the terms of this Lease. Upon written notice by Lessor of the assertion of any
claim hereby indemnified against, Lessee shall assume full responsibility for
the defense thereof. This section shall survive termination of this Lease.

13. ALTERATIONS, REPAIRS AND MAINTENANCE. Lessee will, at its expense, keep and
maintain the Equipment in good working order, supply and install all replacement
parts and accessories when required to maintain the Equipment in good working
order, which parts and accessories shall be and become the sole property of
Lessor, and furnish all gasoline, oil, repairs, parts, tires, tubes, batteries,
accessories, service, maintenance and all other items of a similar nature
necessary for the operation of the Equipment. Lessee shall not, without the
prior written consent of Lessor, make any alterations, modifications, additions,
subtractions or improvements to, or mark the Equipment, but if so authorized by
Lessor, any such alterations, modifications, additions or improvements shall
become the property of Lessor and shall be deemed to be a part of the Equipment.
Lessee shall pay all costs required to repair all damage to, or alter, the
Equipment or any accessories, or to make the Equipment conform to any federal,
state or municipal requirements. Lessee shall follow any maintenance program
required or recommended by the manufacturer of the Equipment to make sure that
its warranty remains valid.

14. LICENSING, REGISTRATION AND TAXES. If the Equipment or use of the Equipment
requires licensing by or registration with any governmental authority, Lessee
shall, at its expense, obtain and maintain such license or registration
continuously during the term of this Lease. As additional rent, Lessee shall pay
when due all federal, state or local license and registration fees, assessments,
sales, use, heavy vehicle use, property and other taxes (excluding any tax
measured by Lessor's net income), together with any penalties or interest
applicable thereto, now or hereafter imposed by any governmental authority upon
any item of the Equipment or the rent payable hereunder or by reason of the use,
operation or maintenance of the Equipment. Lessee shall pay all such fees or
taxes whether they are payable by or assessed to Lessor or Lessee but, if under
law or custom such payments shall be made only by Lessor, Lessee shall promptly
notify Lessor and shall reimburse Lessor, upon demand, for all payments thereof
made by Lessor. If by law any such registration, license fee or tax is billed to
Lessor, Lessee, at its expense, will do any and all things required to be done
by Lessor in connection with the licensing or registration procedure and the
levy or assessment of any tax, including the billing or payment thereof. Upon
request, Lessee shall provide Lessor with proof of payment of any such fee or
tax.

15. PURCHASE. Upon the payment of the total number of rent payments specified in
any Schedule under this Lease, Lessee shall (a) Cure any default under this
lease, (b) If there is a dollar amount specified on the "Purchase Option" line
on the Schedule, have the option, upon not less than sixty (60) days prior
written irrevocable notice, to purchase all of the equipment described in that
Schedule for the amount specified, plus applicable sales tax, (c) If the words
"Fair Market Value" appear on the "Purchase Option" line on the Schedule, have
the option, upon not less than sixty (60) days prior written irrevocable notice,
to purchase all of the equipment described in that Schedule for the Fair Market
Value, as defined below, plus applicable sales tax, and (d) If there is a dollar
amount specified on the "Purchase Agreement" line on the Schedule, be required
(and Lessee hereby irrevocably agrees) to purchase all of the Equipment
described in that Schedule for the amount specified, plus applicable sales tax.
Any purchase of any Equipment pursuant to the preceding sentence shall be "as
is, where is", with all faults and without any warranty whatsoever (and Lessor
shall convey the Equipment to Lessee by Bill of Sale containing a disclaimer of
warranties similar to Section 8 above). For purposes of this Lease, "Fair Market
Value" means the Fair Market Value of the Equipment to as determined either (i)
by written agreement of Lessor and Lessee, (ii) at Lessee's expense, by a
professional appraiser acceptable to Lessor , or (iii) if the Fair Market Value
cannot be determined by either of the preceding methods, as determined by Lessor
in a commercially reasonable manner. Lessor may require payment of the Purchase
Option or Purchase Agreement amount at any time not more than thirty (30) days
prior to the expiration of the lease term with respect to the relevant schedule.

16. INSURANCE. Lessee, at its expense, shall procure, maintain and pay for (a)
with respect to any Equipment other than motor vehicles, insurance against the
loss or theft of or damage to the Equipment, for the "Stipulated Loss Value"
determined in accordance with the relevant Schedule(s), naming Lessor and its
assigns as loss payee, (b) comprehensive general liability insurance providing
coverage for bodily injury and property damage with combined single limits of at
least $1 million not subject to an annual aggregate, naming Lessor and its
assigns as an additional insured, and endorsed to act as primary insurance with
respect to Lessor, (c) in the case of motor vehicles included in the Equipment,
comprehensive and collision damage coverage for the actual cash value of the
motor vehicle(s) and with a deductible not greater than the insurance deductible
specified in the Schedule, naming Lessor and its assigns as loss payee, (d) in
the case of motor vehicles included in the Equipment, motor vehicle liability
insurance covering bodily injury or property damage arising out of the
ownership, maintenance or use of the vehicle with combined single limits of at
least $1 million and naming Lessor and its assigns as additional insured, and
endorsed to act as primary insurance with respect to Lessor, and (e) any other
insurance required by Lessor or any governmental authority. All such insurance
shall be in form and amount, and provided by an insurer, satisfactory to Lessor.
Lessee shall deliver the policies of insurance or duplicates thereof or
certificates of insurance to Lessor at the time the lease is signed or prior to
the delivery of the Equipment and thereafter thirty (30) days prior to each
policy renewal. Each insurer shall agree by endorsement upon the policy or
policies issued by it or by independent instrument furnished to Lessor that the
insurer will provide thirty (30) days prior written notice to Lessor of any
cancellations or non-renewal of the policy or any material change in policy
conditions. Lessee shall comply with all restrictions (including any
geographical limitations) contained in any insurance policies. All insurance
policies shall provide that the insurance shall not be invalidated as to Lessor
by any act, omission or neglect of Lessee. Lessee shall notify Lessor
immediately in writing of any accident involving the Equipment regardless of the
amount of damage, and shall cooperate fully with Lessor and all insurance
companies in the investigation, prosecution and defense of claims. The proceeds
of any insurance, at the option of Lessor, shall be applied (aa) toward the
replacement, restoration or repair of the Equipment, or (bb) toward payment of
the obligations of Lessee under this Lease. Lessee hereby appoints Lessor as
Lessee's attorney-in-fact to make claim for, receive payment of, and execute and
endorse all documents, checks or drafts for loss or damage under any such
insurance or pay said fees, assessments, charges and taxes, as the case may be.
In that event Lessee shall reimburse Lessor for the cost thereof upon demand,
and failure to repay the same shall constitute an Event of Default under this
Lease.

17. LOSS AND DAMAGE. Lessee hereby assumes and shall bear the entire risk of
loss, theft, damage or destruction of all or any item of the Equipment from any
cause whatsoever; and no loss, theft, damage or destruction of all or any item
of the Equipment shall relieve Lessee of its obligation to pay rent or of any
other obligation under this Lease, which shall continue in full force and
effect, notwithstanding such loss, theft, damage or destruction. This risk of
loss shall pass to Lessee on the earlier of (i) delivery of the Equipment to a
carrier for shipment to Lessee; (ii) tender of the Equipment to Lessee; or (iii)
acknowledgment by a bailee who holds the Equipment of Lessee's right to
possession of the Equipment. In the event of damage to any item of Equipment,
Lessee shall immediately place the same in good repair (ordinary wear and tear
excepted). If Lessor determines that any item of Equipment is lost, stolen,
destroyed or damaged beyond repair, Lessee, at the option of Lessor, will (a)
replace the same with similar equipment in good repair, or (b) pay Lessor in
cash all of the following: (aa) all amounts then owed by Lessee to Lessor under
this Lease, and (bb) the Stipulated Loss Value of said item of Equipment,
determined as of that date in accordance with the Schedule(s), less any proceeds
of insurance thereon received by Lessor. Upon Lessor's receipt of such payment,
Lessee shall be entitled to whatever interest Lessor may have in said item of
Equipment, in its then condition and location, without warranties, express or
implied, and this Lease shall be terminated with respect to such item.

18. DEFAULTS. The occurrence of any one or more of the following events shall
constitute an Event of Default under this Lease:

      (a)  Lessee shall fail to make any rent or other payment when due; or
      (b)  Lessee shall fail to perform or observe any other covenant, condition
           or agreement to be performed or observed by it under this Lease and
           such failure shall continue for a period of ten (10) days after
           written notice thereof is delivered to Lessee by Lessor; or
      (c) Any representation or warranty made by Lessee in this Lease or in any
document or certificate furnished to Lessor in connection with or pursuant to
this Lease (including but not limited to financial statements) shall have been
false in any material respect when made or furnished; or
      (d) Lessee shall become insolvent or bankrupt or make an assignment for
the benefit of creditors or consent to the appointment of a trustee or receiver,
or a trustee or receiver shall be appointed for Lessee or for a substantial part
of its property without its consent and shall not be dismissed for a period of
thirty (30) days, or bankruptcy, reorganization or insolvency proceedings shall
be instituted by or against Lessee and, if instituted against Lessee shall no be
dismissed for a period of thirty (30) days, or Lessee dies, is dissolved,
terminates its existence or its business is discontinued; or
      (e) Lessee attempts to remove, sell, transfer, encumber, part with
possession of or sublet all or any item of the Equipment; or
      (f)Lessee is liquidated or dissolved, or commences any acts relative
thereto, or, without the prior written consent of Lessor, (i) Lessee sells or
otherwise disposes of all or substantially all of the assets of Lessee, (ii)
Lessee merges or consolidates with any other person, or (iii) if Lessee is a
corporation. ownership, control, or power to vote fifty percent(50%) or more of
the outstanding shares of any class of voting securities of Lessee is
transferred by the current holders, in one or more transactions: or

<PAGE>

      (g) Any indebtedness of Lessee (including but not limited to indebtedness
to Lessor or any of its affiliates) is not paid when due, or Lessee defaults
under any bond, debenture, note or other evidence of indebtedness of Lessee or
under any indenture or other instrument under which any such evidence of
indebtedness has been issued or by which it is governed and payment of such
indebtedness is accelerated.

19. REMEDIES. Upon the occurrence and during the continuation of any Event of
    Default, Lessor shall have all the rights and remedies provided by
    applicable law and by this Lease. In addition to the rights and remedies
    provided by applicable law, Lessor may, at its option, declare this Lease to
    be in default. Upon declaring this Lease to by in default, Lessor, at its
    sole discretion, may exercise any one or more of the following remedies:

      (a)  terminate this Lease; or
      (b) declare immediately due and payable, without notice or demand to
Lessee, the sum of (i) the accrued and unpaid rent payments for the period
ending on the date of default; (ii) the present value of any and all rent
payments for the period from the date of default throughout the scheduled
expiration of this lease; (iii) any purchase agreement amount specified on the
Purchase Agreement line on the relevant Schedule(s); (iv) if and only if Lessee
has previously exercised an option to purchase pursuant to Section 15 hereof,
any purchase option amount specified on the Purchase Option line on the relevant
Schedule(s); and (v) any other sums then payable under the Lease; or
      (c) cause Lessee, upon written demand of Lessor and at Lessee's expense,
to return promptly any or all items of Equipment to Lessor in accordance with
all of the terms of Section 22 hereof, or Lessor, at its option, may take
possession of any or all items of Equipment without demand or notice where the
same may be located without any court order or process of law and remove the
same without liability for injuries suffered through or loss caused by such
repossession, and such repossession shall not constitute termination of this
Lease unless Lessor expressly terminates this Lease in writing, and Lessee
waives any and all rights to notice and judicial hearing with respect to the
repossession or attachment of the Equipment by Lessor in the event of default
under this Lease by Lessee; or
      (d) sell or lease any or all items of Equipment at public or private sale
or lease at such time(s) as Lessor may determine and, if notice thereof is
required by law, any notice in writing of such sale or lease by Lessor to Lessee
not less than ten (10) days prior to the date thereof shall constitute
reasonable notice thereof to Lessee; or otherwise dispose of, hold, use,
operate, or keep idle such Equipment, all as Lessor, at its sole discretion, may
determine and all free and clear of any rights of Lessee and without any duty to
account to Lessee for such action or inaction or for any proceeds with respect
thereto; or
      (e) exercise any other right or remedy which may be available to Lessor
under the Uniform Commercial Code or any other applicable law or proceed by
appropriate court action to enforce the terms of this Lease, to recover
possession of the Equipment, to recover damages for the breach of this Lease or
to rescind this Lease as to any or all Equipment. Lessor may elect, whether
before or after recovering possession of the Equipment, by written notice to
Lessee, to cause Lessee to pay Lessor as liquidated damages for loss of a
bargain and not as a penalty, and in lieu of all other sums due to Lessor for
the remaining term of this Lease (except any indemnification obligation under
Section 12, which shall survive the payment of the Stipulated Loss Value) on the
date specified in such notice, an amount equal to the rent payment or payments
and other payments under the Lease that are due and payable as of the date of
the written notice, plus a sum equal to the Stipulated Loss Value of the
Equipment, determined as of the date of the written notice in accordance with
the Schedule(s), reduced by any net proceeds of the disposition of the Equipment
which were previously received by the Lessor. In the event Lessor collects the
liquidated damages specified in the preceding sentence and has not previously
sold or re-leased the Equipment, Lessor shall appoint Lessee as Lessor's agent
to dispose of the Equipment at the best price obtainable on an "as is, where is"
basis and Lessee shall be entitled to the proceeds of such sale of the Equipment
to the extent they do not exceed the Stipulated Loss Value and shall pay any
excess to Lessor. Lessee shall pay Lessor all costs and expenses, including
attorneys' fees, incurred by Lessor in exercising any of its rights or remedies
under this Lease or in enforcing any of the terms or conditions of this Lease.
Lessee shall continue to be liable for all indemnities under this Lease and for
all legal fees and other costs and expenses resulting from an event of Default
or the exercise of Lessor's remedies, including placing any Equipment in the
condition required by Section 22 of this Lease, notwithstanding Lessor's
exercise of any right or remedy under this Lease. Except as expressly provided
above, no remedy is exclusive, but each shall be cumulative and in addition to
any other remedy referred to above or otherwise available to Lessor at law or in
equity. The repossession or subsequent sale or lease by Lessor of any item of
Equipment shall not bar an action for a deficiency as herein provided and the
bringing of any action or the entry of judgment against Lessee shall not bar
Lessor's right to repossess any or all items of Equipment. No express or implied
waiver by Lessor of any default shall constitute a waiver of any other default
by Lessee or a waiver of any of Lessor's rights. To the extent permitted by
applicable law, Lessee hereby waives any rights now or hereafter conferred by
statute or otherwise which may require Lessor to sell, lease or otherwise use
any Equipment in mitigation of Lessor's damages as set forth in this Section 19
or may otherwise limit or modify any of Lessor's rights or remedies under this
Section 19.

LESSEE AGREES THAT ANY ACTION BY LESSEE OR LESSOR CONCERNING THE LEASE SHALL BE
VENUED IN THE COURTS OF THE STATE OF MINNESOTA, AND LESSEE HEREBY SUBMITS TO THE
PERSONAL JURISDICTION OF THE COURTS OF MINNESOTA. BOTH FEDERAL AND STATE, IN ANY
ACTION WITH RESPECT TO THIS LEASE AND AGREES THAT ANY STATE COURT ACTION SHALL
BE VENUED IN THE DISTRICT COURT OF HENNEPIN COUNTY, MINNESOTA. LESSOR AND LESSEE
EACH IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS LEASE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

20. ASSIGNMENT. Lessee shall not assign, pledge or hypothecate this Lease in
whole or in part, nor any interest in this Lease, nor shall Lessee sublet or
lend any item of the Equipment, nor pledge, mortgage or otherwise encumber the
Equipment or permit it to be encumbered, without the prior written consent of
Lessor. Lessee's interest herein may not be assigned or transferred by operation
of the law. Consent to any of the foregoing acts shall not be deemed to be
consent to any subsequent similar act. Lessor may assign this Lease or mortgage
the Equipment or both in whole or in part, without notice to Lessee. If Lessee
is given notice of such assignment, it shall acknowledge receipt of that notice
in writing. Each assignee or mortgagee from Lessor shall have all of the rights,
but none of the obligations, of Lessor under this Lease. Lessee shall not assert
against any assignee and/or mortgagee any defense, counterclaim or offset that
Lessee may have against Lessor. Upon receipt from Lessor of written notice of
assignment, Lessee will pay to the assignee any portion of the rent assigned to
the assignee. Lessee's obligation to pay rent to the assignee shall be absolute
and unconditional and shall not be subject to any defense or offset and said
obligations shall continue until Lessee receives a written notice from the
assignee that all indebtedness secured by such assignment has been paid in full.
Notwithstanding any assignment, Lessor warrants that Lessee shall quietly enjoy
use of the Equipment, subject to the terms and conditions of this Lease. Subject
to this Section 20, this Lease inures to the benefit of and is binding upon the
heirs, legatees, personal representatives, successors and assigns of Lessor and
Lessee.

21.OWNERSHIP. The Equipment is and shall at all times remain the sole and
exclusive property of Lessor. Lessee shall have no right, title or interest
therein or thereto except as expressly set forth in this Lease. Lessee has no
right, title or interest in the property except as Lessee. The Equipment shall
remain personal property regardless of whether it becomes affixed or attached to
real property, or permanently rests upon any real property or any improvement
thereon. Lessee shall not attach the Equipment to any personal or real property
so as to cause the property to become an accession or fixture thereto or take
any action which would confer upon any person having an interest in such real or
personal property an interest in the Equipment. Lessee agrees to execute all
such agreements and other documents, and to obtain the execution thereof, in
recordable form, by all parties having an interest in any real property to which
any of the Equipment is affixed, as Lessor may, from time to time, reasonably
request with respect to the identity of the Equipment as personal property, and
Lessee further consents to the recordation of all such agreements and documents.
Lessee shall affix to the Equipment and maintain thereon such labels, plates or
decals as may be provided by Lessor, or conspicuously mark the Equipment with
such language as Lessor may reasonably request, to the effect that such
Equipment is owned by Lessor. Lessor is hereby authorized at Lessee's expense to
cause this Lease or any financing statement in respect thereto, showing the
interest of Lessor in the Equipment. to be filed or recorded with any
governmental office deemed appropriate by Lessor. A carbon, photographic or
other reproduction of this Lease or any financing statement filed pursuant to
this Lease may be filed by Lessor as a financing statement. Lessee shall execute
all documents requested by Lessor to effect any filing.

22. SURRENDER. Upon expiration of this Lease with respect to each unit of
Equipment, Lessee shall (unless Lessee shall have exercised an option, or have
been required, to purchase such unit of Equipment and shall have paid all
amounts payable pursuant to Section 15 with respect thereto) return each unit of
Equipment to Lessor free of all advertising or insignia placed thereon by
Lessee, and in good condition, repair and working order (ordinary wear and tear
resulting from the proper use of the Equipment excepted). Absence or
malfunctioning of a catalytic converter or other pollution control equipment
with respect to any motor vehicle included in the Equipment shall not be
considered ordinary wear and tear. Lessee shall return the Equipment, in
accordance with Lessor's instructions, either (a) by delivering the Equipment at
Lessee's sole cost and expense, to any location selected by Lessor, within the
county to which the Equipment was moved with Lessor's consent, to the nearest
office of Lessor, or the location identified on the relevant Schedule for return
of the Equipment (whichever of the foregoing is selected by Lessor at its sole
discretion); or (b) by loading the Equipment on board any carrier designated by
Lessor and shipping the same, freight collect, to a destination selected by
Lessor. If Lessee fails to return a unit of Equipment to Lessor at the
expiration of this Lease, Lessee shall pay rent at the rate stated on the
Schedule until the Equipment is returned to Lessor. This provision shall not be
construed to be right of renewal, or to authorize Lessee to retain the Equipment
after the expiration of the Lease.

23. NO OFFSET; IRREVOCABLE AND INDEPENDENT PROMISES. Upon Lessee's acceptance of
any Equipment, Lessee's promises to pay rent and perform all other obligations
with respect to such Equipment shall become irrevocable and independent, and
shall not be subject to cancellation, termination, modification, repudiation,
excuse or substitution without the consent of Lessor or any assignee. Lessee
hereby waives any and all existing and future claims and offsets against any
rent or other payments due hereunder, and agrees to pay the rent and other
amounts due hereunder regardless of any offset or claim which may be asserted by
Lessee or on its behalf against Lessor or any other person. This is a net lease
and rent

<PAGE>

due under this Lease shall not be subject to abatement for any reason
whatsoever. Lessee hereby further acknowledges that the manufacturer or vendor
of the Equipment and their agents and employees were at no time and are not now
the agents or under the supervision of Lessor, and that Lessor was not and is
not the agent of the manufacturer or vendor.

24. WAIVERS. No waiver of Lessee's obligations, conditions or covenants shall be
deemed to take place unless the waiver is in writing and signed by Lessor.
Failure to exercise any remedy which Lessor may have under this Lease or any
acquiescence in the default of Lessee by Lessor shall not constitute a waiver of
any obligation of Lessee, including the obligation as to which Lessee is in
default; and Lessor shall be entitled to pursue any remedy available to it under
this Lease until Lessee has rendered complete performance of all obligations
under this Lease.

25. FINANCIAL AND OTHER REPORTS. During the term of this Lease, Lessee shall
furnish Lessor with annual financial statements within one hundred twenty (120)
days after the end of Lessee's fiscal year, and Lessee shall provide Lessor such
other financial information as Lessor may from time to time request, including,
without limitation, any reports filed with federal or state regulatory agencies.
Lessee hereby warrants and represents that all financial statements previously
delivered or to be delivered to Lessor by or on behalf of Lessee, and any
statements and data submitted in writing to Lessor in connection with this
Lease, are or will be true and correct and did or will fairly present the
financial condition of Lessee for the periods involved.

26. MASTER LEASE. In the event Lessor shall hereafter lease to Lessee additional
Equipment, the Equipment shall be described on a Schedule executed by the
parties which shall refer to this Lease. Each Schedule shall, in addition to
describing the Equipment to be leased thereunder, set forth the term of the
Lease with respect to that Equipment, the amount of rent, the manner of payment
of the rent, the number of rent payments, the commencement of the rent payments,
the amount of any security deposit and the stipulated loss value with respect to
that Equipment, whether Lessee has the option, or shall be required, to purchase
the Equipment and at what price, and may include other provisions. Each such
Schedule when executed by the parties shall be deemed to be a part of this
Lease, and all of the provisions of this Lease, except such provisions as may be
explicitly amended by a Schedule, shall govern such Schedule(s), it being
understood and agreed that this Lease shall be the Master Lease.

27. CROSS DEFAULT. Lessee hereby agrees that any default by Lessee in the
payment of rent or performance of any other term or condition of any lease
between Lessor and Lessee, or under any Schedule, whether previously or
hereafter entered into, shall at the option of Lessor constitute an Event of
Default in all Leases or Schedules, including this Lease between Lessor and
Lessee, and that thereupon the provisions of Section 19 above shall be
applicable.

28. NOTICES. All notices required or permitted under this Lease shall be
sufficient if delivered personally or mailed to the party receiving the notice
at the address set forth below that party's signature, or at such other address
as either party may designate in writing delivered to the other party from time
to time. Any such notice shall be effective upon delivery or forty-eight (48)
hours after it has been deposited in the United States mail, duly addressed and
postage prepaid.

29. MISCELLAN'EOUS. LESSEE ACKNOWLEDGES, AND AGREES THAT THIS LEASE IS INTENDED
AS A "FINANCE LEASE" AS DETERMINED IN MINN. STAT. SECTION 336.2A-103(l)(G), AND
THAT LESSOR IS ENTITLED TO ALL BENEFITS, PRIVILEGES AND PROTECTIONS OF A LESSOR
UNDER A FINANCE LEASE. This Lease contains the entire agreement between the
parties and embodies any oral representations, negotiations or agreement made in
connection herewith. If more than one party executes this Lease as Lessee, all
obligations to be performed by Lessee shall be the joint and several liability
of all such parties. Wherever the context permits, Lessee's representations,
warranties and covenants under this Lease shall survive the delivery and return
of the Equipment. Any provision of this Lease which may be determined by
competent authority to be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective, to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions of this Lease,
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provisions in any other jurisdiction. To
the extent permitted by applicable law, Lessee hereby waives any provision of
law which renders any provision of this Lease prohibited or unenforceable in any
respect. No term or provision of this Lease may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination is
sought. To the extent that payments hereunder do constitute interest, the
parties agree that any interest to be paid the Lessor shall in no contingency
exceed the maximum amount permissible under applicable law. If under any
circumstances whatsoever, interest would otherwise be payable to Lessor at a
rate in excess of that permitted under applicable law, then the interest payable
to Lessor shall be reduced to the maximum amount permitted under applicable law,
and if under any circumstance Lessor shall ever receive anything of value deemed
interest by applicable law which would exceed interest at the highest lawful
rate, any amount equal to any excessive interest shall be applied to the
reduction of the principal amount of the obligation owing to Lessor and not to
the payment of interest, or if such excessive interest exceeds the unpaid
principal amount of such obligation, such excess shall be refunded to the
Lessee. All interest paid or agreed to be paid to Lessor shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal amount of the
obligations owing to the Lessor so that the rate of interest thereon for such
full period shall not exceed the maximum amount permitted by applicable law.
Nothing herein contained shall give or convey to Lessee any right, title or
interest in and to any Equipment leased hereunder except as Lessee.
NOTWITHSTANDING THE PRECEDING SENTENCE, LESSEE ACKNOWLEDGES THAT FOR INCOME TAX
PURPOSES ONLY, LESSOR IS TREATING LESSEE AS OWNER OF THE EQUIPMENT AND THAT
LESSEE HAS NEITHER SOUGHT NOR RECEIVED TAX ADVICE FROM LESSOR AS TO THE
AVAILABILITY TO LESSEE OF ANY TAX BENEFITS WITH RESPECT TO THE EQUIPMENT. In the
event this lease is construed by a court as a security agreement rather than as
a lease (which is hereby declared contrary to the intent of the parties), Lessee
hereby grants Lessor a first priority security interest in the Equipment free
and clear of any other liens, encumbrances or security interests and agrees to
execute any financing statements, fixture filings or other instruments necessary
or expedient for filing, recording or perfecting the interest and title of
Lessor and any assignee of Lessor at the request of Lessor, and all costs
incurred in connection therewith (including, without limitation, filing fees and
taxes) shall be paid by Lessee. The captions in this Lease are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof. As used in this Lease, the term "Lease' shall include all exhibits and
schedules related to this Lease. The neuter includes the masculine or feminine,
the singular includes the plural. and the word "Lessor" includes all assignees
of Lessor. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (BUT NOT THE LAW OF CONFLICTS) OF THE STATE
OF MINNESOTA, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Time is of the essence hereof. Lessee's obligations hereunder shall survive the
expiration or earlier termination thereof. This Lease shall not become effective
or binding until executed by Lessor at its place of business in Eden Prairie,
Minnesota. Lessee shall promptly notify Lessor of any changes in Lessee's
address. Lessee warrants and agrees that the Equipment is leased and will be
used for business purposes only and that the Equipment will not be used for
personal, family or household purposes.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the 19th day of
October 1999.

ACI TELECENTRICS, INC., LESSEE              LEASE FINANCE GROUP, INC., LESSOR

By: /s/ Russell Jackson                     By: /s/ Kathleen Hanson
    -------------------                            -------------------
Title: CFO                                  Title: Vice President- Operations
       ---                                         --------------------------

Address:  Suite 300                       Address: Suite 203
          3100 West Lake Street                    7700 Equitable Drive
          Minneapolis, MN 55416                    Eden Prairie. MN 55344

<PAGE>

                           SCHEDULE TO LEASE AGREEMENT

LESSOR:     LEASE FINANCE GROUP, INC.         LEASE NO.               3184
       --------------------------------                -------------------
LESSEE:     ACI TELECENTRICS, INC.            SCHEDULE NO.     1
       --------------------------------                   ------

                                    EQUIPMENT

                  Computer Equipment, per attached Schedule "A"

Location of Equipment (if other than
Lessee's address on the Lease):      See Exhibit "A"           County:
                               ---------------------------             ---------

   INITIAL LEASE TERM         RENT PAYMENT              RENT PAYMENT DUE DATE

    36 Months              $ 12,800.48 per month,    The ___ tenth _X_ twentieth
    36 Payments            (plus applicable taxes)        day of each month

PAYMENT APPLIES TO:                       STIPULATED LOSS VALUE:
1st Payment             $  25,600.96                   YEAR    YEAR      YEAR
Taxes _____%            $                 $405,834       1 $____ 4 $______ 7
Administrative Fee      $      50.00      $318,301       2 $____ 5 $______ 8
Other                   $       0.00      $206,896       3 $____ 6 $______ 9
Security Deposit        $       0.00
Total                   $  25,650.96
Amount Received         $       0.00         CHECK APPLICABLE LINE
Amount Due              $  25,650.96      ___   Purchase Option    $ ________
                                          _X_   Purchase Agreement $ ________

Other Terms:    "1st Payment" refers to the first and thirty-sixth
                lease payments, to be due at lease inception.

Rent Payments shall commence upon Lessee's acceptance of the Equipment and shall
be made on each Rent Payment Due Date thereafter until the total number of
Payments has been made. Lessor hereby leases to Lessee and Lessee hereby leases
from Lessor the Equipment described above on the terms and conditions set forth
above and pursuant to and subject to all terms and conditions of the Lease
Agreement between Lessor and Lessee dated October 19, 1999.

ACCEPTED                                    DATED AS OF     October 19, 1999
                                                       -------------------------

LEASE FINANCE GROUP, INC. (LESSOR)          ACI TELECENTRICS, INC.     (LESSEE)

By:/s/ Kathleen Hanson                      By:/s/ Russell Jackson
   ---------------------------------           -------------------
  Title: Vice President-Operations            Title: CFO
         ---------------------------                 ---
By:                                         By:
    --------------------------------             -------------------------------
  Title:                                     Title:
        ----------------------------               -----------------------------

<PAGE>

                           SCHEDULE TO LEASE AGREEMENT

LESSOR:     LEASE FINANCE GROUP, INC.         LEASE NO.      3184
       --------------------------------------          ------------------
LESSEE:     ACI TELECENTRICS, INC.            SCHEDULE NO.    2
       --------------------------------------              ----------

                                    EQUIPMENT

            Office Furniture and Equipment, per attached Schedule "A"

Location of Equipment (if other than
Lessee's address on the Lease):      2951 Churn Creek Road       County: Shasta
                                --------------------------------        -------
                                     Redding, CA 96002
--------------------------------------------------------------------------------

INITIAL LEASE TERM          RENT PAYMENT             RENT PAYMENT DUE DATE

    60     Months         $ 5,248.78 per month,     The ____ tenth _X_ twentieth
    60     Payments       (plus applicable taxes)       day of each month

PAYMENT APPLIES TO:                     STIPULATED LOSS VALUE:
1st Payment             $ 10,497.56                  Year         Year      Year
Taxes         %         $                $  251,882   1 $ 153,105   4 $       7
Administrative Fee      $     50.00      $  227,188   2 $ 106,186   5 $       8
Other                   $      0.00      $  192,616   3 $           6 $       9
Security Deposit        $      0.00
Total                   $ 10,547.56
Amount Received         $      0.00      CHECK APPLICABLE LINE
Amount Due              $ 10,547.56      ___ Purchase Option        $ ______
                                         _X_ Purchase Agreement     $ ______

Other Terms:        "lst Payment" refers to the first and sixtieth
                      lease payments, to be due at lease inception.

Rent Payments shall commence upon Lessee's acceptance of the Equipment and shall
be made on each Rent Payment Due Date thereafter until the total number of
Payments has been made. Lessor hereby leases to Lessee and Lessee hereby leases
from Lessor the Equipment described above on the terms and conditions set forth
above and pursuant to and subject to all terms and conditions of the Lease
Agreement between Lessor and Lessee dated October 19,1999.

ACCEPTED                                    DATED AS OF     October 19, 1999
                                                       -------------------------

LEASE FINANCE GROUP, INC. (LESSOR)              ACI TELECENTRICS, INC  (LESSEE)
By: /s/ Kathleen Hansen                         By: /s/ Russ Jackson
   --------------------------------------          -----------------
  Title: Vice President-Operations                 Title: CFO
         --------------------------------                 ---

By:                                      By:
    ---------------------------------        ---------------------------------
  Title:                                   Title:
         ----------------------------             ----------------------------

<PAGE>

SCHEDULE A   (MULTIPLE EQUIPMENT/MULTIPLE LOCATIONS)           PAGE  1  OF    1
                                                                    ---      --

--------------------------------------------------------------------------------
                           LOCATION OF EQUIPMENT

                                              Equip. Cost          Rental Amount
Street:  3100 West Lake Street, Suite 300     $ 9,643.91           $ 310.26

City:    Minneapolis                              Tax %             Tax Amount
                                              7% Up Front
State:   MN
Zip      55416                                    TOTAL            $ 310.26

Manufacturer/
Description:   See Exhibit "A"

--------------------------------------------------------------------------------

                           LOCATION OF EQUIPMENT

                                              Equip. Cost          Rental Amount
Street:  2951 Churn Creek Road                $ 388,232.68         $  12,490.22

City:    Redding                              Tax %                 Tax Amount
                                              7.25% Up Front
State:   CA
Zip      96002                                            TOTAL    $ 12,490.22

Manufacturer/
Description:   See Exhibit "A"

This Schedule is attached to and made a part of that
Lease No. 3184 dated the 19th
day of October, 1999, between the
Lessee and LEASE FINANCE GROUP, INC.

This Schedule A is hereby verified as correct by the Lessee.

LESSEE: ACI TELECENTRICS, INC.
        ----------------------

By: /s/ Russell Jackson
    -------------------
Title:  CFO
        ---

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00007-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00007-of-00352.parquet"}]]