Document:

<PAGE>   1
                               SECOND AMENDMENT TO
                     FORBEARANCE AND MODIFICATION AGREEMENT

EFFECTIVE DATE.   AS OF APRIL 1, 2001

PARTIES.

                  BANK ONE, ARIZONA, NA, as administrative agent for Banks that
                  are parties to the Credit Agreement (defined below) and as a
                  Bank ("Bank One"); FLEET NATIONAL BANK, as Documentation
                  Agent, and as a Bank ("Fleet"); and IMPERIAL BANK
                  ("Imperial"), as a Bank. Bank One, Fleet, and Imperial are
                  sometimes individually referred to as a Bank and collectively
                  as the "Banks".

                  HYPERCOM CORPORATION, a Delaware corporation ("Hypercom"), and
                  each of its undersigned Subsidiaries, Affiliates, and other
                  parties obligated under the Credit Documents to Banks
                  (hereinafter individually and collectively referred to as
                  "Borrower").

         This Second Amendment to Modification and Forbearance Agreement (the
         "Second Amendment") is made by and among Banks and Borrower. For
         present and fair consideration, the receipt and sufficiency of which
         are hereby acknowledged, Banks and Borrower confirm and agree as
         follows:

RECITALS.

         A. Loans from Banks to Borrower. Banks and Hypercom are parties to the
"Credit Agreement" dated as of August 31, 2000 (the "Credit Agreement"). Under
the Credit Agreement, Banks have made available to Hypercom loans and other
financial accommodations (including an RLC and Letters of Credit, collectively,
the "Loans") in the committed amount of $60,000,000.

         B. Obligations Owing from Borrower to Banks. Computed as of March 28,
2001, Hypercom is indebted as follows to Banks: (i) in the amount of
$38,255,755.51 for unpaid principal; (ii) in the amount of $316,844.99 in
interest accrued at the non-default rate; and (iii) in additional amounts for
accrued and accruing interest, recoverable costs (including reasonable
attorneys' fees), certain indemnities, and other expenses.

         C. Collateral Held By Banks for Satisfaction of Obligations Owing from
Borrower. As security for satisfaction of the Obligations owing from Borrower,
Banks hold valid and perfected,

                                  Page 1 of 13
<PAGE>   2
first and prior liens in (among other things) the Collateral described in the
Security Agreements executed by Borrower in conjunction with the Credit
Agreement. In addition, Banks hold valid and perfected, first and prior liens on
the Additional Collateral described in the "Forbearance and Modification
Agreement" dated as of November 14, 2000 (the "Forbearance Agreement") executed
by Borrower and delivered to Banks on or about December 22, 2000. Unless
otherwise indicated, capitalized terms used in this Second Amendment correspond
to the capitalized terms used in the Forbearance Agreement. The lien and
security interests held by the Banks are evidenced by (among other things) the
Security Documents, the Forbearance Agreement, and all other related Credit
Documents executed and delivered by Borrower to Banks.

         D. No Defenses. Borrower has no defenses, offsets, counterclaims, or
adverse claims of any kind or amount with respect to the Obligations. In
addition, Borrower has no defenses, offsets, counterclaims, or adverse claims of
any kind with respect to the Collateral and the Additional Collateral interests
held by Banks as security for satisfaction of the Obligations.

         E. Identified Defaults. As identified on Exhibits "A" to the
Forbearance Agreement and the First Amendment (defined below), Borrower is in
default of certain of the financial covenants contained in the Credit Agreement
(the "Identified Defaults").

         F. Request for Certain Forbearance and Loan Modifications. Borrower
initially requested that Banks forbear from exercising their rights and remedies
with respect to certain of the "Identified Defaults" through December 31, 2000,
or, if extended pursuant to the terms of this Forbearance Agreement, through
January 31, 2001 (the "Forbearance Period"). In addition, Borrower requested
that Banks modify certain terms and conditions of the Credit Documents. Banks
granted Borrower's initial request for forbearance by agreeing to the terms and
conditions of the Forbearance Agreement. Borrower asked for an initial extension
of the Forbearance Period through March 31, 2001. Banks granted Borrower's
initial request for an extension of the Forbearance Agreement by agreeing to the
terms and conditions of the "First Amendment To Forbearance And Modification
Agreement" dated as of February 1, 2001 (the "First Amendment"). Borrower now
requests from Banks additional forbearance and additional modifications to the
Credit Documents, to the Forbearance Agreement, and to the First Amendment.
Although Banks are under no obligation to do so, Banks are willing to provide
Borrower with additional limited forbearance, and Banks are willing to provide
additional limited modification of the Credit Documents, the Forbearance
Agreement, and the First Amendment upon the terms and conditions set forth
herein. The forbearance under this Second Amendment, like the forbearance
provided in the Forbearance Agreement and the First Amendment, is being provided
by Banks to allow Borrower to secure replacement financing to satisfy
indefeasibly the entire amount of the Obligations owing to Banks under the
Credit Documents.

                                  Page 2 of 13
<PAGE>   3
PROVISIONS.

         1. Accuracy of Recitals. Borrower acknowledges that the Recitals set
forth above are true, accurate and correct. The Recitals are incorporated into
these Provisions without any difference or distinction between the two (2)
segments of this Second Amendment.

         2. Reaffirmation of Loans. Except as expressly modified by this Second
Amendment, Borrower reaffirms all of its Obligations under the Credit Documents,
under the Forbearance Agreement, and under the First Amendment.

         3. Extension of Forbearance Period. Provided that Borrower satisfies
all of the terms and conditions of the Forbearance Agreement, provided that
Borrower satisfies all of the terms and conditions of the First Amendment (other
than making the full $3,000,000 payment that was due on March 21, 2001), and
provided that Borrower satisfies all of the terms and conditions of this Second
Amendment, the Forbearance Period may be extended as follows:

EXTENSION OF                        CONDITIONS
FORBEARANCE PERIOD

From 4/1/01 through 4/15/01.        By April 11, 2001 Borrower will: (i) pay
                                    Banks an Extension Fee of $50,000; (ii)
                                    deliver to Banks confirmation from Heller
                                    that the commitment for Take Out Financing
                                    extends beyond May 15, 2001; and (iii) pay
                                    Banks $500,000 to be applied toward a
                                    permanent reduction of the outstanding
                                    Obligations . By April 13, 2001, Borrower
                                    will deliver to Banks all of the net
                                    proceeds received in relation to the
                                    financing by East Asia Heller Limited of
                                    Accounts generated by Borrower's Hong Kong
                                    Subsidiary.

From 4/16/01 through 4/30/01.       By April 16, 2001, Borrower will pay Banks
                                    an Extension Fee of $50,000. By April 20,
                                    2001, Borrower will pay Banks $1,000,000 to
                                    be applied toward a permanent reduction of
                                    the outstanding Obligations. By April 30,
                                    2001, Borrower will: (i) deliver to Banks
                                    drafts of all loan and security documents
                                    necessary for the Take Out Financing; and
                                    (ii) deliver to Banks a term sheet for
                                    mezzanine financing in the amount of at
                                    least $10,000,000. By April 27, 2001,
                                    Borrower deliver to Banks an executed,
                                    binding agreement for the sale of the
                                    Borrower's Horizon Subsidiary.

From 5/1/01 through 5/15/01.        By May 1, 2001, Borrower will pay Banks an
                                    Extension Fee of $50,000 (the "5/1 Extension
                                    Fee"), provided, however, that the 5/1
                                    Extension Fee will be waived if, by May 1,
                                    2001, the outstanding principal amount of
                                    the Obligations does not exceed $32,000,000.
                                    By May 4, 2001, Borrower will pay Banks
                                    $500,000 to be applied toward a permanent
                                    reduction of the outstanding Obligations in
                                    the event that the outstanding principal
                                    amount of the Obligations exceed $32,000,000
                                    as of May 1, 2001. By May 15, 2001, and in
                                    conjunction with the sale or financing of
                                    assets accomplished

                                  Page 3 of 13
<PAGE>   4
EXTENSION OF                        CONDITIONS
FORBEARANCE PERIOD

                                    pursuant to Section 5.6 of the Forbearance
                                    Agreement as modified by Section 4.2 of the
                                    First Amendment, Borrower will close the
                                    Take Out Financing, and repay indefeasibly
                                    and in full all outstanding Obligations.
                                    Borrower may prepay all or a portion of the
                                    payments required in this Second Amendment
                                    from any proceeds generated by the sale or
                                    financing of assets accomplished pursuant to
                                    Section 5.6 of the Forbearance Agreement as
                                    modified by Section 4.2 of the First
                                    Amendment.

         4. Modifications. The Credit Documents, the Forbearance Agreement, and
the First Amendment are hereby modified and amended as described below. In the
event of any conflict between the terms of the Credit Documents, the terms of
this Forbearance Agreement, the terms of the First Amendment, and the terms of
this Second Amendment, this Second Amendment shall control.

            4.1 Limits on Funding of Golden Eagle Leasing. Section 6.9 of the
Forbearance Agreement is modified to provide that, so long as Borrower satisfies
all other terms and conditions of the Forbearance Agreement as amended by the
First Amendment and this Second Amendment, the $1,500,000 of Hypercom cash
provided pursuant to Section 4.4 of the First Amendment may be recycled and
reused from the sale of Golden Eagle Leasing assets for the funding of Golden
Eagle Leasing.

            4.2 Limits on Payment of Expenses. During the Forbearance Agreement
as extended by this Second Amendment, Borrower is limited to payment of: (i)
expenses (in kind and in amount) listed on the Cash Flow Forecast attached as
Exhibit "B"; (ii) the Obligations; (iii) the Forbearance Fees; and (iv) the
Reimburseable Costs.

            4.3 Decrease in Certain Interest Rates. In the event that the
outstanding principal amount of the Obligations is reduced to $32,000,000 during
the Forbearance Period (as extended by this Second Amendment), then the
non-default rate interest on the RLC will be reduced to Prime Rate plus 3.75%
per annum. Thereafter during the Forbearance Period, the non-default rate of
interest on the RLC will be reduced by 25 basis points for every $2,500,000
reduction of the outstanding principal amount of the Obligations below
$32,000,000; provided however, that the non-default rate of interest will not be
reduced below Prime Rate plus 2.75%. By way of illustration, if the outstanding
principal amount of the Obligations is reduced during the Forbearance Period to
$29,500,000, then the non-default rate of interest on the RLC will be reduced to
Prime Rate plus 3.5%; and if the outstanding principal amount of the Obligations
is reduced during the Forbearance Period to $27,000,000, then the non-default
rate of interest on the RLC will be reduced to Prime Rate plus 3.25%; and so on.

         5. Conditions Precedent. Before this Second Amendment becomes effective
and Banks

                                  Page 4 of 13
<PAGE>   5
become obligated under it, and in addition to any other conditions stated in
this Second Amendment and in the Forbearance Agreement and the First Amendment,
all of the following conditions shall have been satisfied at Borrower's sole
cost and expense in a manner acceptable to Banks:

            5.1 Receipt of Documents. Banks will have received fully executed
originals of this Second Amendment and any other documents that Banks may
require or request in accordance with this Second Amendment, the Forbearance
Agreement, the First Amendment, and the Credit Documents, all in such form as
Banks may require in their reasonable discretion.

            5.2 Reimbursement of Banks' Costs and Expenses. Banks will have
received in immediately available funds all outstanding Reimbursable Costs
incurred by Banks in connection with the Forbearance Agreement, the First
Amendment, and this Second Amendment. Upon execution of this Second Amendment,
Borrower will pay Banks their current Reimbursable Costs in the aggregate amount
of $68,827.87, payable as follows: (i) $18,500 to Quarles & Brady Streich Lang
for services rendered through March 28, 2001 as counsel for the Banks as a
group; (ii) $27,827.87 to Alvarez & Marsal, Inc., for services rendered through
March 28, 2001 as financial consultants for the Banks; and (iii) $22,500,
payable to Bank One as and for its Reimbursable Costs. Thereafter, Borrower will
pay all additional Reimbursable Costs incurred by Banks during the course of the
Forbearance Period within seven (7) business days of delivery of any invoice for
payment of Reimbursable Costs.

            5.3 Forbearance From Other Lenders. During the Forbearance Period,
and except for an Amoritzation Event claimed by Bank One Capital Markets Conduit
Financing, no other lender, creditor, or lessor will enforce its rights or
remedies in relation to any default committed by Borrower under any loan
agreement, lease agreement, security agreement, or other financial agreement. In
addition, and consistent in scope and time with the forbearance provided by the
Banks, Borrower will obtain and maintain at least through the Forbearance Period
forbearance for defaults of obligations owing to its other major lenders (the
"Other Forbearance Agreements"), including direct lenders (like Webster Bank,
Tokyo Leasing, and Bank One, Arizona, NA) that provide financing for Borrower
and its Subsidiaries and Affiliates, including Golden Eagle. Copies of the Other
Forbearance Agreements will be delivered to the Banks.

         6. Borrower's Representations and Warranties. Borrower represents and
warrants to Banks as follows:

            6.1 Accuracy of Representations in Second Amendment, First
Amendment, Forbearance Agreement and Credit Documents. All representations and
warranties made and given by Borrower in this Second Amendment, in the First
Amendment, in the Forbearance Agreement, and in the Credit Documents are
accurate and correct.

            6.2 No Default. Other than the Identified Defaults, no Event of
Default has occurred and is continuing under the Credit Documents, and no event
has occurred and is continuing

                                  Page 5 of 13
<PAGE>   6
which, with notice or the passage of time or both, would be an Event of Default.

            6.3 Property. To the extent applicable, Borrower lawfully possesses
and holds a 100% ownership interest in all of the Collateral and the Additional
Collateral for the Obligations. Borrower owns all of the Collateral and the
Additional Collateral for the Obligations free and clear of any defects,
reservations of title and conditional sales contracts, and free and clear of any
Liens and security interests other than the Liens and security interests in
favor of Banks. There is no financing statement affecting any Collateral or the
Additional Collateral for the Obligations on file in any public office except
for financing statements in favor of Banks.

            6.4 Borrowing Entity. Each Borrower entity is a corporation which is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. There have been no changes in the
organization, composition, ownership, structure or formation documents of
Borrower since the inception of the Obligations. In each state and country in
which Borrower does business, it is properly licensed, in good standing, and,
where required, in compliance with fictitious name statutes.

            6.5 Authorization. This Second Amendment, and any instrument or
agreement required hereunder, are within Borrower's powers, have been duly
authorized, and do not conflict with any of its organizational papers.

            6.6 Enforceable Credit Documents/No Conflicts. The Credit Documents,
the Forbearance Agreement, the First Amendment, and this Second Amendment are
legal, valid and binding agreements of Borrower, enforceable in accordance with
their respective terms, and any instrument or agreement required hereunder or
thereunder, when executed and delivered, is (or will be) similarly legal, valid,
binding and enforceable. This Second Amendment does not conflict with any law,
agreement, or obligation by which Borrower is bound.

            6.7 Financial Information. All financial and other information
(including, but not limited to the Cash Flow Reports) that has been or will be
supplied to Banks is:

               (a) Sufficiently complete to give Banks accurate knowledge of
Borrower's financial condition;

               (b) In form and content required by Banks; and

               (c) In compliance with all government regulations that apply.

         7. Borrower Acknowledgments. Borrower hereby acknowledges and agrees
that:

            7.1 No Breach By Banks. Each of the Banks (including all of its
predecessors) has not breached any duty to Borrower in connection with the
Obligations, the Credit Documents,

                                  Page 6 of 13
<PAGE>   7
the Forbearance Agreement, the First Amendment, or this Second Amendment, and
each Bank (including all of its predecessors) has fully performed all
obligations it may have had or now has to Borrower.

            7.2 Interest, Fees, and Other Charges. All interest, fees (including
the Extension Fees under section 2 above) or other charges (including the
Reimbursable Costs under section 5.2 above) imposed, accrued, or collected by
Banks (including all their predecessors) under the Credit Documents, the
Forbearance Agreement, the First Amendment, and this Second Amendment, and the
method of computing the interest, fees, or other charges, were and are
reasonable, proper, and agreed to by Borrower and were properly computed and
collected.

            7.3 No Waiver. By entering into this Second Amendment, Banks do not
waive any existing defaults (including the Identified Defaults) or any defaults
hereafter occurring, and Banks do not become obligated to waive any condition or
obligation in any agreement between or among any of the parties hereto.

            7.4 No Future Obligations. Banks have no obligation to make any
additional loan or extension of credit to or for the benefit of Borrower, and
Banks have no obligation to provide additional forbearance or to extend further
accommodations to Borrowers.

            7.5 No Third Party Beneficiaries. This Second Amendment is not
intended for, and shall not be construed to be for, the benefit of any person
not a signatory hereto.

            7.6 Loan Balances. The outstanding balances owing on the
Obligations, as described in this Second Amendment, are true and correct.

            7.7 Fair Consideration. All payments made and Liens granted by
Borrower to Banks under the Credit Documents, the Forbearance Agreement, the
First Amendment, and this Second Amendment are for fair consideration and
reasonably equivalent value.

            7.8 Notice of Identified Defaults. Borrower has received or waives
all notice required from Banks under the Credit Documents with respect to the
Identified Defaults; and, subject to the terms and conditions of the Forbearance
Agreement, the First Amendment, and this Second Amendment, Banks presently are
free to exercise all of their rights and remedies under the Credit Agreement as
a result of the Identified Defaults committed by Borrower.

         8. Release of Banks. In consideration of the agreements of Banks set
forth in this Second Amendment, Borrower and all of its respective heirs,
personal representatives, predecessors, successors and assigns (individually and
collectively, the "Releasors"), hereby fully release, remise, and forever
discharge Banks, the parents of Banks and all other affiliates and predecessors
of Banks, and all past and present officers, directors, agents, employees,
servants, partners, shareholders, attorneys and managers of Banks, for, from,
and against any and all claims, counterclaims, liens,

                                  Page 7 of 13
<PAGE>   8
demands, causes of action, controversies, offsets, obligations, losses, damages
and liabilities of every kind and character whatsoever, including, without
limitation, any action, omission, misrepresentation or other basis of liability
founded either in tort or contract and the duties arising thereunder, that the
Releasors, or any one of more of them, has had in the past, or now has, whether
known or unknown, whether asserted or unasserted, by reason of any matter, cause
or thing set forth in, relating to or arising out of, of in any way connected
with or resulting from, the Loans, the Obligations, the Credit Documents, the
Forbearance Agreement, the First Amendment, and this Second Amendment.

         9. No Prejudice; Reservation of Rights. Except for the limited
forbearance specifically set forth herein, this Second Amendment shall not
prejudice any rights or remedies of Banks under the Credit Documents, under the
Forbearance Agreement, or under the First Amendment. Except for the limited
forbearance specifically set forth herein, each Bank reserves, without
limitation, all of its rights against any Borrower, indemnitor, guarantor, or
endorser of any of the Credit Documents, the Forbearance Agreement, the First
Amendment, and any other party liable in any way for satisfaction of the
Obligations or other losses suffered by Banks.

         10. No Impairment/Security. Except as otherwise specifically set forth
herein, the Credit Documents, the Forbearance Agreement, and the First
Amendment, remain unaffected by this Second Amendment, and all of the Credit
Documents, the Forbearance Agreement, and the First Amendment shall remain in
full force and effect. Borrower's payment and performance of Borrower's various
Obligations to Banks under the Credit Documents, the Forbearance Agreement, and
the First Amendment, including all extensions, amendments, renewals or
replacements thereof, continue to be and shall be secured by the Liens arising
under the Credit Documents, the Forbearance Agreement, and the First Amendment.
Nothing contained herein shall be deemed a waiver of any of the rights and
remedies that any of the Banks may have against Borrower or any other party, or
of any of Banks' rights and remedies arising out of the Credit Documents, the
Forbearance Agreement, or the First Amendment. During the Forbearance Period as
extended by this Second Amendment, the net assets of Borrower's Horizon
Subsidiary will not decrease materially from the net assets of Borrower's
Horizon Subsidiary as of March 31, 2001.

         11. Integration. The Credit Documents, the Forbearance Agreement, the
First Amendment, and this Second Amendment: (a) integrate all the terms and
conditions mentioned in or incidental to the Credit Documents, the Forbearance
Agreement, and the First Amendment; (b) supersede all oral negotiations and
prior and other writings with respect to their subject matter; and (c) are
intended by the parties as the final expression of the agreement with respect to
the terms and conditions set forth in those documents and as the complete and
exclusive statement of the terms agreed to by the parties. If there is any
conflict between the terms, conditions and provisions of this Seconde Amendment
and the terms, conditions, or provisions of any other agreement or instrument,
including any of the other Credit Documents, the Forbearance Agreement, and the
First Amendment, the terms, conditions and provisions of this Second Amendment
shall prevail. No modification of this Second Amendment or the Credit Documents,
the Forbearance Agreement, and the First Amendment shall be effective unless in
writing and signed by the applicable parties to be bound thereby.

                                  Page 8 of 13
<PAGE>   9
         12. Counterparts. This Second Amendment and any attached consents or
exhibits requiring signatures may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same agreement.

         13. Invalidity. If any court of competent jurisdiction determines any
provision of this Second Amendment or any of the Credit Documents, the
Forbearance Agreement, or the First Amendment to be invalid, illegal or
unenforceable, that portion shall be deemed severed from the rest, which shall
remain in full force and effect as though the invalid, illegal or unenforceable
portion had never been a part of this Second Amendment, the Forbearance
Agreement, the First Amendment, or the Credit Documents.

         14. Successors and Assigns. This Second Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, Borrower may not transfer its rights under the
Second Amendment, the First Amendment, the Forbearance Agreement, or the Credit
Documents without the prior written consent of Banks. Each of the Banks may
transfer its rights under this Second Amendment, the First Amendment, the
Forbearance Agreement, or the Credit Documents to any successor in interest.

         15. Default. The failure of Borrower to comply with any provision of
this Second Amendment or the failure of Borrower to comply with the terms and
conditions of the Credit Documents, the Forbearance Agreement, or the First
Amendment (other than the Identified Defaults) shall constitute an Event of
Default and shall entitle Banks to exercise any and all of their rights and
remedies under the Credit Documents, the Forbearance Agreement, the First
Amendment, and this Second Amendment.

         16. No Waiver. No failure to exercise, and no delay in exercising any
right, power or remedy under any of the Credit Documents, the Forbearance
Agreement, the First Amendment, or this Second Amendment shall impair any right,
power or remedy that Banks may have, nor shall such delay be construed to be a
waiver of any of such rights, powers or remedies. No waiver of any default or
breach of Borrower shall be a waiver of any other default or breach or of any
default or breach subsequently occurring. Banks shall not be deemed to have
waived any right, power, or remedy except in writing signed by an officer of
Banks expressly stating that it is a waiver of same right, power or remedy.

         17. No Consent. Except as specifically provided in this Second
Amendment, no express or implied consent to any further forbearance or
modifications involving any of the matters set forth in this Second Amendment or
otherwise shall be inferred or implied by Banks' execution of this Second
Amendment or any other action of Banks. Banks' execution of this Second
Amendment shall not constitute a waiver, either express or implied, of the
requirement that any further forbearance or modification of the Credit
Documents, the Forbearance Agreement, or the First

                                 Page 9 of 13
<PAGE>   10
Amendment shall require the express written approval of Banks. Each of the Banks
must provide any consent required from the Banks under this Second Amendment.

         18. Cumulative Remedies. The rights and remedies of Banks under this
Second Amendment, the First Amendment, the Forbearance Agreement, and the Credit
Documents are cumulative and not exclusive of any rights or remedies that Banks
would otherwise have, and may be pursued at any time and from time to time and
in such order as Banks shall determine in their sole discretion.

         19. Mutual Agreement. The parties hereto agree that the terms and
provisions of this Second Amendment embody their mutual intent and that such
terms and provisions are not to be construed more liberally in favor, or more
strictly against, any party. This Second Amendment shall not be construed as if
it had been prepared by one of the parties, but rather as if it had been
prepared by all of the parties.

         20. Time is of the Essence. Time is of the essence of this Second
Amendment, the First Amendment, the Forbearance Agreement, and the Credit
Documents.

         21. Headings. Section headings are for reference only and shall not
affect the interpretation or meaning of any provisions of this Second Amendment.

         22. Further Performance. Borrower, whenever and as often as shall be
requested by the Banks, shall execute, acknowledge, and deliver, or cause to be
executed, acknowledged, and delivered such further instruments and documents and
to do any and all things as may be requested by Banks in order to carry out the
intent and purpose of this Second Amendment, the First Amendment, the
Forbearance Agreement, and the Credit Documents.

         23. Survival. The representations, warranties, acknowledgments, and
agreements set forth herein shall survive the termination of this Second
Amendment.

         24. Binding Effect. This Second Amendment shall be binding upon and
inure to the benefit of Banks, Borrower, and their respective successors and
assigns.

         IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed on the dates set forth below to be effective as of the
day and year set forth above.

                            SIGNATURE PAGE TO FOLLOW

                                 Page 10 of 13
<PAGE>   11
                           "BANKS"

                           BANK ONE, ARIZONA, NA,

Dated: April 11, 2001                        By:  /s/ Bonnie D. Wilson
                                             Name: Bonnie D. Wilson
                                             Title: 1st Vice President

                           FLEET NATIONAL BANK

Dated: April 11, 2001                        By:/s/ Jeffrey Robinson
                                             Name: Jeffrey Robinson
                                             Title: Senior Vice President

                           IMPERIAL BANK

Dated: April 19, 2001                        By: /s/ Craig Hoskin
                                             Name: Craig Hoskin
                                             Title: Senior Vice President

                                 Page 11 of 13
<PAGE>   12
                                  "BORROWER"

                                  HYPERCOM CORPORATION, a Delaware corporation

Dated: April 11, 2001             By: /s/ Jonathon E. Killmer
                                  Name: Jonathon E. Killmer
                                  Title: Executive Vice President and COO

                                  Dated: April 11, 2001

                                  GOLDEN EAGLE LEASING, INC., f/k/a Hypercom
                                  Financial, Inc. (Arizona), an Arizona
                                  corporation

Dated: April 11, 2001

HYPERCOM U.S.A., INC.,
a Delaware corporation

By: /s/ Jonathon E. Killmer
Name: Jonathon E. Killmer
Title: Secretary

                                  By: /s/ Jonathon E. Killmer
                                  Name: Jonathon E. Killmer
                                  Title: President

                                  Dated: April 11, 2001
                                  HORIZON, INC., a Missouri corporation

                                  By: /s/ Jonathon E. Killmer
                                  Name: Jonathon E. Killmer
                                  Title: Secretary

Dated: April 11, 2001

                                  HYPERCOM INC., a/k/a Hypercom (Arizona),
                                  Inc.,  an Arizona corporation

                                  By: /s/ Jonathon E. Killmer
                                  Name: Jonathon E. Killmer
                                  Title: Secretary
                                  Dated: April 11, 2001
                                  HYPERCOM TRANSACTION NETWORK, INC.
                                  (Arizona), an Arizona corporation

                                  Page 12 of 13
<PAGE>   13
By:  /s/ Jonathon E. Killmer
Name: Jonathon E. Killmer
                                   Title: Jonathon E. Killmer

                                   (Arizona) an Arizona corporation

                                   By: /s/ Jonathon E. Killmer
                                   Name: Jonathon E. Killmer
                                   Title: Secretary

                                   Dated: April 11, 2001
                                   ePICNETZ, INC., a Nevada corporation

Dated: April 11, 2001
HYPERCOM MANUFACTURING             By: /s/ Jonathon E. Killmer
RESOURCES, INC.(Arizona), an       Name: Jonathon E. Killmer
Arizona corporation                Title: Secretary

                                   Dated: April 11, 2001
By: /s/ Jonathon E. Killmer        HYPERCOM EUROPE LIMITED, INC.
Name: Jonathon E. Killmer          (Arizona)
Title: Secretary

                                   By: /s/ Jonathon E. Killmer
                                   Name: Jonathon E. Killmer
Dated: April 11, 2001              Title: Secretary
HYPERCOM LATINO AMERICA, INC.

                                 Page 13 of 13Exclusive Recording Artist Agreement
                      ------------------------------------

         This  Agreement  is made as of the  25th  day of  October,  2000 by and
between  PARALLAX  ENTERTAINMENT,   INC.  (hereinafter  "Parallax")  and  Joseph
Donnelly,  Josh Sweley,  and Kyle Van Vleet, both individually and jointly,  and
p/k/a "Track 10" or "Track Ten" (hereinafter "Artist").

1. ARTIST'S WARRANTIES AND REPRESENTATIONS

         1.01.  Artist  represents  and  warrants  that:  (a) it is  authorized,
empowered  and able to enter into and fully perform its  obligations  under this
Agreement;  (b) neither this Agreement nor the fulfillment  thereof by any party
infringes upon the rights of any other person or entity; (c) it has not and will
not do anything that impairs Parallax's rights under this Agreement, nor will it
permit any other  person or entity to do so; and (d) Artist is  resident  in the
United States of America for income tax purposes.

         1.02. Artist further  represents and warrants that: (a) there now exist
no prior recorded performances by Artist other than those listed on the attached
Exhibit  A; (b) that it owns all of the rights in and to the  Masters  listed on
Exhibit A and that no recordings  from those Masters will be released during the
term hereof;  (c) none of the Masters  delivered to Parallax by Artist,  nor the
performances  embodied thereon, nor any other Materials,  nor any use thereof by
Parallax or its  grantees,  licensees or assigns,  will violate or infringe upon
the rights of any third party. "Materials," as used in this Paragraph, means all
Controlled Compositions,  each name used by Artist, any logo used by Artist, and
all other  musical,  artistic,  literary  and other  materials,  ideas and other
intellectual  properties  furnished by Artist or any other  producer  engaged by
Artist and contained or used in connection with any Masters made  hereunder,  or
the packaging, sale, advertising or other exploitation thereof.

2. TERM AND RECORDING COMMITMENT

         2.01.  The  Term of  this  Agreement  shall  be for an  Initial  Period
commencing on the date hereof and expiring nine months thereafter.

         2.02.   Artist  hereby  grants  to  Parallax  three  (3)  separate  and
irrevocable  options to extend the Term of this  Agreement  for further  periods
(the "Option Periods") commencing immediately upon the expiration of the Initial
Period and expiring one year after delivery to Parallax of the Minimum Recording
Commitment  for said Option  Period.  Each option  shall be exercised by written
notice  from  Parallax  to  Artist  postmarked  or  delivered  before  upon  the
expiration of the prior term;  provided  that,  Parallax shall have a thirty day
right to cure any inadvertent failure to exercise such option.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 1

<PAGE>

         2.03.  During the Term of this  Agreement (as the same may be extended)
Artist agrees to produce and Artist shall deliver to Parallax Masters comprising
sound alone  sufficient  to  comprise  the  following  (the  "Minimum  Recording
Commitment"):

      (a) during the Initial Period-- one (1) Album (the "First Album")

      (b) during the First Option Period--one (1) Album (the "Second Album")

      (c) during the Second Option Period--one (1) Album (the "Third Album")

      (d) during the Third Option Period--one (1) Album (the "Fourth Album")

          2.04. Notwithstanding anything else herein to the contrary:

     (a) Each Album shall be delivered to Parallax  within four (4) months after
the  commencement of the applicable  Initial Period or Option Period.  The Album
currently  being  recorded by the Artist  shall,  when  delivered,  count as the
Minimum Recording Commitment for the Initial Period.

     (b) Artist shall not commence the recording of any Album hereunder  earlier
than three (3) months following delivery to Parallax of the prior album.

     (c) Parallax shall not be obliged to accept delivery of any Album hereunder
earlier  than one year  following  the date of delivery to Parallax of the prior
album.  If any such  premature  delivery is tendered,  the  contractual  date of
delivery  hereunder  of such  Album  shall  be  deemed  to be the  date one year
following the date of delivery of the prior album, provided that the prior album
has  been  recorded  and  delivered  in all  respects  in  accordance  with  the
provisions  of  this  Agreement  and  comprises  acceptable  Masters  as  herein
provided.

     (d) In the event  that,  during the Initial  Period or the Option  Periods,
Artist produces more than the Minimum  Recording  Commitment,  Parallax shall at
its sole option be entitled to treat such additional material (or some of it) as
counting towards the Minimum  Recording  Commitment (or not) but said additional
material shall be and remain the sole and exclusive property of Parallax subject
to the provisions of this Agreement.

     (e) Each Album  delivered  shall  consist of not less than ten (10) Masters
and not less than  forty-five  (45) nor more than  seventy-four  (74) minutes of
Artist's  performances.  Each Master shall  consist of not less than two minutes
and thirty  seconds of Artist's  performances.  No album  consisting of Artist's
"live"  performances  shall be deemed to be in  fulfillment  of any of  Artist's
obligations  hereunder  except that upon  mutual  consent,  in  writing,  a live
recording  may  be  accepted  in  fulfillment  of  Artist's  Minimum   Recording
Commitment.  If any such  performances  are  recorded  during  the Term  hereof,
Parallax  shall be the owner  thereof  and shall have the right to exploit  same
under the same terms as  contained  herein for the First  Album,  except that no
advance will be paid to Artist.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 2

<PAGE>

No Multiple Albums shall be delivered hereunder without Parallax's prior written
consent;  any such Multiple Album delivered to and accepted by Parallax shall be
deemed a single Album for all purposes hereof.  No Mini-Album shall form part of
the Minimum Recording  Commitment unless expressly agreed in writing by Parallax
at its absolute discretion.

     (f) Artist shall deliver to Parallax each Master hereunder in the form of a
digital  twotrack  stereo  tape  master,  as well as  reference  discs which are
representative of such tape masters.  Artist shall also deliver at the same time
any multi-track  master tapes recorded in connection with the same project.  The
two-track  stereo  master  tape  shall be fully  edited,  mixed,  equalized  and
leadered for the production of parts from which satisfactory  Phonograph Records
can be manufactured.

     (g) As used in this  Agreement,  "delivery"  shall mean the  receipt of all
tape masters as provided herein,  as well as Artist's  submission to Parallax in
written form of all necessary  information,  consents,  licenses and permissions
that Parallax  requires to  manufacture,  distribute  and release the Masters as
Phonograph Records, including, but not limited to, mechanical licenses, credits,
musician and producer releases,  and any information required to be delivered to
unions or other  third  parties.  Payment of funds due at  delivery  by Parallax
shall not be deemed a waiver of information or documents required hereunder.

     (h)  Artist  shall be  available  to  Parallax  and shall  perform  for the
purposes of making such music videos at such times and places as Parallax  shall
reasonably  agree with  Artist.  The cost of making such music  videos  shall be
deemed advances  hereunder and shall be fifty percent (50%)  recoupable from all
sources, excluding Mechanical Royalties, payable to Artist hereunder.

3. GRANT OF RIGHTS

         3.01.  During  the Term of this  Agreement,  Artist  shall  furnish  to
Parallax its exclusive recording services throughout the Universe.  Any contract
entered  into by Artist or on  Artist's  behalf  during  the Term  hereof or any
extensions  thereof for Artist's  performances in television or radio broadcasts
or motion pictures or stage productions shall specifically  exclude the right to
use any recording of such performance for the manufacture and sale of Phonograph
Records or music videos  unless  previously  authorized  in writing by Parallax.
Artist shall promptly deliver to Parallax copies of the pertinent  provisions of
each such  contract  and  Artist  will  cooperate  fully  with  Parallax  in any
controversy  dispute or litigation  which may arise in relation to the rights of
Parallax under this Paragraph.

         3.02.  Artist hereby grants and assigns to Parallax all rights of every
kind and the complete,  unconditional,  exclusive, perpetual, unencumbered title
throughout the Universe in and to all results and products of Artist's  services
and  performances  hereunder,  any  and  all  Masters,   records,  tapes,  sound
recordings,  music videos,  long form videos,  and other  material of every kind
made or authorized by Parallax hereunder or otherwise produced during the Option
Terms and which  include the voice,  instrumental  or other sound and/or  visual
effects,  services, or performances of Artist,  including without limitation the
right  to  record,  reproduce,  broadcast,  transmit,  publish,  sell,  exhibit,
distribute,  advertise,  exploit,  perform,  and use the same  separately  or in
combination  with any other  material  for any purpose in any manner,  under any
label,  trademark,  or other identification and by any means or method,  whether
known or not now known, invented, used, or contemplated, and to refrain from all
or any part thereof.

EXCLUSIVE RECORDING ARTIST AGREEMENT-PAGE 3

<PAGE>

         3.03.  Without in any way limiting  the  generality  of the  foregoing,
Artist hereby grants to Parallax the following  rights  throughout  the Universe
which  Parallax  may use or refrain from using as it elects in  Parallax's  sole
discretion:

     (a) the exclusive right during the Term hereof to manufacture,  distribute,
and  sell  anywhere  in  the  Universe   Phonograph  Records  and  music  videos
reproducing Artist's performances;

     (b) the exclusive  right for the full periods of copyright to  manufacture,
distribute, and sell throughout the Universe Phonograph Records and music videos
produced from Masters made during the Option Terms hereunder;

     (c) the exclusive right in all media and forms to advertise, publicize, and
exploit  anywhere in the Universe  Phonograph  Records and music videos produced
during the Option  Terms  hereunder by any and every  means,  particularly,  but
without limiting the generality of the foregoing, to use the name, including the
professional  name,   approved  photograph  and/or  likeness  of,  and  approved
biographical  material  concerning  Artist  for  advertising,  publicizing,  and
otherwise exploiting said Phonograph Records and music videos, said approval not
to be unreasonably withheld;

     (d) the exclusive right to authorize public performances in the Universe of
Phonograph Records and music videos produced during the Option Terms hereunder;

     (e) the right to permit  and  authorize  others to  exercise,  directly  or
through persons designated by them, any and all of Parallax's rights hereunder.

         3.04. (a) Each Master (including all sound recordings embodied thereon)
produced  hereunder or embodying  Artist's  performances and recorded during the
Initial Term shall belong to Artist.  Artist grants Parallax a security interest
in and to its  copyright  in the First  Album to secure  recoupment  of all sums
expended by Parallax in the recording and promotion of all Albums recorded under
this  agreement.  Artist  further  agrees to  execute  any  document  reasonably
necessary  to perfect  such  security  interest.  In the event  Artist  fails to
execute any such documents or instruments  Artist hereby  irrevocably  grants to
Parallax  power of  attorney,  coupled  with an  interest,  to execute  all such
security agreements.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 4

<PAGE>

     (b) Each Master (including all sound recordings  embodied thereon) produced
hereunder  or embodying  Artist's  performances  and recorded  during the Option
Terms shall, from the inception of its creation,  be considered a "work made for
hire" for  Parallax  within the  meaning  of the U.S.  Copyright  Law.  If it is
determined  that a Master does not so qualify,  then such Master,  together with
all rights in it (including the sound recording copyright), shall be deemed, and
are hereby transferred and assigned to Parallax by this Agreement. Artist agrees
to execute and deliver to Parallax any and all  documents or  instruments  which
Parallax may request in order to confirm Parallax's  acquisition and/or title to
the Masters  (including the copyright) as described  herein. In the event Artist
fails to execute any such  documents or  instruments  Artist hereby  irrevocably
grants to Parallax power of attorney,  coupled with an interest,  to execute all
such documents of conveyance.  All Masters recorded by Artist from the inception
of the recording thereof and all reproductions derived therefrom,  together with
the performances embodied thereon, shall be entirely the property of Parallax in
perpetuity,  throughout the Universe,  free of any claim whatsoever by Artist or
any persons deriving any rights or interests  therefrom.  3.05. Artist shall not
authorize or permit Artist's performances to be recorded for any purpose without
obtaining  an express  written  approval  of  Parallax,  and  Artist  shall take
reasonable  measures  to  prevent  the  manufacture,  distribution  and  sale of
Phonograph  Records or music videos  containing its performances (and the use of
Artist's  name and  likeness in  connection  therewith)  by any person or entity
other than Parallax, its successors, licensees and assigns.

         3.06.  Artist grants  Parallax the right to include any Master produced
and delivered  hereunder in a soundtrack or compilation  album, at any time, and
without any further advance,  except that royalties shall be payable as provided
herein.

         3.07. As used in this Agreement, "Phonograph Records" shall include any
and  all  mechanical   reproductions  of  the  Masters  produced  and  delivered
hereunder,  in any  format,  whether  now known or  unknown,  including  but not
limited to compact discs, cassette tapes, vinyl records, DAT tapes or any future
format.

4. RECORDING COSTS AND PROCEDURES

         4.01.  Advances  payable to Artist  pursuant to this  Agreement are and
shall be  inclusive  of all  costs  incurred  in the  course  of  producing  and
recording Masters hereunder  (including without limitation,  the costs of studio
time, musician fees, union payments,  instrument hire,  producer's fees, and the
cost of tape  editing,  mixing,  remixing  and  mastering,  advances,  and other
similar costs  customarily  regarded in the industry as being recording  costs).
All such costs are sometimes  herein referred to as "recording  costs" and shall
constitute advances recoupable from royalties payable hereunder. Parallax shall,
in accordance  with the provisions of this  Agreement,  deduct and retain out of
said advances such sums as may be necessary to pay the said recording  costs. In
the event  that,  as a result of an event  within the  control of the Artist but
unapproved  by  Parallax,  any  recording  costs shall  exceed the amount of the
recording fund specifically referred to in

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 5

<PAGE>

Paragraph  5.01  below,  then the  excess  costs  shall  (if  paid by  Parallax)
constitute  a loan  to  Artist  payable  on  demand  and  without  prejudice  to
Parallax's  other  rights  and  the  same  shall,  at  Parallax's  election,  be
recoverable  by Parallax  out of any monies  payable by Parallax to Artist or on
Artist's  behalf  hereunder.  Any recording  cost that exceeds the amount of the
recording fund  specifically  referred to in Paragraph 5.01 below, but which has
been  approved by  Parallax,  shall be treated as an increase in said  recording
fund.

         4.02.  Parallax  and Artist  shall,  prior to the  commencement  of any
recording:  (a) mutually designate the producer(s) of all Masters hereunder; and
(b) agree on a budget  for  recording  costs.  Parallax  shall not  unreasonably
withhold its consent to any budget for recording  costs that is less than ninety
percent  (90%) of the  recording  fund for that album as  specified in Paragraph
5.01.  Parallax  has  previously  approved  the budgets for the First and Second
Albums.

         4.03. Artist shall be properly  rehearsed and shall appear at the times
and places designated by Parallax after  consultation with and reasonable notice
to Artist from time to time for all recording sessions required hereunder and at
each session  Artist shall  tender  their  professional  services to the best of
their ability.  Parallax and Artist shall mutually  designate the material to be
recorded and each Master shall be subject to Parallax's  approval as technically
and commercially  satisfactory.  Upon Parallax's request, Artist shall re-record
any material until a Master,  which in Parallax's sole judgment is satisfactory,
shall have been obtained.

         4.04. The Masters  delivered to Parallax by Artist under this Agreement
and the  performances  embodied therein shall be produced in accordance with the
rules and  regulations  of the American  Federation of  Musicians,  the American
Federation  of  Television  and  Radio  Artists  and  all  other  unions  having
jurisdiction.  Artist is or will become and remain,  to the extent  necessary to
fulfill this Agreement,  a member in good standing of all labor unions or guilds
in which  membership may be required for the  performance  of Artist's  services
hereunder.

         4.05. Artist shall not perform for or in connection with (and shall not
permit any other person or entity to use Artist's name or likeness in connection
with) the  recording or  exploitation  of any  Phonograph  Record  embodying any
Composition  recorded by Artist  under this  Agreement  prior to a date five (5)
years subsequent to the expiration or termination of the term of this Agreement,
or any extensions thereof.

         4.06. Without limiting the foregoing, Parallax shall not be required to
make any  payments  of any kind for, or in  connection  with,  the  acquisition,
exercise or exploitation  of rights by Parallax except as specifically  provided
in this Agreement.  Artist shall be solely responsible for all sums due to labor
unions or  guilds,  individual  musicians,  producers  and all other  persons or
entities  entitled to receive royalties or other payments in connection with the
sale of Phonograph  Records derived from Masters  hereunder,  although  Parallax
will  undertake to make all such  payments to the extent of the  recording  fund
specified in Paragraph  5.01, and Artist's  liability to producers for royalties
shall  be  limited  to  two  percent  of  retail.  None  of  the  persons  whose
performances are embodied in the Masters or whose services are used in recording
the  Masters  shall  be  bound  by  any  agreement   that  would  restrict  such
performances  or  services,  or to  the  extent  they  are  otherwise  bound  or
restricted, Artist shall obtain all necessary clearances in writing.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 6

<PAGE>

5. ADVANCES AND RECORDING FUND

         5.01.  As  advances  against  and  recoupable  from  royalties  payable
hereunder,  Parallax agrees to pay with respect to each Album  constituting  the
Minimum  Recording  Commitment  hereunder a sum equal to the amount by which the
applicable sum set forth below ("Album  Recording  Fund") exceeds the sum of the
documented  receipts for the recording  costs  concerned and any other  advances
made to Artist prior to delivery of the applicable Album:

 Album Recording Fund:              First Album         $15,000
                                   Second Album         $20,000
                                    Third Album         $35,000
                                   Fourth Album         $75,000

         5.02. If net sales through normal retail  channels in the United States
for which  royalties are payable  pursuant to Paragraph  6.01 (a) below,  net of
applicable  reserves of any album shall exceed  seventy-five  thousand  (75,000)
units as of the date nine (9) months after the initial  release of that album in
the United States,  then the Album Recording Fund on the next  subsequent  album
shall be increased by Ten Thousand Dollars ($10,000).

         5.03. The advances due under  Paragraph 5.01 shall be payable  promptly
following the delivery to Parallax of: (a) the Minimum Recording Commitment; (b)
the documents required under Paragraph 2.04(g);  and (c) all invoices pertaining
to the recording of the Minimum Recording  Commitment.  With respect to payments
to be made  following  delivery.  Parallax  shall have the right to withhold ten
percent (10%) for ninety (90) days to provide for  anticipated  costs which have
not yet been paid.

         5.04.  All  advances  paid to Artist  or on  Artist's  behalf  shall be
recoupable against the royalties payable under this Agreement, from whatever the
source,  except  that  advances  shall  not  be  recoupable  against  Mechanical
Royalties except as provided for in Paragraph 8.01.

6. ROYALTIES

         6.01. Subject to Artist's  compliance with all obligations  required of
Artist hereunder and subject as otherwise  granted herein,  Parallax will pay to
Artist for the rights  granted herein and for the services  performed  hereunder
the royalties set out below,  being percentages of one hundred percent (100%) of
the Parallax's published wholesale price, exclusive of taxes and duties actually
paid by Parallax,  and the container cost  deductions  specified  below for. all
records and music  videos  manufactured,  sold and not  returned,  and for which
Parallax is paid, reproducing exclusively Masters recorded hereunder, namely:

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 7

<PAGE>

     (a) With respect to sales for  distribution  in the United States of Albums
reproducing exclusively Masters hereunder: Twenty percent (20%).

     (b) The  royalty  rate with  respect  to 12-inch  singles  shall be fifteen
percent (15%).

     (c) The royalty rate with respect of 7-inch singles and other records shall
be twelve percent (12%).

     (d) The royalty  rate with  respect to the  following  is thirteen  percent
(13%):  records sold to any  government  body,  PX sales,  sales to  educational
institutions,  record clubs,  soundtrack records,  compilation  records,  budget
records  (defined  as a record  which is sold at a  wholesale  price of at least
fifty  percent but less than eighty  percent of Parallax's  published  wholesale
price),  and EP records  (defined as records  containing  between three and nine
Masters);  except that the royalty rate for compilations released exclusively on
the Parallax label shall be twenty percent (20%).  Royalties for soundtracks and
compilations on which Artist appears with other performers shall be pro-rated in
the same proportion that Artist's Master(s) bear to the entire album.

     (e) Foreign royalty rate: The rate for the records manufactured by Parallax
or  Parallax's  affiliates  and sold outside the United States will be sixty-six
and  two-thirds  percent  (66 2/3%) of the  applicable  royalty  except that the
royalty rate for masters licensed by Parallax outside the United States shall be
fifty  percent  (50%) of the net income  therefrom.  Net  income  shall mean all
income  received  less  third  party out of pocket  expenses  to  establish  the
license,  third party out of pocket collection costs, foreign currency exchange,
wire transfer fees and applicable taxes.

     (f)  Royalty  rate for  music  videos  sold and not  returned  shall be ten
percent (10%) of Parallax's published wholesale price.

 7. ROYALTY PAYMENTS

         7.01.  Royalties  earned  hereunder will be accrued  semi-annually  and
paid, less all advances,  taxes,  and any other charges,  within sixty (60) days
following  each June 30th and  December  31 st for the  preceding  six (6) month
period, in accordance with Parallax's  regular  accounting  practices.  Parallax
shall,  however, have the right to establish reasonable reserves for returns and
exchanges,  said  reserves  not to exceed  thirty  percent  (30%).  Each reserve
established   hereunder  shall  be  liquidated  at  the  end  of  the  following
semi-annual  period.  If Parallax makes any  overpayment of royalties  (e.g., by
reason of an accounting  error or paying  royalties on Records  returned later),
Parallax shall have the right to offset such overpayment  against any subsequent
payment due to Artist from Parallax.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 8

<PAGE>

         7.02.  Each  royalty  payment  hereunder  shall  be  accompanied  by  a
statement in accordance  with  Parallax's  regular  accounting  practices.  Said
statements shall be provided to Artist within sixty (60) days of the end of each
calendar quarter,  even though royalty payments are semi-annual.  Each statement
shall  become  binding  upon Artist and Artist  shall  neither have nor make any
claim  against  Parallax  with respect to such  statement,  unless  Artist shall
advise Parallax,  in writing, of the specific basis of such claim within one (1)
year after the date Parallax mails such statement.  Parallax's  accounting books
and records will be kept and maintained in accordance  with  generally  accepted
accounting principles, consistently applied.

         7.03.  Artist shall not be entitled to recover  damages or to terminate
this  Agreement  for any reason  because of a claimed  breach by Parallax of its
material obligations hereunder, unless Parallax has failed to remedy such breach
within sixty (60) days following receipt of written notice thereof.  Artist will
not have the right to sue Parallax in connection with any royalty accounting, or
sue  Parallax  for  royalties  accrued  by Artist  during  the  period a royalty
accounting  covers,  unless Artist commences the suit within two (2) years after
the date when the  statement  in  question  is  rendered  to  Artist.  If Artist
commences  suit on any  controversy  or  claim  concerning  royalty  accountings
rendered to Artist under this  Agreement,  the scope of the  proceeding  will be
limited to the  determination  of the amount of royalties due for the accounting
periods  covered  and  reasonable  attorney  fees,  and the  court  will have no
authority to consider any other  issues or award any relief  except  recovery of
any  royalties  found  owing.  Artist's  recovery  of  any  such  royalties  and
attorney's  fees  will be the sole  remedy  available  to  Artist  by  reason of
Parallax's royalty accountings. Without limiting the generality of the preceding
sentence,  Artist will not have any right to seek  termination of this Agreement
or avoid the  performance  of their  obligations  under it by reason of any such
claim. Artist's remedy for Parallax's willful refusal to permit it to record its
Minimum Recording Commitment shall be limited to termination of this Agreement.

         7.04.  Parallax  agrees that Artist may,  not more than once during any
calendar year, but only once with respect to any statement  rendered  hereunder,
audit its books and  records  for the  purpose of  determining  the  accuracy of
Parallax's  statements  to Artist.  If Artist  wishes to perform any such audit,
Artist will be required to notify  Parallax at least thirty (30) days before the
date when Artist plans to begin the audit plans to begin the audit.  If Artist's
audit has not been  completed  within one (1) month from the time Artist  begins
it,  Parallax  may require  Artist to  terminate  it on seven (7) days notice to
Artist and  Parallax  will not be  required  to permit  Artist to  continue  the
examination  after the end of that  seven (7) day  period.  Artist  shall not be
entitled to examine any manufacturing  records or any other records which do not
specifically  report  sales of Records or  calculation  of net receipts on which
royalties  are  accruable  hereunder.  All audits  shall be made during  regular
business  hours,  and shall be  conducted on Artist's  behalf by an  independent
Certified Public  Accountant.  Each  examination  shall be made at Artist's sole
expense at Parallax's regular place of business in the United States,  where the
books and records are maintained.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 9

<PAGE>

8. MECHANICAL LICENSES AND ROYALTIES

         8.01.  All  Controlled  Compositions  (defined as musical  compositions
composed  in whole or in part by any  individual  member of  Artist)  are hereby
licensed to Parallax and its licensees for  reproduction  on Phonograph  Records
anywhere in the Universe.  Royalties for the  mechanical  license herein granted
shall be at a rate equal to  seventy-five  percent (75%) of the current  minimum
U.S.  statutory  rate  (including  the "long  work"  rate,  if  applicable)  for
royalty-bearing  records sold and not  returned and for which  Parallax is paid,
excluding  any  instance  where  Parallax  and Artist are sharing  income  under
Paragraph  6.01(e)  above.  In no event shall the mechanical  royalties  payable
hereunder  for any Album  exceed  ten (10) times the rate set forth  above.  The
foregoing also applies to music videos,  as well as to any instance where such a
license  must be executed in favor of Parallax,  Parallax  shall not recoup from
mechanical  royalties due to Artist any advances  payable to Artist except:  (a)
excess  recording costs under Paragraph 4.01; (b)  overpayments  under Paragraph
7.01;  and (c) any  advances  of cash or  consigned  materials  (or the like) to
Artist.

         8.02.  If any record  contains one or more  compositions  which are not
Controlled Compositions,  then Parallax will have the right to reduce the amount
of Mechanical  Royalties  payable on the  Controlled  Compositions  by an amount
equal  to  the  amount  of  mechanical   royalties   payable  on  non-Controlled
Compositions.

9. TRADEMARKS

         9.01.  Artist shall perform under the professional  name, "Track 10" or
"Track Ten." Artist  warrants and  represents  that it is the sole owner of such
name in connection with Phonograph Records during the term hereof.  Artist shall
not use a different name in connection with Phonograph Records unless Artist and
Parallax  mutually  agree in writing.  Artist  agrees that  Parallax may cause a
search to be instituted for the purpose of determining  whether any professional
name used by Artist has been or is being used by  another  person in  connection
with Phonograph Records. Parallax may cause one or more federal applications for
trademark  protection to be made in favor of Artist for Phonograph Record and/or
entertainment  purposes.  Any amounts up to One Thousand  Seven Hundred  Dollars
($1,700.00)  expended by Parallax  pursuant  to this  Paragraph  shall be deemed
Advances hereunder.  If the trademark search indicates that such name should not
be used,  Parallax and Artist  shall  mutually  agree on a  substitute  name for
Artist.  Nothing contained herein shall release Artist from its  indemnification
of Parallax with respect to Artist's use of such name.

10. FREE GOODS

         10.01. No royalties shall be payable with respect to records given away
or furnished on a "no charge"  basis to one-stops,  rack jobbers,  distributors,
dealers,  radio  stations,  television  stations or film  companies,  theatrical
hooking agencies,  print media, music publishers or the like, provided that such
records do not exceed one hundred (100) non-royalty bearing Singles out of every
one thousand  (1,000)  Singles  distributed  and one hundred  (100)  non-royalty
bearing  Albums out of every one thousand  (1,000)  Albums.  Any record sold for
less than fifty percent (50%) of Parallax's  published wholesale price will be a
non-royalty bearing record.

EXCLUSIVE RECORDING ARTIST AGREEMENT -PAGE 10

<PAGE>

         10.02. During each applicable  contract period,  Parallax shall provide
Artist with fifteen (15)  non-royalty  bearing  copies of Artist's  then current
Album at no charge to the Artist.

11. CONTAINER COSTS

         11.01.  Parallax's  container  deduction  shall be a sum equal to:  one
dollar  ($1.00)  for  singles,  one dollar and fifty  cents  ($1.50) for LPs and
cassettes,  two  dollars  ($2.00) for double LP sets and  compact  discs,  three
dollars  ($3.00)  for  double  cassettes,  and four  dollars  ($4.00)  for other
formats, including double compact disks, and all video formats.

12. INDEMNIFICATION

         12.01.  Artist  agrees  to and  does  hereby  indemnify,  save and hold
Parallax and its  licensees  harmless of and from any and all  liability,  loss,
damage,  cost, or expense (including all legal expenses and reasonable  attorney
fees) arising out of or connected with any breach of this Agreement or any claim
which is  inconsistent  with any of the  warranties or  representations  made by
Artist in this Agreement,  and Artist agrees to reimburse Parallax on demand for
any payment made or incurred by Parallax  with  respect to the  foregoing if the
claim concerned is settled or has resulted in a final judgment  against Parallax
or its licensees.  Pending the  determination of any claim with respect to which
Parallax is entitled to indemnity,  Parallax may withhold  monies which would be
otherwise payable to Artist up to the amount of its potential liability.

13. DEFAULT AND TERMINATION

         13.01.  In  the  event  of any  default  or  breach  by  Artist  in the
performance  of any of Artist's  obligations  hereunder,  Parallax may,  without
prejudice  to its other  rights,  claims or  remedies,  suspend its  obligations
hereunder for the duration of such default or breach and until the same has been
cured and may, at its option,  extend the Term for a period  equal to all or any
part of the period of such  default  or breach,  and in such event the dates for
the  exercise  by  Parallax  of the Option  Periods  hereunder  and the dates of
commencement of each subsequent Option Period shall be extended accordingly.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 11

<PAGE>

14. FORCE MA JEUR

         14.01 If  Parallax's  material  performance  hereunder  is  delayed  or
becomes impossible or impractical  because of any act of God, fire,  earthquake,
strike,  act of government or any order,  regulation,  ruling,  or action of any
labor  union or  association  of  artists  affecting  Parallax  or Artist or the
phonograph  record  industry,  Parallax,  upon  notice to Artist may suspend its
obligations under this Agreement for a period not to exceed one (1) year, and in
such event the  number of days  equal to the  number of days of such  suspension
shall be added to the then-current period of the Term thereof. In the event that
Parallax's  material  performance  hereunder is delayed or becomes impossible or
impractical  because of any civil strife,  Parallax,  upon notice to Artist, may
suspend its  obligations  under this  Agreement  for the duration of such delay,
impossibility or impracticability  and in such event the number of days equal to
the number of days of such suspension shall be added to the then-current  period
of the Term thereof.

15. MERCHANDISING

         15.01.   Artist   hereby  grants   Parallax  the  exclusive   right  to
manufacture,  sell, license, distribute and exploit, throughout the Universe and
by mail-order and through retail sources of, without limitation, all merchandise
of every kind  featuring the Artist  (name/logo/likenesses),  during the term of
this Agreement.

         15.02. It is expressly  agreed and understood that any contract for the
purpose of  merchandising  Artist entered into by Parallax during the Term shall
continue in full force and effect in accordance with the provisions  thereof for
a period not to exceed one (1) year following the expiration of the term of this
Agreement.

         15.03.  In the case of any such products or property  manufactured  and
sold by Parallax or by any  associated  company,  Artist  shall be entitled to a
royalty of twenty  percent (20%) of the adjusted gross  receipts  therefrom.  As
used in this paragraph, the term "adjusted gross" shall mean gross revenues from
the sale of applicable  merchandise,  less venue commissions and state sales tax
where collected and actually paid. In the event that Parallax licenses to others
any of its rights under this clause,  then Artist shall  receive  fifty  percent
(50%) of the net receipts  therefrom.  As used in this paragraph,  the term "net
receipts"  shall be calculated as gross revenues from the sale of the applicable
merchandise,  less the  cost  actually  incurred  and  paid by  Parallax  or its
licensing   company  for   manufacturing;   sales   personnel   salaries  and/or
commissions,  venue commissions and state sales tax where collected and actually
paid.

         15.04.  Artist has the right of approval of all merchandising  artwork,
so long as said approval is that unreasonably withheld.  During the Term of this
Agreement,  Artist shall cause the inclusion of Parallax's  logo and proper name
at a reasonable size and position on all merchandise.

         15.05. No royalties shall be payable with respect to merchandise  given
away or furnished on a no-charge basis.  Upon Artist's  request,  Parallax shall
provide  Artist  with twenty  (20)  non-royalty-bearing  samples of each item of
merchandise at no charge.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 12

<PAGE>

16. ARTWORK

         16.01. Artist agrees that Parallax is the owner of any and all artwork,
LP jacket art,  and  promotional  artistic  renderings  undertaken  or completed
within the Option  Terms of this  Agreement.  Artist shall have the right to use
artwork which has been mutually  approved by Parallax and Artist for the purpose
of merchandising.

 17. NOTICES

         17.01. All notices,  demands or the like which are required to be given
hereunder shall be in writing and may be served upon the other party  personally
by Registered Mail, Return Receipt Requested, or by telecopy (facsimile). Notice
to Artist will be received  by:___________________________and notice to Parallax
will be received by: Gust Kepler, Parallax Entertainment,  Inc., 12830 Hillcrest
St., Suite 111, Dallas, Texas 75230.

18. PROMOTIONS AND ADVERTISING CAMPAIGNS

         18.01. Any promotional monies spent by Parallax on behalf of Artist are
fifty  percent  (50%)  recoupable  from  monies  otherwise  due to  Artist  from
Parallax,  excluding  Mechanical  Royalties,  notwithstanding  the  source.  Any
promotional  monies spent on behalf of Artist in combination with other Parallax
Artists shall be recoupable from Artists on a pro-rata basis.

         18.02.  Parallax is not  obligated to produce a  promotional  video for
Artist,  but if Parallax  undertakes  to produce  said video,  the cost is fifty
percent  (50%)  recoupable  from  royalties,   excluding  Mechanical  Royalties,
notwithstanding the source. The cost of producing nonpromotional videos intended
for resale are fully recoupable.

19. CONTROLLING LAW

         19.01. This Agreement is entered into and performable in Dallas County,
Texas and the validity,  interpretation and legal effect of this Agreement shall
be governed by Texas law.  Venue for any legal action shall be in Dallas County,
Texas.

20. REMEDIES

         20.01.  Artist  acknowledges,  recognizes  and agrees that his services
hereunder are of a special,  unique,  unusual,  extraordinary  and  intellectual
character  which  gives  them a  peculiar  value,  the loss of which  cannot  be
reasonably  or  adequately  compensated  for by  damages  in an  action  of law.
Inasmuch as a breach of such services will cause Parallax  irreparable  damages,
Parallax shall be entitled to injunctive and other equitable relief, in addition
to whatever legal remedies are available,  to prevent or cure any such breach or
threatened breach.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 13

<PAGE>

21. HEADINGS

         21.01.  The headings of the clauses herein are intended for convenience
only,  and  shall  not be of any  effect  in  construing  the  contents  of this
Agreement.

22. RELATIONSHIP

         22.01.  Artist has the status of an independent  contractor and nothing
herein  contained  shall  contemplate  or  constitute  Artist or its  members as
Parallax's  agents  or  employees.  This  Agreement  does not and  shall  not be
construed to create a partnership  or joint venture  between the parties to this
Agreement

23. VALIDITY AND MODIFICATIONS

         23.01.  The invalidity or  unenforceability  of any provision shall not
affect the validity or  enforceability  of any other  provision.  This Agreement
contains the entire understanding of the parties relating to its subject matter.
No change of this  Agreement will he binding unless signed by all parties hereto
or their  duly  authorized  representatives.  A waiver  by  either  party of any
provision of this  Agreement in any instance shall not be deemed to waive it for
the future. All remedies, rights, undertakings and obligations contained in this
Agreement  shall be  cumulative  and none of them shall limit any other  remedy,
right, undertaking or obligation.

24. ASSIGNMENT

         24.01.  Parallax may assign its rights under this Agreement in whole or
in part.

25. LEGAL REPRESENTATION

         25.01.  Artist, by their signature  hereto,  confirms that Parallax has
advised Artist to take  independent  legal counsel,  from a lawyer  specializing
generally in the music business and specifically in the negotiation of recording
agreements, on the terms and conditions of this Agreement and on the obligations
being undertaken by Artist in executing the Agreement.

26. COOPERATION

         26.01.  Artist shall  execute such other  documentation  and shall give
such further  assurances  as may  reasonably  be necessary or desirable  for the
purpose of vesting, confirming, protecting or further assuring any of the rights
granted herein.

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 14

<PAGE>

27. DISCLAIMER

         27.01.   Parallax   has  not  made  and  does  not   hereby   make  any
representation  or warranty with respect to the extent of the sale of records or
the exploitation of music videos hereunder.

SIGNED THIS ________DAY OF AUGUST, 2000.

PARALLAX ENTERTAINMENT, INC.

By:__________________________
    Gust Kepler, President

14110 North Dallas Parkway
Suite 130
Dallas, Texas 75240

ARTIST:

P/k/a _______________________

By:__________________________
Printed name: Joseph Donnelly
SSN: ###-##-####

By:__________________________
Printed/name: Joshua J. Sweley
SSN: 505-04 6073

By:__________________________
Print name : Kyle an Vleet
SSN: ###-##-####

Artist Address: 3612 Commerce St.
               --------------------
                Suite #101
-----------------------------------
                Dallas, TX 75226
-----------------------------------

EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}]]