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 EXHIBIT 10.05 ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 1999


                              EMPLOYMENT AGREEMENT


This Employment Agreement (the "Agreement") is entered into as of February 1,
1999 (the "Effective Date") between AmeriQuest Technologies, Inc., a Delaware
corporation with its principal offices located at 2465 Maryland Road, Willow
Grove, PA 19090 ("Company"), and Michael D. McCarthy, a resident of Georgia
("Employee").

In consideration of the promises and the terms and conditions set forth in this
Agreement, the parties agree as follows:

1.       POSITION. During the term of this Agreement, Company will employ
         Employee, and Employee will serve Company as the Company's Vice
         President, Sales and Marketing and as an Officer of the Company.
         Employee will report directly to the Chief Executive Officer.

2.       DUTIES. Employee will serve Company in such capacities and with such
         duties and responsibilities as the Chief Executive Officer of Company
         may from time to time determine. Employee will be bound by Company'
         operating policies, procedures, and practices from time to time in
         effect during Employee's employment. Employee will perform his duties
         under this Agreement at the offices of Company, provided, that Employee
         may be required to do extensive traveling in connection with the
         performance of his duties hereunder. Employee hereby represents and
         warrants that he is free to enter into and fully perform this Agreement
         and the agreements referred to herein without breach of any agreement
         or contract to which he is a party or by which he is bound.

3.       EXCLUSIVE SERVICE. During his employment with Company, Employee will
         devote his full time and efforts exclusively to this employment and all
         his skill and experience to the performance of his duties and advancing
         of the Company's interests in accordance with Employee's experience and
         skills. In addition, during his employment with Company, Employee will
         not engage in any consulting activity except with the prior written
         approval of the Company or at the direction of Company, and Employee
         will otherwise do nothing inconsistent with the performance of his
         duties hereunder.

4.       OBLIGATION NOT TO COMPETE. Employee hereby agrees that while he is
         employed by Company (the "Restricted Period"), Employee shall within
         the territory of the United States not engage in or provide services to
         any business that is competitive with or detrimental to any present or
         contemplated business of Company known to Employee. Employee also
         agrees that, during the Restricted Period, he shall not in any manner
         attempt to induce or assist others to attempt to induce any customer or
         client of Company to terminate his association with Company, nor do
         anything directly or indirectly to interfere with the relationship
         between Company and any such persons or concerns in the territory of
         the United States. Each of the following activities shall, without
         limitation, be
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Employment Agreement Michael D. McCarthy

         deemed to constitute engaging in business within the meaning of Section
         3 and 4: to engage in, work with, have an interest or concern in,
         advise, lend money to, guarantee the debts or obligations of, or permit
         one's name or any party thereof to be used in connection with, an
         enterprise of endeavor, either individually, in partnership or in
         conjunction with any person or persons, firms, associations, companies
         or corporations, whether as a principal, agent, shareholder, employee,
         officer, director, partner, consultant or in any other manner
         whatsoever; provided, however, that Employee shall retain the right to
         invest in or have an interest in entities traded on any public market
         or offered by any national brokerage house, provided that said interest
         does not exceed ten percent (10%) of the voting control of said entity.
         In addition, Employee may make passive investments in privately held
         entities that are determined by the Board of Directors of Company not
         to be competitors of Company. Company may elect to extend the term of
         this non-competition clause for a maximum period of six months
         following the termination according to Section 8.1. (b) and 8.1. (c)
         provided that a monthly fee in the amount of the last applicable
         monthly base salary is paid to Employee.

5.       TERM OF AGREEMENT. This Agreement will commence on the Effective Date,
         and will continue for a period of twelve (12) months and thereafter
         unless terminated pursuant to Section 8 thereof.

6.       COMPENSATION AND BENEFITS.

         6.1.     BASE SALARY. Company agrees to pay Employee a base salary of
                  $5,769 bi-weekly (or $150,000 annualized). Employee's salary
                  will be payable as earned in accordance with Company'
                  customary payroll practice.

         6.2.     PERFORMANCE BONUS. - Employee will be eligible to earn a bonus
                  of up to $150,000 (the "Performance Bonus") annually during
                  his employment with Company. The performance criteria and
                  terms and conditions relative to the Performance Bonus shall
                  be in accordance with the attached "Incentive Plan"
                  (Attachment 1).

         6.3.     ADDITIONAL BENEFITS. Employee will be eligible to participate
                  in Company's employee benefit plans of general application,
                  including without limitation those plans covering profit
                  sharing, executive bonuses, stock options, and those plans
                  covering life, health, an dental insurance in accordance with
                  the rules established for individual participation in any such
                  plan and applicable law. Employee shall receive such other
                  benefits, including vacation, holidays, and sick leave, as
                  Company generally provides to its employee holding similar
                  positions as that of Employee.

         6.4.     VACATION.  Four (4) weeks.

         6.5.     EXPENSES. Company will reimburse Employee for all reasonable
                  and necessary expenses incurred by Employee in connection with
                  Company's business, provided that such expenses are deductible
                  to Company, are in
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Employment Agreement Michael D. McCarthy

                  accordance with Company's applicable policy and are properly
                  documented and accounted for in accordance with the
                  requirements of the Internal Revenue Service.

7.       PROPRIETARY RIGHTS. Employee hereby agrees to execute an Employee
         Confidentiality Agreement with Company in substantially the form
         attached hereto as Attachment 2.

8.       TERMINATION.

         8.1      EVENTS OF TERMINATION. Employee's employment with the Company
                  shall terminate upon any one of the following:

                  a)       the Company's determination made in good faith that
                           it is terminating Employee for "cause" as defined
                           under Section 8.2 below ("Termination for Cause");

                  b)       six months after the effective date of a written
                           notice sent to Employee stating that Company is
                           terminating his employment, without cause, which
                           notice can be given by Company at any time after the
                           Effective Date at Company's sole discretion, for any
                           reason or for no reason; or

                  c)       six months after the effective date of a written
                           notice sent to Company from Employee stating that
                           Employee is electing to terminate his employment with
                           Company.

                  d)       If a change of control occurs and the employee's
                           responsibilities are reduced within the following
                           twelve (12) months thereafter. This termination on
                           the part of the employee must be effected within six
                           (6) months of the significant reduction in
                           responsibilities. A "change in control" is deemed to
                           have taken place when any of the following events
                           occurs: (1) shareholder approval of a merger or
                           consolidation of the Company with any other
                           corporation resulting in a change in fifty percent
                           (50%) or more of the total voting power of the
                           Company; (2) shareholder approval of a plan of
                           complete liquidation of the Company or an agreement
                           for the sale or disposition of all or substantially
                           all of the Company assets; or (3) any person becomes
                           the beneficial owner of more than fifty percent (50%)
                           of the Company's total outstanding securities); and
                           such reduction in responsibilities is not for cause.
                           Any resignation of employment by Michael D. McCarthy
                           as a consequence of such reduction in
                           responsibilities will be treated as a termination of
                           employment without cause.

         8.2      "CAUSE" DEFINED. For purposes of this Agreement, "cause" for
                  Employee's termination will exist any time after the happening
                  of one or more of the following events;
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Employment Agreement Michael D. McCarthy

                  a)       a failure or refusal to comply in any material
                           respect with the reasonable policies, standards or
                           regulations of the Company;

                  b)       a failure or a refusal in any material respect,
                           faithfully or diligently, to perform his duties
                           determined by the Company in accordance with this
                           Agreement or the customary duties of Employee's
                           employment;

                  c)       unprofessional, unethical or fraudulent conduct or
                           conduct that materially discredits the Company or is
                           materially detrimental to the reputation, character
                           or standing of the Company;

                  d)       dishonest conduct or a deliberate attempt to do an
                           injury to the Company;

                  e)       Employee's material breach of a term of this
                           Agreement;

                  f)       an unlawful or criminal act which would reflect badly
                           on the Company in the Company's reasonable judgment;
                           or

                  g)       employee's death.

9.       EFFECT OF TERMINATION.

         9.1      TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. In the event
                  of any termination of this Agreement pursuant to Sections
                  8.1(a) or 8.1( c), the Company shall pay Employee the
                  compensation and benefits otherwise payable to Employee under
                  Section 6 through the effective date of termination.
                  Employee's rights under the Company's benefit plans of general
                  application shall be determined under the provisions of those
                  plans.

         9.2      TERMINATION WITHOUT CAUSE. In the event of any termination of
                  this Agreement pursuant to Section 8.1(b), the Company shall
                  pay Employee the compensation and benefits according to
                  Section 6 through the last day of the six (6) months period
                  following the effective date that the notice referred to in
                  Section 8.1(b) is given.

         9.3      TERMINATION WITHOUT CAUSE DUE TO CHANGE IN CONTROL. In the
                  event of any termination of this Agreement pursuant to Section
                  8.1(d), the Company shall pay Employee the compensation and
                  benefits according to Section 6 through the last day of the
                  twelve (12) months period following the date that the notice
                  referred to in Section 8.1(d) is given.

10.      MISCELLANEOUS.

         10.1     ARBITRATION. Employee and Company shall submit to mandatory
                  binding arbitration in any controversy or claim arising out
                  of, or relating to, this Agreement or any breach hereof,
                  provided, however, that Company retains its right to, and
                  shall not be prohibited, limited or in any other way
                  restricted from, seeking or obtaining equitable relief from a
                  court having jurisdiction over the parties. Such arbitration
                  shall be conducted in accordance with the commercial
                  arbitration rules of the American Arbitration Association in
                  effect at that time, and judgment upon the determination or
                  award rendered by the arbitrator may be entered in any court
                  having jurisdiction thereof.
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Employment Agreement Michael D. McCarthy

         10.2     SEVERABILITY. If any provision of this Agreement shall be
                  found by any arbitrator or court of competent jurisdiction to
                  be invalid or unenforceable, then the parties hereby waive
                  such provision to the extent that it is found to be invalid or
                  unenforceable and to the extent that do so would not deprive
                  one of the parties of the substantial benefit of its bargain.
                  Such provision shall, to the extent allowable by the law and
                  the preceding sentence be modified by such arbitrator or court
                  so that it becomes enforceable and, as modified, shall be
                  enforced as any other provision hereof, all the other
                  provisions continuing in full force and effect.

         10.3.    REMEDIES. Company and Employee acknowledge that the service to
                  be provided by Employee is of a special, unique, unusual,
                  extraordinary, and intellectual character, which give it
                  peculiar value the loss of which cannot be reasonably or
                  adequately compensated in damages in an action at law.
                  Accordingly, Employee hereby consents and agrees that for any
                  breach or violation by Employee of any of the provisions of
                  this Agreement including, without limitation, Section3, a
                  restraining order and/or injunction may be issued against
                  Employee, in addition to any other rights and remedies Company
                  may have, at law equity, including without limitation the
                  recovery of money damages.

         10.4.    NO WAIVER. The failure by either party at any time to require
                  performance or compliance by the other of any of its
                  obligations or agreements shall in no way affect the right to
                  require such performance or compliance at any time thereafter.
                  The waiver by either party of a breach of such provision
                  hereof shall not be taken or held to be a waiver or any
                  preceding or succeeding breach of such provision or as a
                  waiver of the provision itself. No waiver of any kind shall be
                  effective or binding, unless it is in writing and is signed by
                  the party against whom such waiver is sought to be enforced.

         10.5.    ASSIGNMENT. This Agreement and all rights hereunder are
                  personal to Employee and may not be transferred or assigned by
                  Employee at any time. Company may assign its rights, together
                  with its obligations thereunder, to any parent, subsidiary
                  affiliate or successor or in connection with any sale,
                  transfer or other disposition of all or substantially all of
                  its business and assets, provided, however, that any such
                  assignee assumes Company's obligations hereunder.

         10.6     WITHHOLDING. All sums payable to Employee thereunder shall be
                  reduced by all federal, state, local, and other withholding
                  and similar taxes and payments required by applicable law.

         10.7     ENTIRE AGREEMENT. This Agreement and the Employee
                  Confidentiality Agreement constitute the entire and only
                  agreements between the parties relating to employment of
                  Employee with Company, and this Agreement
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Employment Agreement Michael D. McCarthy

                  supersedes and cancels any and all previous contracts,
                  arrangements or understandings with respect thereto.

         10.8     AMENDMENT. This Agreement may be amended, modified,
                  superseded, cancelled, renewed or extended only by an
                  agreement in writing executed by both parties hereto.

         10.9     NOTICES. All notices and other communications required or
                  permitted under this Agreement shall be in writing and
                  hand-delivered, sent by Fax, sent by certified first-class
                  mail, postage pre-paid, or sent by nationally recognized
                  express courier service. Such notices and other communications
                  shall be effective upon receipt if hand-delivered or sent by
                  Fax, five (5) days after mailing if sent by mail, and one (1)
                  day after dispatch if sent by express courier, to the
                  following address, or such other addresses as any party shall
                  notify the other parties:

                       If to the Company:        AmeriQuest Technologies, Inc.
                                                 2465 Maryland Road
                                                 Willow Grove, PA 19090
                       Fax Number:               (215) 658-8968
                       Attention:                Mr. Jon D. Jensen
                                                 Corporate Secretary

                       If to the Employee:       Michael D. McCarthy
                                                 1084 Tennyson Place
                                                 Atlanta, GA 30319
                       Fax Number:               (404) 250-9905


         10.10    BINDING NATURE. This Agreement shall be binding upon, and
                  inure to the benefit of the successors and personal
                  representatives of the respective parties hereto.

         10.11    HEADINGS. The headings contained in this Agreement are for
                  reference purposes only and shall in no way affect the meaning
                  or interpretation of this Agreement. In this Agreement, the
                  singular includes the plural, the plural includes the
                  singular, the masculine gender includes both male and female
                  referents, and the word "or" is used in the inclusive sense.

         10.12    COUNTERPARTS. This Agreement may be executed in two or more
                  counterparts, each of which shall be deemed to be an original
                  but all of which, taken together, constitute one and the same
                  agreement.
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Employment Agreement Michael D. McCarthy

         10.13    GOVERNING LAW. This Agreement and rights and obligations of
                  the parties hereto shall be construed in accordance with the
                  laws of the State of Pennsylvania, without giving effect to
                  the principles of conflict of laws.



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


"COMPANY"                                   "EMPLOYEE"

AMERIQUEST TECHNOLOGIES, INC.

Signature:                                  Signature
          -----------------------------              --------------------------
Name:     Jon D. Jensen                     Name:    Michael D. McCarthy
Title:    COO, CFO and Secretary            Title:   V. P., Sales and Marketing



Signature:
          -----------------------------
Name:     Alexander C. Kramer
Title:    President and CEO
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Employment Agreement Michael D. McCarthy

                                "INCENTIVE PLAN"
                                 (ATTACHMENT 1)

1)   The Employee shall be entitled to a payment under the Incentive Plan for
     the financial year commencing 1st October, 1998 ("the incentive scheme")
     calculated in accordance with and subject to the conditions set out below
     ("the incentive payments"). The incentive payments shall comprise the
     variable compensation parts determined in accordance with paragraph 4.
     Subject to paragraph 3 below, the achievements shall form the basis of the
     calculation of the variable compensation parts. All references in this
     incentive scheme are to gross figures. The Compensation Committee of the
     Board of Directors of AmeriQuest Technologies ("the Committee") reserves
     the right in its absolute discretion to change the base salary and variable
     compensation parts for future years and/or to terminate the incentive
     scheme at the end of the fiscal year commencing October 1, 1998.

2)   The following incentive scheme applies for the fiscal year ended September
     30, 1999:

         a)       The TARGET COMPENSATION (100% compensation) amounts to
                  US$300,000.

         b)       50% of the target compensation (US$150,000) is fixed as the
                  BASE SALARY which is payable bi-weekly.

         c)       The MAXIMUM COMPENSATION amounts to 100% of the target
                  compensation.

         d)       The variable compensation parts are:

                  i)       Target Incentive: up to 50% of the target
                           compensation, depending on the achievement of the
                           targets in paragraph 3b.

3)   Basis for calculation: The targets for the 1999 fiscal year and the weights
     of the individual targets are quantified below. The target achievement will
     be calculated for each individual target. The total target achievement will
     be calculated, depending on the given weights.

         a)       The TARGETS for the 1999 fiscal year are:

                  i)       REVENUE target for the year ended September 30, 1999
                           = US$80,000,000.

                          (1)      SIX MONTH CUMULATIVE target for the quarter
                                   ended March 31=$37,600,000.

                          (2)      NINE MONTH CUMULATIVE target for the quarter
                                   ended June 30 = $58,200,000.

                  ii)      GROSS PROFIT target for the year ended September 30,
                           1999 = US$7,200,000.

                          (1)      SIX MONTH CUMULATIVE target for the quarter
                                   ended March 31=$3,300,000.

                          (2)      NINE MONTH CUMULATIVE target for the quarter
                                   ended June 30 = $5,100,000.

         b)       The WEIGHTING of each target in 3a above is 50% equally.
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Employment Agreement Michael D. McCarthy

         c)       The audited financial statements of the Company will form the
                  basis of the actual target achievement ("the calculation").
                  The Committee may, in its absolute discretion, exclude
                  extraordinary events from the calculation.

4)   The variable compensation parts will be determined by comparing the actual
     cumulative quarterly target achievement referred to at paragraph 3d above
     with the cumulative quarterly targets shown in paragraph 3a. Any incentive
     payments for the fiscal year 1999 shall comprise the following parts and
     each shall be determined as follows:

         a)       If the total target achievement is less than 65%, no incentive
                  payment will be made, except that, a minimum payment of
                  $25,000 is guaranteed and payable for the quarter ended March
                  31, 1999 in accordance with paragraph 6.

         b)       If the total target achievement is more than 65% but less than
                  90%, the incentive payment will be US$5,000 for each
                  percentage point above 65%, but not less than the minimum
                  guaranteed payment of $25,000 in 4a above (equal to 70%
                  achievement).

         c)       If the total target achievement is between 90% and 100%, the
                  incentive payment will be $125,00 plus US$2,500 for each
                  percentage point above 90%.

5)   In the event that the Employee shall be employed by the Company for only
     part of the remainder of the fiscal year, the Employee shall be entitled to
     have the incentive payments referred to at paragraph 4 above calculated on
     a pro rata basis by reference to that part of the fiscal year during which
     he/she was employed by the Company.

6)   The variable compensation part will be calculated quarterly by the Chief
     Financial Officer and approved by the Committee.

         a)       For 1999 only, one third of the above paragraph 4 determined
                  incentive payment or $25,000, whichever is greater, will be
                  made for the quarter ended March 31. Two thirds of the above
                  paragraph 4 determined incentive payment less the previous
                  quarterly payment, will be made for the quarter ended June 30.
                  All of the above paragraph 4 determined incentive less the
                  previous quarterly payments, will be made for the year ended
                  September 30.

         b)       In future fiscal years, 25%, 50%, 75% and 100% of the above
                  paragraph 4 determined incentive less the previous quarterly
                  payments, will be made for the respective quarters.

         c)       They becomes payable to the Employee on the first bi-weekly
                  pay period following approval by the Committee.

7)   In the event there is disagreement as to the calculation of the variable
     compensation parts, the parties will try to come to an amicable solution.
     Should such an amicable solution not be possible, the decision of the
     outside auditor of the Company will be final and binding.