<PAGE>

                               SECURITY AGREEMENT


          THIS SECURITY AGREEMENT, dated as of June 27, 1997, is made and 
given by TECH SQUARED  INC., a Minnesota corporation (the "Grantor"), to  
FIRST BANK NATIONAL ASSOCIATION,  a National Banking Association (the 
"Secured Party").

                                    RECITALS

          A.  The Grantor and the Secured Party have entered into a Financing 
Agreement dated as of June 27, 1997 (as the same may hereafter be amended, 
supplemented, extended, restated, or otherwise modified from time to time, 
the "Financing Agreement") pursuant to which the Secured Party has agreed to 
extend to the Grantor certain credit accommodations on the terms and 
conditions set forth in the Financing Agreement.

          B.  It is a condition precedent to the extension of any credit 
accommodations pursuant to the terms of the Financing Agreement that this 
Agreement be executed and delivered by the Grantor.

          C.  The Grantor finds it advantageous, desirable and in its best 
interests to comply with the requirement that it execute and deliver this 
Security Agreement to the Secured Party.

          NOW, THEREFORE, in consideration of the premises and in order to 
induce the Secured Party to enter into the Financing Agreement and to extend 
credit accommodations to the Grantor thereunder, the Grantor hereby agrees 
with the Secured Party for the Secured Party's benefit as follows:

          Section 1.  DEFINED TERMS.

               1(a)  As used in this Agreement, the following terms shall have
     the meanings indicated:

          "ACCOUNTS" shall mean each and every right to payment of Grantor,
     whether such right to payment arises out of a sale or lease of goods by
     Grantor, or other disposition of goods or other property of Grantor, out of
     a rendering of services by Grantor, out of a loan by Grantor, out of damage
     to or loss of goods in the possession of a railroad or other carrier or any
     other bailee, out of overpayment of taxes or other liabilities of Grantor,
     or which otherwise arises under any contract or agreement, or from any
     other cause, whether such right to payment now exists or hereafter arises
     and whether such right to payment is or is not yet earned by performance
     and howsoever such right to payment may be evidenced, together with all
     other rights and interest (including all liens and security interests)
     which Grantor may at any time have by law or agreement against any account
     debtor (as defined in the Uniform Commercial Code in effect in the State of
     Minnesota) or other obligor obligated to make any such payment or against
     any of the property of such account debtor or other obligor; specifically
     (but without limitation), the term includes all present and future
     instruments, documents, chattel papers, accounts and contract rights of
     Grantor.

          "ACCOUNT DEBTOR" shall mean a Person who is obligated on or under any
     Account, Chattel Paper, Instrument or General Intangible.

                                          -1-

<PAGE>

          "CHATTEL PAPER" shall mean a writing or writings which evidence both a
     monetary obligation and a security interest in or lease of specific goods;
     when a transaction is evidenced by both a security agreement or a lease and
     by an Instrument or a series of Instruments, the group of writings taken
     together constitutes Chattel Paper.

          "COLLATERAl" shall mean all property and rights in property now owned
     or hereafter at any time acquired by the Grantor in or upon which a
     Security Interest is granted to the Secured Party by the Grantor under this
     Agreement.

          "DOCUMENT" shall mean any bill of lading, dock warrant, dock receipt,
     warehouse receipt or order for the delivery of goods, together with any
     other document or receipt which in the regular course of business or
     financing is treated as adequately evidencing that the Person in possession
     of it is entitled to receive, hold and dispose of the document and the
     goods it covers.

          "EQUIPMENT"  shall mean all machinery, equipment, furniture,
     furnishings and fixtures, including all accessions, accessories and
     attachments thereto, and any guaranties, warranties, indemnities and other
     agreements of manufacturers, vendors and others with respect to such
     Equipment.

          "EVENT OF DEFAULt" shall have the meaning given to such term in
     Section 20 hereof.

          "FINANCING STATEMENT" shall have the meaning given to such term in
     Section 4 hereof.

          "GENERAL INTANGIBLES" shall mean any personal property (other than
     goods, Accounts, Chattel Paper, Documents, Instruments and money) including
     choses in action, causes of action, contract rights, corporate and other
     business records, inventions, designs, patents, patent applications,
     service marks, trademarks, tradenames, trade secrets, engineering drawings,
     good will, registrations, copyrights, licenses, franchises, customer lists,
     tax refund claims, royalties, licensing and product rights, rights to the
     retrieval from third parties of electronically processed and recorded data
     and all rights to payment resulting from an order of any court, but shall
     exclude all of Grantor's stock and investments.

          "INSTRUMENT" shall mean a draft, check, certificate of deposit, note,
     bill of exchange, security or any other writing which evidences a right to
     the payment of money and is not itself a security agreement or lease and is
     of a type which is transferred in the ordinary course of business by
     delivery with any necessary endorsement or assignment.

          "INVENTORY" shall mean any and all of the Grantor's goods, including,
     without limitation, goods in transit, wherever located which are or may at
     any time be leased by the Grantor to a lessee, held for sale or lease,
     furnished under any contract of service or held as raw materials, work in
     process, or supplies or materials used or consumed in the Grantor's
     business, or which are held for use in connection with the manufacture,
     packing, shipping, advertising, selling or finishing of such goods, and all
     goods, the sale or other disposition of which has given rise to a
     Receivable, which are returned to and/or repossessed and/or stopped in
     transit by the Grantor or the Secured Party, or at any time hereafter in
     the possession or under the control of the Grantor or the Secured Party, or
     any agent or bailee of either thereof, and all documents of title or other
     documents representing the same.

          "LIEN" shall mean any security interest, mortgage, pledge, lien,
     charge, encumbrance, title retention agreement or analogous instrument or
     device (including the 

                                             -2-

<PAGE>

     interest of the lessors under capitalized leases), in, of or on any assets 
     or properties of the Person referred to.

          "OBLIGATIONS" shall mean (a) all indebtedness, liabilities and
     obligations of the Grantor to the Secured Party of every kind, nature or
     description under the Financing Agreement, including the Grantor's
     obligation on any promissory note or notes under the Financing Agreement
     and any note or notes hereafter issued in substitution or replacement
     thereof, (b) all liabilities of the Grantor under this Agreement, and (c)
     any and all other liabilities and obligations of the Grantor to the Secured
     Party of every kind, nature and description, whether direct or indirect or
     hereafter acquired by the Secured Party from any Person, absolute or
     contingent, regardless of how such liabilities arise or by what agreement
     or instrument they may be evidenced, and in all of the foregoing cases
     whether due or to become due, and whether now existing or hereafter arising
     or incurred.

          "PERSON" shall mean any individual, corporation, partnership, limited
     partnership, limited liability company, joint venture, firm, association,
     trust, unincorporated organization, government or governmental agency or
     political subdivision or any other entity, whether acting in an individual,
     fiduciary or other capacity.

          "SECURITY INTEREST" shall have the meaning given such term in Section
     2 hereof.

               1(b)  All other terms used in this Agreement which are not
     specifically defined herein shall have the meaning assigned to such terms
     in the Uniform Commercial Code in effect in the State of Minnesota as of
     the date of this Agreement to the extent such other terms are defined
     therein.

               1(c)  Unless the context of this Agreement otherwise clearly
     requires, references to the plural include the singular, the singular, the
     plural and "or" has the inclusive meaning represented by the phrase
     "and/or."  The words "include", "includes" and "including" shall be deemed
     to be followed by the phrase "without limitation."  The words "hereof,"
     "herein," "hereunder," and similar terms in this Agreement refer to this
     Agreement as a whole and not to any particular provision of this Agreement.
     References to Sections are references to Sections in this Security
     Agreement unless otherwise provided.

          Section 2.  GRANT OF SECURITY INTERESt.  As security for the 
payment and performance of all of the Obligations, the Grantor hereby grants 
to the Secured Party a security interest (the "Security Interest") in all of 
the Grantor's right, title, and interest in and to the following, whether now 
or hereafter owned, existing, arising or acquired and wherever located:

               2(a)  All Accounts.

               2(b)  All Chattel Paper.

               2(c)  All Documents.

               2(d)  All Equipment.

               2(e)  All General Intangibles.

               2(f)  All Instruments (other than instruments of Hanover Gold
     Company, Inc., Digital River, Inc. and Cam Designs, Inc. in which no
     security interest                      is granted hereunder.)

               2(g)  All Inventory.

                                     -3-

<PAGE>

               2(h)  To the extent not otherwise included in the foregoing, (i)
     all other rights to the payment of money, including rents and other sums
     payable to the Grantor under leases, rental agreements and other Chattel
     Paper and insurance proceeds; (ii) all books, correspondence, credit files,
     records, invoices, bills of lading, and other documents relating to any of
     the foregoing, including, without limitation, all tapes, cards, disks,
     computer software, computer runs, and other papers and documents in the
     possession or control of the Grantor or any computer bureau from time to
     time acting for the Grantor; (iii) all rights in, to and under all policies
     insuring the life of any officer, director, stockholder or employee of the
     Grantor, the proceeds of which are payable to the Grantor; and (iv) all
     accessions and additions to, parts and appurtenances of, substitutions for
     and replacements of any of the foregoing.

               2(i)  To the extent not otherwise included, all proceeds and
     products of any and all of the foregoing.

          Section 3.  GRANTOR REMAINS LIABLE.  Anything herein to the 
contrary notwithstanding, (a) the Grantor shall remain liable under the 
Accounts, Chattel Paper, General Intangibles and other items included in the 
Collateral to the extent set forth therein to perform all of its duties and 
obligations thereunder to the same extent as if this Agreement had not been 
executed, (b) the exercise by the Secured Party of any of the rights 
hereunder shall not release the Grantor from any of its duties or obligations 
under any items included in the Collateral, and (c) the Secured Party shall 
have no obligation or liability under Accounts, Chattel Paper, General 
Intangibles and other items included in the Collateral by reason of this 
Agreement, nor shall the Secured Party be obligated to perform any of the 
obligations or duties of the Grantor thereunder or to take any action to 
collect or enforce any claim for payment assigned hereunder.

          Section 4.  TITLE TO COLLATERAL.  The Grantor has (or will have at 
the time it acquires rights in Collateral hereafter acquired or arising) and 
will maintain so long as the Security Interest may remain outstanding, title 
to each item of Collateral (including the proceeds and products thereof), 
free and clear of all Liens except the Security Interest and except Liens 
permitted by the Financing Agreement.  The Grantor will defend the Collateral 
against all claims or demands of all Persons (other than the Secured Party) 
claiming the Collateral or any interest therein.  As of the date of execution 
of this Security Agreement, no effective financing statement or other similar 
document used to perfect and preserve a security interest under the laws of 
any jurisdiction (a "Financing Statement") covering all or any part of the 
Collateral is on file in any recording office, except such as may have been 
filed (a) in favor of the Secured Party relating to this Agreement, or (b) to 
perfect Liens permitted by the Financing Agreement.

          Section 5.  LOCK BOX, COLLATERAL ACCOUNT.  The Grantor will direct 
each of its Account Debtors or other obligors to make payments due under any 
Collateral directly to a special lock box to be established and maintained by 
Secured Party (the "Lockbox").  The Grantor hereby authorizes and directs 
Secured Party to deposit into a special collateral account to be established 
and maintained by Secured Party (the "Collateral Account") all checks, drafts 
and cash payments received in said Lockbox.  All deposits from the Lockbox to 
the Collateral Account shall constitute proceeds of Collateral and shall not 
constitute payment of any Obligation.  The Grantor agrees that it will 
promptly deliver to Secured Party, for deposit into said Collateral Account, 
all payments on Accounts and Chattel Paper received by it.  All such payments 
shall be delivered to Secured Party in the form received (except for the 
Grantor's endorsement where necessary).  Until so delivered, all payments on 
Accounts and Chattel Paper received by the Grantor shall be held in trust by 
the Grantor for and as the property of Secured Party and shall not be 
commingled with any funds or property of the Grantor.

                                 -4-

<PAGE>

          Section 6.  COLLECTION RIGHTS OF SECURED PARTY.  Notwithstanding 
Secured Party's rights under Section 5 with respect to any and all 
Instruments, Chattel Paper, Accounts and other rights to payment constituting 
Collateral (including proceeds), Secured Party may, at any time (both before 
and after the occurrence of an Event of Default) notify any Account Debtor, 
or any other person obligated to pay any amount due, that such Chattel Paper, 
Account, or other right to payment has been assigned or transferred to 
Secured Party for security and shall be paid directly to Secured Party.  If 
Secured Party so requests at any time, the Grantor will so notify such 
Account Debtors and other obligors in writing and will indicate on all 
invoices to such Account Debtors or other obligors that the amount due is 
payable directly to Secured Party.  At any time after Secured Party or the 
Grantor gives such notice to an account debtor or other obligor, Secured 
Party may (but need not), in its own name or in the Grantor's name, demand, 
sue for, collect or receive any money or property at any time payable or 
receivable on account of, or securing, any such chattel paper, account, or 
other right to payment, or grant any extension to, make any compromise or 
settlement with or otherwise agree to waive, notify, amend or change the 
obligations (including collateral obligations) of any such account debtor or 
other obligor.  The Borrower hereby irrevocably makes, constitutes and 
appoints the Lender, or any person whom the Lender may designate, the 
Borrower's true and lawful attorney with power to receive, open and dispose 
of all mail addressed to the Borrower; to endorse the Borrower's name on any 
notes, acceptances, checks, drafts, money orders or other means of payment 
that may come into the Lender's possession as payment of or upon Accounts, 
Chattel Paper or other Collateral; to endorse the Borrower's name on any 
invoice, freight or express bill or bill of lading relating to any 
Collateral; to sign the Borrower's name to drafts against Account Debtors, to 
assignments and verification of accounts and notices thereof to Account 
Debtors, and to documents of title covering any Collateral, and to do all 
other things necessary or proper to carry out the intent of this Agreement.

          Section 7.  DISPOSITION OF COLLATERAL.  The Grantor will not sell, 
lease or otherwise dispose of, or discount or factor with or without 
recourse, any Collateral, except sales of items of Inventory in the ordinary 
course of business.

          Section 8.  NAMES, OFFICES, LOCATIONS.  The Grantor does business 
solely under its own name and the trade names and styles, if any, set forth 
on Schedule II hereto.  Except as noted on said Schedule, no such trade names 
or styles and no trademarks or other similar marks owned by the Grantor are 
registered with any governmental unit.  The chief place of business and chief 
executive office and the office where it keeps its books and records 
concerning the Accounts and General Intangibles and the originals of all 
Chattel Paper, Documents and Instruments are located at its address set forth 
on the signature page hereof.  All items of Equipment and Inventory existing 
on the date of this Agreement are located at the places specified on Schedule 
I hereto.  The Grantor will immediately notify the Secured Party of any 
additional state in which any item of Inventory or Equipment is hereafter 
located.  The Grantor will from time to time at the request of the Secured 
Party provide the Secured Party with current lists as to the locations of the 
Equipment and Inventory.  The Grantor will not permit any Inventory, 
Equipment, Chattel Paper or Documents or any records pertaining to Accounts 
and General Intangibles to be located in any state or area in which, in the 
event of such location, a financing statement covering such Collateral would 
be required to be, but has not in fact been, filed in order to perfect the 
Security Interest.  The Grantor will not change its name or the location of 
its chief place of business and chief executive office unless the Secured 
Party has been given at least 30 days prior written notice thereof and the 
Grantor has executed and delivered to the Secured Party such Financing 
Statements and other instruments required or appropriate to continue the 
perfection of the Security Interest.

          Section 9.  RIGHTS TO PAYMENT.  Except as the Grantor may otherwise 
advise the Secured Party in writing, each Account, Chattel Paper, Document, 
General Intangible and Instrument constituting or evidencing Collateral is 
(or, in the case of all future Collateral, will be when arising or issued) 
the valid, genuine and legally enforceable obligation of the Account Debtor 
or other obligor named therein or in the Grantor's records pertaining thereto 
as being obligated to 

                                       -5-

<PAGE>

pay or perform such obligation.  The Grantor will perform and comply in all 
material respects with all its obligations under any items included in the 
Collateral and exercise promptly and diligently its rights thereunder.

          Section 10.   FURTHER ASSURANCES.  

               10(a)  The Grantor agrees that from time to time, at its expense,
     it will promptly execute and deliver all further instruments and documents,
     and take all further action, that may be necessary or that the Secured
     Party may reasonably request, in order to perfect and protect the Security
     Interest granted or purported to be granted hereby or to enable the Secured
     Party to exercise and enforce its rights and remedies hereunder with
     respect to any Collateral (but any failure to request or assure that the
     Grantor execute and deliver such instrument or documents or to take such
     action shall not affect or impair the validity, sufficiency or
     enforceability of this Agreement and the Security Interest, regardless of
     whether any such item was or was not executed and delivered or action taken
     in a similar context or on a prior occasion).  Without limiting the
     generality of the foregoing, the Grantor will, promptly and from time to
     time at the request of the Secured Party:  (i) mark, or permit the Secured
     Party to mark, conspicuously its books, records, and accounts showing or
     dealing with the Collateral, and each item of Chattel Paper included in the
     Collateral, with a legend, in form and substance satisfactory to the
     Secured Party, indicating that each such item of Collateral and each such
     item of Chattel Paper is subject to the Security Interest granted hereby;
     (ii) deliver and pledge to the Secured Party, all Instruments and
     Documents, duly indorsed or accompanied by duly executed instruments of
     transfer or assignment, with full recourse to the Grantor, all in form and
     substance satisfactory to the Secured Party; (iii) execute and file such
     Financing Statements or continuation statements in respect thereof, or
     amendments thereto, and such other instruments or notices (including
     fixture filings with any necessary legal descriptions as to any goods
     included in the Collateral which the Secured Party determines might be
     deemed to be fixtures, and instruments and notices with respect to vehicle
     titles), as may be necessary or desirable, or as the Secured Party may
     request, in order to perfect, preserve, and enhance the Security Interest
     granted or purported to be granted hereby; and (iv) obtain waivers, in form
     satisfactory to the Secured Party, of any claim to any Collateral from any
     landlords or mortgagees of any property where any Inventory or Equipment is
     located. 

               10(b)  The Grantor hereby authorizes the Secured Party to file
     one or more Financing Statements or continuation statements in respect
     thereof, and amendments thereto, relating to all or any part of the
     Collateral without the signature of the Grantor where permitted by law.  A
     photocopy or other reproduction of this Agreement or any Financing
     Statement covering the Collateral or any part thereof shall be sufficient
     as a Financing Statement where permitted by law.

               10(c)  The Grantor will furnish to the Secured Party from time to
     time statements and schedules further identifying and describing the
     Collateral and such other reports in connection with the Collateral as the
     Secured Party may reasonably request, all in reasonable detail and in form
     and substance reasonably satisfactory to the Secured Party.

          Section 11.  TAXES AND CLAIMS.  The Grantor will promptly pay all 
taxes and other governmental charges levied or assessed upon or against any 
Collateral or upon or against the creation, perfection or continuance of the 
Security Interest, as well as all other claims of any kind (including claims 
for labor, material and supplies) against or with respect to the Collateral, 
except to the extent (a) such taxes, charges or claims are being contested in 
good faith by appropriate proceedings, (b) such proceedings do not involve 
any material danger of the sale, forfeiture or loss of any of the Collateral 
or any interest therein and (c) such taxes, charges or claims are adequately 

                                   -6-

<PAGE>

reserved against on the Grantor's books in accordance with generally accepted 
accounting principles.

          Section 12.  BOOKS AND RECORDS.  The Grantor will keep and maintain 
at its own cost and expense satisfactory and complete records of the 
Collateral, including a record of all payments received and credits granted 
with respect to all Accounts, Chattel Paper and other items included in the 
Collateral.

          Section 13.  INSPECTION, REPORTS, VERIFICATIONS.  The Grantor will 
at all reasonable times permit the Secured Party or its representatives to 
examine or inspect any Collateral, any evidence of Collateral and the 
Grantor's books and records concerning the Collateral, wherever located.  The 
Grantor will from time to time when requested by the Secured Party furnish to 
the Secured Party a report on its Accounts, Chattel Paper, General 
Intangibles and Instruments, naming the Account Debtors or other obligors 
thereon, the amount due and the aging thereof.  The Secured Party or its 
designee is authorized to contact Account Debtors and other Persons obligated 
on any such Collateral from time to time to verify the existence, amount 
and/or terms of such Collateral.

          Section 14.  NOTICE OF LOSS.  The Grantor will promptly notify the 
Secured Party of any loss of or material damage to any material item of 
Collateral or of any substantial adverse change, known to Grantor, in any 
material item of Collateral or the prospect of payment or performance thereof.

          Section 15.  INSURANCE.  The Grantor will keep the Equipment and 
Inventory insured against "all risks" for the full replacement cost thereof 
subject to a deductible in an amount, and with an insurance company or 
companies, satisfactory to the Secured Party, the policies to protect the 
Secured Party as its interests may appear, with such policies or certificates 
with respect thereto to be delivered to the Secured Party at its request.  
Each such policy or the certificate with respect thereto shall provide that 
such policy shall not be canceled or allowed to lapse unless at least 30 days 
prior written notice is given to the Secured Party.

          Section 16.  LAWFUL USE; FAIR LABOR STANDARDS ACT. The Grantor will 
use and keep the Collateral, and will require that others use and keep the 
Collateral, only for lawful purposes, without violation of any federal, state 
or local law, statute or ordinance.  All Inventory of the Grantor as of the 
date of this Agreement that was produced by the Grantor or with respect to 
which the Grantor performed any manufacturing  or assembly process was 
produced by the Grantor (or such manufacturing or assembly process was 
conducted) in compliance in all material respects with all requirements of 
the Fair Labor Standards Act, and all Inventory produced, manufactured or 
assembled by the Grantor after the date of this Agreement will be so 
produced, manufactured or assembled, as the case may be.

          Section 17.  ACTION BY THE SECURED PARTY.  If the Grantor at any 
time fails to perform or observe any of the foregoing agreements, the Secured 
Party shall have (and the Grantor hereby grants to the Secured Party) the 
right, power and authority (but not the duty) to perform or observe such 
agreement on behalf and in the name, place and stead of the Grantor (or, at 
the Secured Party's option, in the Secured Party's name) and to take any and 
all other actions which the Secured Party may reasonably deem necessary to 
cure or correct such failure (including, without limitation, the payment of 
taxes, the satisfaction of Liens, the procurement and maintenance of 
insurance, the execution of assignments, security agreements and Financing 
Statements, and the indorsement of instruments); and the Grantor shall 
thereupon pay to the Secured Party on demand the amount of all monies 
expended and all costs and expenses (including reasonable attorneys' fees and 
legal expenses) incurred by the Secured Party in connection with or as a 
result of the performance or observance of such agreements or the taking of 
such action by the Secured Party, together with interest thereon from the 
date expended or incurred at the highest 

                                   -7-

<PAGE>

lawful rate then applicable to any of the Obligations, and all such monies 
expended, costs and expenses and interest thereon shall be part of the 
Obligations secured by the Security Interest.

          Section 18.  INSURANCE CLAIMS.  As additional security for the 
payment and performance of the Obligations, the Grantor hereby assigns to the 
Secured Party any and all monies (including proceeds of insurance and refunds 
of unearned premiums) due or to become due under, and all other rights of the 
Grantor with respect to, any and all policies of insurance now or at any time 
hereafter covering the Collateral or any evidence thereof or any business 
records or valuable papers pertaining thereto.  At any time, whether before 
or after the occurrence of any Event of Default, the Secured Party may (but 
need not), in the Secured Party's name or in Grantor's name, execute and 
deliver proofs of claim, receive all such monies, indorse checks and other 
instruments representing payment of such monies, and adjust, litigate, 
compromise or release any claim against the issuer of any such policy.  
Notwithstanding any of the foregoing, so long as no Event of Default exists 
the Grantor shall be entitled to all insurance proceeds with respect to 
Equipment or Inventory provided that such proceeds are applied to the cost of 
replacement Equipment or Inventory.

          Section 19.  THE SECURED PARTY'S DUTIES.  The powers conferred on 
the Secured Party hereunder are solely to protect its interest in the 
Collateral and shall not impose any duty upon it to exercise any such powers. 
 The Secured Party shall be deemed to have exercised reasonable care in the 
safekeeping of any Collateral in its possession if such Collateral is 
accorded treatment substantially equal to the safekeeping which the Secured 
Party accords its own property of like kind.  Except for the safekeeping of 
any Collateral in its possession and the accounting for monies and for other 
properties actually received by it hereunder, the Secured Party shall have no 
duty, as to any Collateral, as to ascertaining or taking action with respect 
to calls, conversions, exchanges, maturities, tenders or other matters 
relative to any Collateral, whether or not the Secured Party has or is deemed 
to have knowledge of such matters, or as to the taking of any necessary steps 
to preserve rights against any Persons or any other rights pertaining to any 
Collateral.  The Secured Party will take action in the nature of exchanges, 
conversions, redemptions, tenders and the like requested in writing by the 
Grantor with respect to the Collateral in the Secured Party's possession if 
the Secured Party in its reasonable judgment determines that such action will 
not impair the Security Interest or the value of the Collateral, but a 
failure of the Secured Party to comply with any such request shall not of 
itself be deemed a failure to exercise reasonable care.

          Section 20.  EVENTS OF DEFAULT.  The occurrence of any one or more 
of the following events shall constitute an Event of Default under this 
Agreement:

               20(a)  The Grantor shall fail to make payment when due, whether
     upon demand, or at a scheduled due date, or otherwise, any principal of or
     interest on its obligations under the Financing Agreement or any other
     obligations of the Grantor to the Secured Party.

               20(b)  Any representation or warranty made by or on behalf of the
     Grantor in this Agreement or the Financing Agreement or by or on behalf of
     the Grantor in any certificate, statement, report or document herewith or
     hereafter furnished to the Secured Party pursuant to this Agreement or the
     Financing Agreement shall prove to have been false or misleading in any
     material respect on the date as of which the facts set forth are stated or
     certified.

               20(c)  The Grantor shall fail to comply with Sections 5.2 or 5.3
     or any Section of Article VI of the Financing Agreement.

                                      -8-

<PAGE>

               20(d)  The Grantor shall fail to comply with any other agreement,
     covenant, condition, provision or term contained in this Agreement or the
     Financing Agreement (other than those hereinabove set forth in this
     Section20) and such failure to comply shall continue for 30 calendar days
     after whichever of the following dates is the earliest:  (i) the date the
     Grantor gives notice of such failure to the Secured Party, or (ii) the date
     the Secured Party gives notice of such failure to the Grantor.

               20(e)  The Grantor shall apply for or consent to, or shall
     acquiesce in the appointment of a custodian, trustee or receiver of the
     Grantor or for a substantial part of the property thereof or, in the
     absence of such application, consent or acquiescence, a custodian, trustee
     or receiver shall be appointed for the Grantor or for a substantial part of
     the property thereof and shall not be discharged within 45 days, or the
     Grantor shall make an assignment for the benefit of creditors.

               20(f)  Any bankruptcy, reorganization, debt arrangement or other
     proceedings under any bankruptcy or insolvency law shall be instituted by
     or against the Borrower and, if instituted against the Grantor, shall have
     been consented to or acquiesced in by the Grantor or shall remain
     undismissed for 60 days, or an order for relief shall have been entered
     against the Grantor.

               20(g)  Any dissolution or liquidation proceeding shall be
     instituted by or against the Grantor and, if instituted against the
     Grantor, shall be consented to or acquiesced in by the Grantor or shall
     remain for 45 days undismissed.

               20(h)  A judgment or judgments for the payment of money in excess
     of the sum of $[    ] in the aggregate shall be rendered against the
     Grantor and either (i) the judgment creditor executes on such judgment or
     (ii) such judgment remains unpaid or undischarged for more than 60 days
     from the date of entry thereof or such longer period during which execution
     of such judgment shall be stayed during an appeal from such judgment.

               20(i)  Any execution or attachment shall be issued whereby any
     substantial part of the property of the Grantor shall be taken or attempted
     to be taken and the same shall not have been vacated or stayed within 30
     days after the issuance thereof.

               20(j)  Any guarantor of any of the Obligations shall seek to
     revoke its, his or her guaranty or any such guaranty shall become
     unenforceable for any reason.

               20(k)  Any default or event of default (however denominated or
     defined) shall occur with respect to any indebtedness of the Grantor (other
     than the Obligations) permitted under the Financing Agreement.

THE FOREGOING EVENTS OF DEFAULT, AND THE REMEDIES UPON EVENT OF DEFAULT AS 
SET FORTH BELOW IN SECTION 21, ARE IN ADDITION TO AND SUPPLEMENT THE RIGHTS 
OF THE SECURED PARTY UNDER THE FINANCING AGREEMENT, INCLUDING WITHOUT 
LIMITATION THE RIGHT OF THE SECURED PARTY TO DEMAND PAYMENT OF THE 
OBLIGATIONS UNDER THE FINANCING AGREEMENT IN FULL AT ANY TIME IN ITS ABSOLUTE 
DISCRETION.  NOTHING SET FORTH IN THIS AGREEMENT (INCLUDING THE PROVISIONS OF 
THIS SECTION 20 OR THE REMEDIES WITH RESPECT THERETO AS SET FORTH IN SECTION 
21) SHALL IN ANY WAY LIMIT THE SECURED PARTY'S DISCRETION TO MAKE OR NOT MAKE 
LOANS TO THE DEBTOR OR THE SECURED PARTY'S RIGHT TO DEMAND PAYMENT OF THE 
OBLIGATIONS.

                                    -9-

<PAGE>

          Section 21.  REMEDIES ON DEFAULT.  Upon the occurrence of an Event 
of Default and at any time thereafter: 

               21(a)  The Secured Party may exercise and enforce any and all
     rights and remedies available upon default to a secured party under the
     Uniform Commercial Code.

               21(b)  The Secured Party shall have the right to enter upon and
     into and take possession of all or such part or parts of the properties of
     the Grantor, including lands, plants, buildings, Equipment, Inventory and
     other property as may be necessary or appropriate in the judgment of the
     Secured Party to permit or enable the Secured Party to manufacture,
     produce, process, store or sell or complete the manufacture, production,
     processing, storing or sale of all or any part of the Collateral, as the
     Secured Party may elect, and to use and operate said properties for said
     purposes and for such length of time as the Secured Party may deem
     necessary or appropriate for said purposes without the payment of any
     compensation to Grantor therefor.  The Secured Party may require the
     Grantor to, and the Grantor hereby agrees that it will, at its expense and
     upon request of the Secured Party forthwith, assemble all or part of the
     Collateral as directed by the Secured Party and make it available to the
     Secured Party at a place or places to be designated by the Secured Party.  

               21(c)  Any sale of Collateral may be in one or more parcels at
     public or private sale, at any of the Secured Party's offices or elsewhere,
     for cash, on credit, or for future delivery, and upon such other terms as
     the Secured Party may reasonably believe are commercially reasonable.  The
     Secured Party shall not be obligated to make any sale of Collateral
     regardless of notice of sale having been given, and the Secured Party may
     adjourn any public or private sale from time to time by announcement made
     at the time and place fixed therefor, and such sale may, without further
     notice, be made at the time and place to which it was so adjourned.  

               21(d)  The Secured Party is hereby granted a license or other
     right to use, without charge, all of the Grantor's property, including,
     without limitation, all of the Grantor's labels, trademarks, copyrights,
     patents and advertising matter, or any property of a similar nature, as it
     pertains to the Collateral, in completing production of, advertising for
     sale and selling any Collateral, and the Grantor's rights under all
     licenses and all franchise agreements shall inure to the Secured Party's
     benefit until the Obligations are paid in full.    

               21(e)  If notice to the Grantor of any intended disposition of
     Collateral or any other intended action is required by law in a particular
     instance, such notice shall be deemed commercially reasonable if given in
     the manner specified for the giving of notice in Section 25 hereof at least
     ten calendar days prior to the date of intended disposition or other
     action, and the Secured Party may exercise or enforce any and all other
     rights or remedies available by law or agreement against the Collateral,
     against the Grantor, or against any other Person or property.

          Section 22.  APPLICATION OF PROCEEDS.   All cash proceeds received 
by the Secured Party in respect of any sale of, collection from, or other 
realization upon all or any part of the Collateral may, in the discretion of 
the Secured Party, be held by the Secured Party as collateral for, or then or 
at any time thereafter be applied in whole or in part by the Secured Party 
against, all or any part of the Obligations (including, without limitation, 
any expenses of the Secured Party payable pursuant to Section 23 hereof).

          Section 23.  COSTS AND EXPENSES; INDEMNITY.  The Grantor will pay 
or reimburse the Secured Party on demand for all out-of-pocket expenses 
(including in each case all filing and 

                                    -10-

<PAGE>

recording fees and taxes and all reasonable fees and expenses of counsel and 
of any experts and agents) incurred by the Secured Party in connection with 
the creation, perfection, protection, satisfaction, foreclosure or 
enforcement of the Security Interest and the preparation, administration, 
continuance, amendment or enforcement of this Agreement, and all such costs 
and expenses shall be part of the Obligations secured by the Security 
Interest.  The Grantor shall indemnify and hold the Secured Party harmless 
from and against any and all claims, losses and liabilities (including 
reasonable attorneys' fees) growing out of or resulting from this Agreement 
and the Security Interest hereby created (including enforcement of this 
Agreement) or the Secured Party's actions pursuant hereto, except claims, 
losses or liabilities resulting from the Secured Party's gross negligence or 
willful misconduct as determined by a final judgment of a court of competent 
jurisdiction.  Any liability of the Grantor to indemnify and hold the Secured 
Party harmless pursuant to the preceding sentence shall be part of the 
Obligations secured by the Security Interest.  The obligations of the Grantor 
under this Section shall survive any termination of this Agreement.

          Section 24.  WAIVERS; REMEDIES; MARSHALLING.  This Agreement can be 
waived, modified, amended, terminated or discharged, and the Security 
Interest can be released, only explicitly in a writing signed by the Secured 
Party.  A waiver so signed shall be effective only in the specific instance 
and for the specific purpose given.  Mere delay or failure to act shall not 
preclude the exercise or enforcement of any rights and remedies available to 
the Secured Party.  All rights and remedies of the Secured Party shall be 
cumulative and may be exercised singly in any order or sequence, or 
concurrently, at the Secured Party's option, and the exercise or enforcement 
of any such right or remedy shall neither be a condition to nor bar the 
exercise or enforcement of any other.  The Grantor hereby waives all 
requirements of law, if any, relating to the marshalling of assets which 
would be applicable in connection with the enforcement by the Secured Party 
of its remedies hereunder, absent this waiver. 

          Section 25.   NOTICES.  Any notice or other communication to any 
party in connection with this Agreement shall be in writing and shall be sent 
by manual delivery, telegram, telex, facsimile transmission, overnight 
courier or United States mail (postage prepaid) addressed to such party at 
the address specified on the signature page hereof, or at such other address 
as such party shall have specified to the other party hereto in writing.  All 
periods of notice shall be measured from the date of delivery thereof if 
manually delivered, from the date of sending thereof if sent by telegram, 
telex or facsimile transmission, from the first business day after the date 
of sending if sent by overnight courier, or from four days after the date of 
mailing if mailed.

          Section 26.   GRANTOR ACKNOWLEDGEMENTS.  The Grantor hereby 
acknowledges that (a) it has been advised by (or has had full opportunity to 
avail itself of the advice of) counsel in the negotiation, execution and 
delivery of this Agreement, (b) the Secured Party has no fiduciary 
relationship to the Grantor, the relationship being solely that of debtor and 
creditor, and (c) no joint venture exists between the Grantor and the Secured 
Party.

          Section 27.  CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER 
FINANCING AGREEMENT.  This Agreement shall (a) create a continuing security 
interest in the Collateral and shall remain in full force and effect until 
payment in full of the Obligations, (b) be binding upon the Grantor, its 
successors and assigns, and (c) inure to the benefit of, and be enforceable 
by, the Secured Party and its successors, transferees, and assigns.  Without 
limiting the generality of the foregoing clause (c), the Secured Party may 
assign or otherwise transfer all or any portion of its rights and obligations 
under the Financing Agreement to any other Persons to the extent and in the 
manner provided in the Financing Agreement and may similarly transfer all or 
any portion of its rights under this Security Agreement to such Persons.

          Section 28.  TERMINATION OF SECURITY INTEREST.  Upon payment in 
full of the Obligations, the Security Interest granted hereby shall 
terminate.  Upon any such termination, the Secured 

                                    -11-

<PAGE>

Party will return to the Grantor such of the Collateral then in the 
possession of the Secured Party as shall not have been sold or otherwise 
applied pursuant to the terms hereof and execute and deliver to the Grantor 
such documents as the Grantor shall reasonably request to evidence such 
termination.  Any reversion or return of Collateral upon termination of this 
Agreement and any instruments of transfer or termination shall be at the 
expense of the Grantor and shall be without warranty by, or recourse on, the 
Secured Party.  As used in this Section, "Grantor" includes any assigns of 
Grantor, any Person holding a subordinate security interest in any of the 
Collateral or whoever else may be lawfully entitled to any part of the 
Collateral.

          SECTION 29.    GOVERNING LAW AND CONSTRUCTION.  THE VALIDITY, 
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE 
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS 
PRINCIPLES THEREOF, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF 
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY 
PARTICULAR COLLATERAL ARE MANDATORILY GOVERNED BY THE LAWS OF A JURISDICTION 
OTHER THAN THE STATE OF MINNESOTA.   Whenever possible, each provision of 
this Agreement and any other statement, instrument or transaction 
contemplated hereby or relating hereto shall be interpreted in such manner as 
to be effective and valid under such applicable law, but, if any provision of 
this Agreement or any other statement, instrument or transaction contemplated 
hereby or relating hereto shall be held to be prohibited or invalid under 
such applicable law, such provision shall be ineffective only to the extent 
of such prohibition or invalidity, without invalidating the remainder of such 
provision or the remaining provisions of this Agreement or any other 
statement, instrument or transaction contemplated hereby or relating hereto.

          SECTION 30.  CONSENT TO JURISDICTION.  AT THE OPTION OF THE SECURED 
PARTY, THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE 
COURT SITTING IN HENNEPIN COUNTY; AND THE GRANTOR CONSENTS TO THE 
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE 
IN SUCH FORUMS IS NOT CONVENIENT.  IN THE EVENT THE GRANTOR COMMENCES ANY 
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY 
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS 
AGREEMENT, THE SECURED PARTY AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE 
TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF 
SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE 
DISMISSED WITHOUT PREJUDICE.

          SECTION 31.  WAIVER OF NOTICE AND HEARING.  THE GRANTOR HEREBY 
WAIVES ALL RIGHTS TO A JUDICIAL HEARING OF ANY KIND PRIOR TO THE EXERCISE BY 
THE SECURED PARTY OF ITS RIGHTS TO POSSESSION OF THE COLLATERAL WITHOUT 
JUDICIAL PROCESS OR OF ITS RIGHTS TO REPLEVY, ATTACH, OR LEVY UPON THE 
COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.  THE GRANTOR ACKNOWLEDGES THAT IT 
HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS PROVISION AND 
THIS AGREEMENT.

          SECTION 32.  WAIVER OF JURY TRIAL.  EACH OF THE GRANTOR AND THE 
SECURED PARTY, BY ITS ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY 
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR 
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                    -12-

<PAGE>

          Section 33.  COUNTERPARTS.  This Agreement may be executed in any 
number of counterparts, each of which when so executed and delivered shall be 
deemed an original, but all such counterparts together shall constitute but 
one and the same instrument.

          Section 34.  GENERAL.  All representations and warranties contained 
in this Agreement or in any other agreement between the Grantor and the 
Secured Party shall survive the execution, delivery and performance of this 
Agreement and the creation and payment of the Obligations.  The Grantor 
waives notice of the acceptance of this Agreement by the Secured Party.  
Captions in this Agreement are for reference and convenience only and shall 
not affect the interpretation or meaning of any provision of this Agreement.

                                    -13-

<PAGE>

          IN WITNESS WHEREOF, the Grantor has caused this Security Agreement 
to be duly executed and delivered by its officer thereunto duly authorized as 
of the date first above written.

                                      TECH SQUARED INC.

                                      By                         
                                        -----------------------------

                                      Title                      
                                            -------------------------

Address for Grantor:
Tech Squared Inc.
5198 west 76th Street
Edina, MN  55439
Grantor's Tax ID # 41-1591872

Address for Secured Party :

First Bank National Association
2338 Central Avenue NE
Minneapolis, MN  55418
Fax:  (612) 782-1801

                                    -14-

<PAGE>

                               SCHEDULE I 
                                   to
                            Security Agreement
 

Locations of Equipment and Inventory 
as of Date of Security Agreement
 

5198 West 76th Street Edina, Hennepin County, Minnesota 55439



<PAGE>

                             SCHEDULE II
                                 to
                         Security Agreement


Trade Names and Trade Styles



Nu Design
Nu DesignPro
DTP Direct
Mirror
Airbourne
CD Rom Direct