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                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") between ELTRAX SYSTEMS, INC. a 
Minnesota corporation having its principal place of business in Atlanta, 
Georgia ("Eltrax"), together with its subsidiaries (collectively, the 
"Company") and DON G. HALLACY, an individual residing in the State of Georgia 
("Employee"), is dated as of March 24, 1999.

                    ARTICLE 1:  EMPLOYMENT, DUTIES AND TERM

1.1   EMPLOYMENT POSITION.  Upon the terms and conditions set forth in this 
      Agreement, the Company hereby employs Employee as President and Chief 
      Executive Officer of Eltrax, and Employee accepts such employment.

1.2   DUTIES.

     (a)  Employee shall devote his full-business time and give his best efforts
          to the Company and to fulfilling those duties commensurate with his 
          position; provided, however, that Employee may serve as a director 
          for a company that does not compete with Eltrax, subject to the prior
          approval of the Eltrax Board of Directors, whose consent shall not be
          unreasonably withheld.

     (b)  Employee shall perform his duties in the best interests of the 
          Company, its employees and its shareholders.

     (c)  Employee shall comply with the Company's policies and procedures to 
          the extent they are not inconsistent with this Agreement, in which 
          case the provisions of this Agreement shall prevail.

1.3  TERM.  The term of Employee's employment shall commence on March 24, 1999
     (the "Employment Date"), and shall terminate on the later of March 31, 2003
     or the final day of the Severance Period (as defined in Section 3.2(b)(ii),
     unless earlier terminated pursuant to Article 3 of this Agreement.  
     Employee will assume his duties as President and CEO of the Company during
     April of 1999, on a date to be determined by the Eltrax Board of Directors.

              ARTICLE  2: BASE COMPENSATION, EXPENSES, AND BENEFITS

2.1  BASE SALARY.  For all services rendered under this Agreement during the 
     term of Employee's employment, the Company shall pay Employee, in 
     accordance with Eltrax's usual pay practices, a base salary, exclusive


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of benefits and bonuses, at an annual rate of Two Hundred Fifty Thousand 
Dollars ($250,000) (the "Base Salary").

2.2  BONUS.

     (a) In addition to the Base Salary, Employee will be entitled to an annual
         bonus (which shall not be less than zero) calculated as 2% of the 
         Company's net income (without taking into account amounts paid under 
         this Section 2.2(a)), as reported in the Company's Form 10-K (the 
         "Bonus").  Notwithstanding, for each of 1999 and 2000, Employee shall
         receive a minimum $100,000 Bonus and for the first three (3) months of
         2003, Employee shall receive an amount equal to the Bonus for such 
         year multiplied by 25%.  Company and the Employee agree that the 
         formula used to determine the Bonus shall be mutually reviewed on or
         within 120 days from the Employment Date.

     (b) The declaration and payment of the Bonus shall be made as soon as 
         practicable following the audit of the Company's annual earnings, but
         in no event later than April 15th of each year, and shall be paid in
         a lump sum to Employee, subject to applicable withholding rules.

2.3  OPTIONS.

     (a) Employee shall receive options (the "Bonus Options") issued under 
         the Eltrax Stock Incentive Plans (the "Option Plans") to acquire 
         500,000 shares of Eltrax common stock (the "Bonus Stock"), at an
         exercise price equal to the market price of such Bonus Stock on the
         Employment Date.  To the extent permitted under applicable law, the
         Bonus Options shall be characterized as incentive stock options under
         Section 422 of the Internal Revenue Code of 1986, as amended 
         (the "Code").

            (i) The Bonus Options shall vest, subject to Article 3, according
                to the following schedule: (A) 100,000 on the Employment Date,
                and (B) 100,000 on each successive yearly anniversary of the
                Employment Date.

           (ii) Provided termination of this Agreement has not occurred 
                pursuant to Sections 3.1(a) or 3.2(a), the Company guarantees
                that at March 31, 2003, or if earlier, the end of the Severance
                Period (as defined in Section 3.2(b)(ii)), the difference 
                between the Bonus Stock Fair Market Value (defined below) and 
                the aggregate exercise price of Employee's vested Bonus 
                Options will be no less than $1,305,000.  In the event such
                difference is less than $1,305,000, the Company will pay to 
                the Employee the amount of such deficiency (but in no event 
                more than


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                $1,305,000) as additional compensation, as soon as practicable
                following the calculation of such deficiency.  Bonus Stock
                Fair Market Value shall mean the average of the closing prices
                of Eltrax common stock on each of the five trading days
                preceding the day immediately prior to March 31, 2003, or if 
                earlier, the end of the Severance Period, multiplied by the 
                number of shares of Bonus Stock which may be acquired pursuant
                to exercise of Employee's vested Bonus Options.

     (b) During the first quarter of each year beginning in 2000, Employee 
         shall receive options to acquire a minimum of 50,000 shares of 
         Eltrax's common stock at the market price of such shares on such 
         issuance date (the "Performance Options").  To the extent permitted 
         under applicable law, the Performance Options shall be characterized
         as incentive stock options under Section 422 of the Code.  The 
         vesting of such Performance Options shall be based on standards of
         performance for the Employee and the Company determined by the
         Company's Board of Directors; provided, however, that vesting shall 
         not be delayed beyond March 31, 2003.

     (c) All aspects of the Bonus Options and the Performance Options shall be 
         governed by the terms and conditions of the Eltrax Option Plans, unless
         specific language regarding the treatment of such Options appears in 
         this Agreement.

2.4  BENEFITS.  In addition to other compensation, Employee shall be entitled 
     to participate in all benefit plans currently maintained or hereafter 
     established by the Company for the benefit of its executive officers 
     generally, in accordance with the terms and conditions of such plans (each
     a "Benefit Plan").  To the extent Employee is subject to any waiting period
     pending entry into a particular Benefit Plan, the Company will reimburse 
     Employee during such period for his actual COBRA costs, if any, under his 
     prior employer's group health plan.

2.5  VACATION.  Employee shall be entitled to twenty-five (25) paid vacation 
     days for each twelve (12) month period of employment, which if unused, 
     shall accrue ratably during each such period.

2.6  EXPENSES.  The Company shall reimburse Employee for all expenses 
     reasonably and necessarily incurred by Employee during the course and in 
     furtherance of his employment, subject to and made in accordance with such
     reasonable and nondiscriminatory policies and procedures as may be 
     established by the Company as applicable to its employees.

                         ARTICLE  3: EARLY TERMINATION


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3.1  TERMINATION FOR CAUSE.

     (a) The Company may terminate Employee's employment immediately for 
         Cause. For the purpose hereof, "Cause" means: (i) fraud against
         the Company; (ii) theft or embezzlement of the Company's assets,
         or misuse of Company funds; (iii) willful violation of law resulting
         in a felony conviction against the Company; (iv) Employee's conviction
         of any felony not in the Company's business; (v) a material breach of
         the terms and conditions of this Agreement not cured within thirty (30)
         days after written notice describing such breach; or (vi) the 
         continued failure by Employee to perform his duties under this 
         Agreement not cured within thirty (30) days after written notice 
         describing such failure.

     (b) In the event of termination for Cause pursuant to this section, none of
         Employee's unvested Bonus Options or Performance Options shall vest
         following the Termination Date set forth in a Notice of Termination 
         (as defined in Section 3.4(a)), and Employee shall receive through 
         such Termination Date, in accordance with the Company's usual pay 
         practices, the following:

            (i)   pay at the usual rate of Employee's Base Salary;

            (ii)  any accrued but unpaid Bonus relating to the prior calendar
                  year of employment;

            (iii) any benefits to which the Employee is entitled under any 
                  Benefit Plan; and

            (iv)  compensation for all accrued but unused vacation days, for
                  all periods under this Agreement, to be paid within 
                  thirty (30) days of termination, calculated by multiplying
                  the aggregate number of such days by a fraction, the
                  numerator of which equals the Base Salary and the 
                  denominator of which equals 260.

3.2  TERMINATION WITHOUT CAUSE.  Either Employee or the Company may terminate 
     Employee's employment without Cause by delivering to the other party 
     hereto, a Notice of Termination which specifies a Termination Date no 
     sooner than thirty (30) days following the date of such Notice. In the 
     event of termination of this Agreement and of Employee's employment 
     pursuant to this section, compensation shall be paid as described below:

     (a) If the termination is by Employee, Employee shall receive through the 
         Termination Date, in accordance with the Company's usual pay practices,
         each of the items listed in paragraphs (i) - (iv) of Section 3.1(b) 
         above, and 


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         none of Employee's unvested Bonus Options or Performance Options shall
         vest following such Termination Date.

     (b) If the termination is by the Company, or by the Employee with Good 
         Reason (as defined in Section 3.4(c)), Employee shall receive, in 
         accordance with the Company's usual pay practices:

            (i)   Each of the items listed in paragraphs (i) - (iv) of 
                  Section 3.1(b) above, through the Termination Date;

            (ii)  For a period of twelve (12) months following such 
                  Termination Date (the "Severance Period"):

                  (1) Employee's Base Salary;

                  (2) The Bonus applicable to the complete calendar year
                      which ends within the Severance Period, plus a pro-rata
                      share of the Bonus applicable to the subsequent calendar
                      year, calculated by multiplying the Bonus for such year 
                      by a fraction, the numerator of which shall equal the
                      number of days between January 1st and the final day of 
                      the Severance Period, and the denominator of which shall
                      equal 365; and

                  (3) Any benefits to which Employee is entitled under any 
                      Benefit Plan; provided, however, that Employee does not 
                      receive comparable benefits during such Severance Period
                      from another source.

            (iii) Until termination of the Severance Period, with respect to
                  Employee's Bonus Options and Performance Options, Employee
                  shall be treated as employed by the Company.  As a 
                  consequence, Employee's Bonus Options and Performance 
                  Options will continue to vest, in accordance with their
                  designated schedules, until the end of the Severance Period,
                  and such Options shall remain exercisable for a period of
                  three (3) months following the end of the Severance Period.
                  Following the Severance Period, no vesting of Employee's 
                  Bonus Options or Performance Options shall occur.

3.3  TERMINATION IN THE EVENT OF DEATH OR DISABILITY.   Employee's employment 
     shall terminate in the event of death or Disability of Employee.  
     "Disability" shall mean Employee's inability, as reasonably determined by
     the Eltrax Board of Directors, to perform the essential functions of his
     duties under this Agreement because of illness or incapacity for a 
     continuous period of six (6) months.  In the event of Employee's 
     termination due to death or Disability, Employee shall receive each of 


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     the items listed in paragraphs (i) and (ii) of Section 3.2(b) above, all
     unvested Performance Options and Bonus Options shall immediately vest, 
     and all such Options will remain exercisable through and including the
     end of the Severance Period, but in no event beyond such date.

3.4  DEFINITIONS:

     (a) "Termination Date" shall mean the effective date of termination 
         specified in a Notice of Termination; provided, however, that in the
         case of  Employee's death, the Termination Date shall be the date of
         such death, and in the case of Employee's Disability, the Termination
         Date shall be the date Eltrax provides written notice of such 
         Disability to Employee.

     (b) "Notice of Termination" shall include a written notice of termination 
         communicated to the other party hereto in accordance with Section 6.3
         hereof; provided, however, that such Notice shall only be effective 
         if it:

            (i)   indicates the specific termination provision in this Agreement
                  relied upon;

            (ii)  sets forth in reasonable detail the facts and circumstances
                  claimed to provide a basis for such termination, and

            (iii) states the effective date of termination.

     (c) "Good Reason" means:

            (i)   A material breach by the Company of the terms and conditions 
                  of this Agreement not cured within thirty (30) days after the 
                  Company's receipt of written notice describing such breach;

            (ii)  The removal of Employee as President or CEO of the Company, 
                  or Employee failing to be named as President and CEO of any
                  company (or its parent) which acquires more than 50% of the
                  outstanding stock of the Company; or

            (iii) Assuming no prior termination of this Agreement, for any 
                  reason, the failure of the Company on or prior to March 1,
                  2003, to offer Employee the opportunity to renew his 
                  employment for a period of twenty-four (24) months following
                  March 31, 2003, on the same terms as set forth in 
                  Sections 1.1, 2.1 2.6 (other than Section 2.3(a)), and 
                  Articles  3, 4 and 5 herein.


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              ARTICLE 4: CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT

4.1  CONFIDENTIALITY.  Employee will not, during the term or after the 
     termination or expiration of the term of employment, publish, disclose, 
     or utilize in any manner any Confidential Information (as hereinafter
     defined) obtained while employed by the Company.  If Employee leaves 
     the employ of the Company, Employee will not, without its prior written
     consent, retain or take away any drawing, writing or other record in any
     form containing any Confidential Information. "Confidential Information"
     means information or material which is not generally available to or used
     by others, or the utility or value of which is not generally known or
     recognized as standard practice, whether or not the underlying details are
     in the public domain, including:  (a) information or material relating
     to the Company, and its businesses as conducted or anticipated to be
     conducted, business plans, operations, past, current or anticipated 
     software, products or services, customers or prospective customers, or 
     research, engineering, development, manufacturing, purchasing, accounting,
     or marketing activities; (b) information or material relating to the
     Company's inventions, improvements, discoveries, "know-how," technological
     developments, or unpublished works, or to the materials, apparatus, 
     processes, formulae, plans or methods used in the development, manufacture
     or marketing of the Company's software, products or services; (c) any 
     information marked "proprietary," "private," or "confidential"; (d) trade
     secrets; (e) software in any stage of development, including source code
     and binary code, software designs, specifications, programming aids 
     (including subroutines and productivity tools), programming languages, 
     interfaces, visual displays, technical documentation, user manuals, data
     files and databases; and (f) any similar information of the type described
     above which the Company obtained from another party and which the Company
     treats as or designates as being proprietary, private or confidential,
     whether or not owned or developed by the Company.

4.2  BUSINESS CONDUCT AND ETHICS.  During the term of employment with the 
     Company, Employee will engage in no activity or employment which materially
     conflicts with the interest of the Company, and will comply with all 
     reasonable, nondiscriminatory Company policies and guidelines.

4.3  SURVIVAL.  The obligations of this Article 4 shall survive the expiration 
     or termination of Employee's employment.

                           ARTICLE 5: NON-COMPETITION

5.1  NON-COMPETITION.  Employee agrees that on and prior to the time he ceases 
     to provide services to the Company, or until the end of the 


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     Severance Period, if later:

     (a) Employee will not, directly or indirectly, alone or as a partner, 
         member, officer, director, shareholder or employee of any other firm
         or entity, engage in any commercial activity in competition with any
         part of the Company's business which was under Employee's management
         or supervision at any time during the term of this Agreement or any
         part of the Company's business with respect to which Employee has
         Confidential Information.  For purposes of this section, 
         "shareholder" shall not include beneficial ownership of less than
         five percent (5%) of the combined voting power of all issued and
         outstanding voting securities of a publicly held corporation whose 
         voting stock is traded in a public market;

     (b) Employee will not divert, or by aid to others, do anything which would
         tend to divert, or may divert from the Company, any trade or business
         with any customer, supplier or vendor with whom the Company has had 
         any contact or association; or

     (c) Outside the normal course of Employee's duties as President and Chief 
         Executive Officer, take any affirmative action to induce or attempt
         to induce any person employed by the Company to leave the employment
         of the Company.

5.2  ENFORCEMENT.  In addition to any other rights and remedies available to 
     the Company for breach of this Article 5, the Company shall be entitled
     to enforcement by court injunction.

5.3  EFFECT OF TERMINATION.  Upon the termination of Employee's employment, no 
     additional compensation shall be paid for the non-competition obligation.

                         ARTICLE 6:  GENERAL PROVISIONS

6.1  NO ADEQUATE REMEDY.  The parties acknowledge it is impossible to measure 
     in money the damages which will accrue to either party by reason of a 
     failure to perform any of the obligations under this Agreement.  
     Therefore, in the event of a claim for equitable relief, each party hereby
     waives the claim or defense that the other has an adequate remedy at law.

6.2  SUCCESSORS AND ASSIGNS.  Except as otherwise provided herein, this 
     Agreement shall be binding upon and inure to the benefit of the successors
     and assigns of the Company.  This Agreement shall not be assignable by the 
     Employee, but its economic terms shall inure to the benefit of the 
     Employee's heirs and beneficiaries.


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6.3  NOTICES.  All notices, requests and demands given to or made pursuant 
     hereto shall, except as otherwise specified herein, be in writing and be
     delivered or mailed to any such party at its address which:

     (a) In the case of the Company shall be:

         Eltrax Systems, Inc.
         2000 Town Center, Suite 690
         Southfield, Michigan 48075
         Attn: Clunet R. Lewis

     With a copy to:
         William E. Sider, Esq.
         Jaffe, Raitt, Heuer & Weiss, P.C.
         One Woodward Avenue, Suite 2400
         Detroit, Michigan 48226

     (b) In the case of Employee shall be:

         Don G. Hallacy
         4348 Granby Way
         Marietta, Georgia  30062

     Any notice, if mailed properly addressed, postage prepaid, registered or 
     certified mail, shall be deemed sent on the registered date or that 
     stamped on the certified mail receipt, and shall be deemed received on
     the second business day thereafter.

6.4  CAPTIONS.  The various headings or captions in this Agreement are for 
     convenience only and shall not affect the meaning or interpretation of 
     this Agreement.

6.5  GOVERNING LAW.  The validity, construction and performance of this 
     Agreement shall be governed by the laws of the State of Georgia without 
     giving effect to the conflict of laws principles thereof.

6.6  CONSTRUCTION.  Wherever possible, each provision of this Agreement shall 
     be interpreted in such manner as to be effective and valid under 
     applicable law. If any provision of this Agreement shall be prohibited or
     invalid, all remaining clauses shall remain fully enforceable.

6.7  WAIVERS.  No failure on the part of either party to exercise, and no 
     delay in exercising, any right or remedy hereunder shall operate as a 
     waiver thereof; nor shall any partial exercise of any right or remedy
     hereunder preclude any exercise of that or any other right or remedy
     granted hereby by law.

6.8  MODIFICATION.  This Agreement may not be and shall 


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     not be modified or amended except by written instrument signed by
     all parties.

6.9  ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement and 
     understanding between the parties hereto in reference to all the matters 
     herein agreed upon and supersedes all prior or contemporaneous agreements,
     understandings and negotiations with respect to the subject matter hereof.

6.10 ARBITRATION.  With the sole exception of the injunctive relief 
     contemplated by Section 5.2 of this Agreement, any controversy or claim 
     arising out of any aspect of the relationship of the parties hereto, will
     be settled by binding arbitration in Atlanta, Georgia by a panel of three 
     arbitrators in accordance with the Commercial Arbitration Rules of the 
     American Arbitration Association.  Judgment upon any arbitration award 
     may be entered in any court having jurisdiction thereof and the parties
     consent to the jurisdiction of the courts of the State of Georgia for 
     this purpose.

6.11 ATTORNEYS' FEES.  In the event there is litigation or other proceedings 
     between the parties hereto with respect to their rights and obligations 
     under this Agreement, the prevailing party in any such litigation shall 
     be entitled to recover from the opposing party all reasonable attorneys'
     fees and expenses (including fees of accountants) incurred by the 
     prevailing party in connection with such proceeding.

6.12 VENUE; JURISDICTION.  The parties agree that all actions or proceedings 
     arising in connection with this Agreement and the instruments, agreements
     and documents executed pursuant to the terms of this Agreement shall be
     tried, litigated and arbitrated only in the courts of the United States
     located in the Northern District of Georgia, the Georgia state courts or
     the offices of the American Arbitration Association located nearest 
     Atlanta, Georgia.  The Employee irrevocably accepts for himself and in
     respect of his property, generally and unconditionally, the jurisdiction
     of such courts.  The Employee irrevocably consents to the service of
     process out of any such courts in any such action or proceeding by the
     mailing of copies thereof by registered or certified mail, postage prepaid,
     to him, at his address as set forth in the records of the Company, such
     service to become effective ten (10) days after such mailing.  Nothing in
     this Section 6.12 shall affect the right of any party to serve process in
     any other manner permitted by law.  Employee irrevocably waives any right
     he may have to assert the doctrine of FORUM NON CONVENIENS or to object
     to venue to the extent any proceeding is brought in accordance with this
     Section 6.12.

6.13 HEADINGS.  The headings contained in this Agreement are for reference 
     purposes only and shall not in any way affect the meaning or interpretation
     of this Agreement.

6.14 INDEMNIFICATION.  The Company acknowledges that it has reviewed that 
     certain


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     Agreement Regarding Special Compensation and Post-Employment 
     Restrictive Covenants by and between Employee and Sprint Corporation 
     ("Sprint:"), dated December 12, 1995 (the "Sprint Agreement").  The
     Company agrees that:

     (a) The Company will, at its own cost and expense, defend Employee in all
         suits, claims or other actions brought by Sprint against Employee 
         which arise either directly, or indirectly, under or pursuant to 
         enforcement of the restrictive employment covenants contained in
         Section 12 of the Sprint Agreement; and

     (b) To the extent that after adjudication of the Sprint Agreement Employee
         is restricted from complying with the terms and conditions of this 
         Agreement (the "Injunctive Period"), Employee will continue to receive
         all compensation and associated benefits set forth herein as if such
         restrictions were not present; provided, however, that during the
         Injunctive Period Employee does not receive comparable compensation
         for services provided to persons other than the Company; and provided
         further, that to the extent permitted by law, Employee otherwise
         complies with the terms and conditions of this Agreement. 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
     duly executed and delivered as of the day and year first above written.

EMPLOYEE                               ELTRAX SYSTEMS, INC., together with
                                       its subsidiaries


                                       By:
                                          ----------------------------------
Don G. Hallacy                                   William P. O'Reilly
                                       Its:  Chief Executive Officer





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