<PAGE>
 
                                                                    EXHIBIT 10.1

                                                                        CONTRACT



                                                                   DM MANAGEMENT
                                                        TILTON OPERATIONS CENTER
                                                                                
<PAGE>
 
CONTRACT
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                               TABLE OF CONTENTS
                               -----------------

<TABLE> 
<CAPTION> 
Article      Title
-------      -----
<S>          <C> 
1.           CONTRACT DOCUMENTS
2.           CONTRACT PRICE
3.           TERMS OF PAYMENT
4.           INSURANCE AND BOND
5.           COMPLIANCE WITH LAWS AND REGULATIONS
6.           LIMITATION OF LIABILITY
7.           INDEMNITY
8.           PATENTS / COPYRIGHT INDEMNITY
9.           LIENS
10.          PURCHASER'S RIGHT TO TERMINATE CONTRACT
11.          DCS' RIGHT TO STOP WORK OR TERMINATE CONTRACT
12.          CHANGES IN THE WORK
13.          NON-DISCLOSURE
14.          SOFTWARE LICENSE
15.          FIRMWARE, LADDER DIAGRAM PROGRAMMING AND THIRD-PARTY SOFTWARE
16.          SCHEDULE
17.          FORCE MAJEURE
18.          DELAYS
19.          ITEMS PROVIDED BY PURCHASER
20.          SHIPPING
21.          INSTALLATION
22.          SYSTEM ACCEPTANCE TEST
23.          SYSTEM WARRANTY / LIMITED WARRANTY
24.          EQUIPMENT WARRANTY / LIMITED WARRANTY
25.          PURCHASER FURNISHED OR SPECIFIED ITEMS
26.          SPARE PARTS PROVISIONING
27.          ASSIGNMENT
28.          AGREEMENT NOT TO HIRE
29.          GOVERNING LAW
30.          HEADINGS
</TABLE> 
 
EXHIBIT A    CONTRACT PRICE SUMMARY
EXHIBIT B    PROJECT SCHEDULE, DATED 4/1/98 
EXHIBIT C    INSURANCE CERTIFICATE 
EXHIBIT D    REFERENCED LETTERS AND FAXES 
EXHIBIT E    EQUIPMENT LIST, DATED 4/1/98 
EXHIBIT F    FUNCTIONAL DESIGN DOCUMENT, DATED 4/8/98 


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DM Management                      Page -1-             Tilton Operations Center
April 1, 1998                                               DCS Project #98-7227
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THIS CONTRACT ("the Agreement") is entered into this 1st day of April, 1998,
between DM MANAGEMENT COMPANY, a Delaware corporation ("PURCHASER"), and
DESIGNED CONVEYOR SYSTEMS, INC., a Tennessee corporation with offices at 1805
Williamson Court, Brentwood, Tennessee 37027 ("DCS").

For and in consideration of the premises, and other good and valuable
consideration, PURCHASER and DCS (collectively, the "Parties" and individually,
the "Party") covenant and agree as follows:

ARTICLE 1   CONTRACT DOCUMENTS

A.   The contract between the parties hereto shall consist of the Agreement
     including the following documents (hereinafter called "Contract
     Documents"), which Contract Documents are incorporated herein by reference
     as if set forth word for word:


     1.     DCS Proposal #P-98-7227, dated January 14, 1998.

     2.     Conveyor Performance Requirements, by KSA, dated December 1997.

            2a.  Letter from KB Marshall to Ken Wood, dated December 19, 1997,
                 which modifies the package flow rate requirements of the
                 system.

            2b.  Fax from KB Marshall to Ken Wood, dated January 7, 1998, which
                 modifies the mezzanine height and conveyor support
                 requirements.

            2c.  Fax from KB Marshall to Ken Wood, dated January 18, 1998, which
                 clarifies the mezzanine surface as plywood (not concrete).

     3.     DM Management Control Systems Requirements Definition, by KSA, dated
            December 1997.

     In the event of any conflict between the terms of this document and the
     terms set forth in the DCS Proposal, the terms set forth in this document
     shall be controlling.

B.   This Agreement sets forth the terms and conditions governing this
     transaction.

C.   DCS agrees to fully perform all work set forth in this Agreement including
     the work set forth in the Contract Documents and changes made pursuant to
     this Agreement (the "Work") in a timely and workmanlike manner.

ARTICLE 2   CONTRACT PRICE


A.   The contract price for DCS' performance of the Work (the "Contract Price")
     is as defined in the Contract Documents Exhibit A - Contract Price Summary,
     payable in accordance with this Agreement, and assumes that DCS will be
     able to proceed on a continuous uninterrupted schedule and that PURCHASER
     will provide the items defined in ARTICLE 19 in a time frame that will
     permit DCS to complete the Work.

     The Contract Price shall include any design or equipment modifications or
     equipment needed to implement recommendations documented by H.K. Systems.

     In addition to the Contract Price, PURCHASER shall pay to DCS, when
     invoiced, the following:

     1.     Any additional cost agreed to in writing by Purchaser, including
            profit, for changes made by PURCHASER or its representatives after
            the Agreement date. Profit on any additions or deletions from the
            contract price will be calculated by taking the cost of the change
            and dividing by 0.85 (15% profit) for all items except those
            purchased from the controls subcontractor. Items purchased from the
            controls subcontractor will be calculated by taking the cost to DCS
 
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            and dividing by 0.90 (10% profit). DCS will credit against the
            Contract Price any reduced costs and profit resulting from such
            changes.

     2.     The costs of any Performance, Payment or Surety Bonds PURCHASER
            requires DCS to furnish.

     3.     Cost of any Federal, State or local sales, use or similar taxes on
            material, equipment or services to be supplied to PURCHASER pursuant
            to the terms of this Agreement for which DCS must collect and pay,
            unless PURCHASER furnishes valid tax exemption certificates, which
            are accepted by the taxing authority, on a timely basis.

ARTICLE 3   TERMS OF PAYMENT

A.   Payment shall be made to DCS as follows:

     1.     Twenty percent (20%) of the Contract Price shall be paid upon
            signing the Agreement.
 
     2.     Twenty percent (20%) of the Contract Price shall be paid on July 1
            (or the start of installation if sooner than July 1), provided the
            Approval Drawings, the Functional Design Document, and the
            Acceptance Test Plan have been submitted to and approved by
            PURCHASER.

     3.     Forty percent (40%) of the Contract Price shall be paid on August 1
            (or thirty days after the start of installation if installation
            starts sooner than July 1), provided the installation is progressing
            in a manner acceptable to PURCHASER and all equipment has been
            delivered to the site.

     4.     Fifteen percent (15%) of the Contract Price shall be paid upon the
            successful completion (sign-off) of the stand-alone Conveyor System
            Acceptance Test.

     5.     The remaining five percent (5%) of the Contract Price shall be due
            upon successful completion of the System Integration Testing
            (operation under the control of the Warehouse Management System).
            Payment shall be due and payable within ten (10) days after System
            Integration Testing has been successfully completed. Provided DCS's
            obligations for System Integration Testing have been met, final
            payment will be made not later than December 31, 1998.

B.   Invoices not paid within thirty (30) days from the date of receipt of
     invoice shall bear annual interest at two percent (2%) over the then
     current composite U.S. Commercial Bank Prime Rate as reported in The Wall
     Street Journal, for each day late.

C.   Adjustments for approved change orders will be made on each invoice so that
     the percentage of the contract value remaining unpaid after the invoice
     will be based on the change-adjusted Contract Price.

D.   In the event that DCS is responsible for PURCHASER's inability to utilize
     the system or portions thereof, DCS will pay PURCHASER liquidated damages
     as outlined in the following table. These liquidated damages are
     PURCHASER's sole remedy for any delays resulting from DCS's work.

     Receiving, Stocking and Returns (100, 200, 300, 500, 600 Series Conveyors):
     October 15, 1998
     Pick, Pack, and Ship (100, 200, 300, 400, 500, 600, 700 Series Conveyors):
     November 15, 1998

     If DCS is responsible for these functions not being available on the dates
     shown, DCS will pay PURCHASER liquidated damages in the amount of $1,500
     per day, up to a maximum of 1% of the Contract Price.

     If the Site Availability Date extends beyond July 1, 1998 or if there are
     any delays in the work that are outside DCS's reasonable control, the
     damages dates will be extended as described in ARTICLE 18.

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ARTICLE 4   INSURANCE AND BOND

A.   DCS will show evidence of insurance as follows, and agrees that such
     insurance shall be maintained until the Work is completed.

     1.     Statutory Workman's Compensation Insurance, including Employer's
            Liability Insurance with per occurrence coverage of at least
            $500,000.

     2.     Umbrella liability coverage for $3,000,000 per occurrence.

     3.     Comprehensive General Liability Insurance, including Contractor's
            Protective and Completed Operations, covering bodily injury and
            property damage with a combined single limit of $1,000,000.

     4.     Comprehensive Automobile Personal Injury Liability and Property
            damage Liability Insurance covering owned and non-owned vehicles
            with a combined single limit of $1,000,000.
            
B.   DCS will furnish to PURCHASER Certificates of Insurance evidencing the
     above coverages, with PURCHASER named as additional loss payee under such
     insurance, which shall provide that said coverages will not be canceled
     without thirty (30) days prior written notice to PURCHASER.  The
     Certificates of Insurance shall provide that the insurer waives its rights
     of subrogation against PURCHASER as respects work performed by DCS under
     contract with PURCHASER.  This waiver shall not apply to injury or damage
     arising out of the PURCHASER's sole negligence.

C.   PURCHASER shall maintain Fire, Extended Coverage (including without
     limitation) Theft, Vandalism and Malicious Mischief Property Damage
     Insurance upon the system and on all structures, machinery, equipment and
     supplies existing or being erected on the property of PURCHASER which are
     or will be incorporated into the Work in such amounts as PURCHASER shall
     reasonably determine and DCS its subcontractors and materialmen, shall be
     named as an additional loss payee under such insurance.  PURCHASER shall
     either, at PURCHASER's option, provide similar insurance for the perils of
     flood and earthquake or assume the risk of such perils on the same terms
     and conditions.

D.   PURCHASER waives its right of recovery against DCS, its subcontractors and
     materialmen, for any losses, including loss of use, to its existing plant
     or other property at the erection site resulting from fire, lightning,
     extended coverage perils, earthquakes, flood, vandalism and malicious
     mischief property damage, except to the extent that such losses are caused
     by DCS or its subcontractors or materialmen.

E.   DCS' price is based on the insurance coverage in the types and limits noted
     in ARTICLE 4-A and C above. In the event PURCHASER requires additional
     types or higher limits of insurance per Article 4-A, or does not furnish
     insurance coverage for perils per ARTICLE 4-C, thus requiring DCS to
     furnish Builder's (ALL) Risk Coverage to protect against such perils, DCS
     shall furnish same and be reimbursed by PURCHASER for such additional
     insurance cost.


ARTICLE 5   COMPLIANCE WITH LAWS AND REGULATIONS

A.   DCS agrees to comply with all Federal, State, and local laws and
     regulations that are applicable to the Work, as such are written and
     adjudicated on the date of this Agreement.

B.   DCS warrants that the Work, including the products, construction and design
     supplied by DCS will comply with the Occupational Safety and Health Act of
     1970 as written and adjudicated on the date of the Agreement.  DCS shall
     not be liable for any failure to so comply which results from the improper
     use or maintenance of the equipment, from alterations of the equipment by
     persons other than DCS, its 

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     subcontractors or agents, from absence of equipment or accessories that DCS
     has indicated to PURCHASER in writing are required to comply with OSHA but
     that are nevertheless omitted at PURCHASER's direction, from design or
     instructions furnished by PURCHASER or his agents after the date hereof and
     not approved by DCS, or from violations caused solely by combining DCS's
     equipment or system(s) with any equipment or system(s) furnished by others,
     including PURCHASER, except as contemplated by this Agreement, including
     Contract Documents, or approved by DCS after the date hereof.

C.   DCS' liability is limited to modification or replacement of the equipment
     furnished or at PURCHASER's option, return of the non-conforming equipment
     and refund of the cost of the non-conforming equipment.


ARTICLE 6   LIMITATION OF LIABILITY

In no event shall either party be liable to the other for any lost profits, or
other incidental or consequential damages with respect to the work irrespective
of the theory upon which any claim may be based, including without limitation,
breach of contract, failure of consideration, breach of warranty, tort, or
otherwise.

ARTICLE 7   INDEMNITY

A.   DCS expressly acknowledges it shall defend, indemnify and hold harmless
     PURCHASER, its agents and employees, from any and all third party claims,
     suits, losses, liabilities and expenses including reasonable attorneys'
     fees, provided that any such claim, suit, loss, or expense is attributable
     to bodily injury, sickness, disease or death, or injury to property
     (excluding loss of use thereof), which results from:  (a) negligence of DCS
     or its agents, employees or subcontractors, or (b) a defect in the design,
     material or workmanship of the Work, including equipment, software and
     system provided by DCS hereunder, or any portion thereof.

B.   PURCHASER expressly acknowledges it shall defend, indemnify and hold
     harmless DCS from any and all third party claims attributable to bodily
     injury, sickness, disease or death, or injury of property (excluding loss
     of use thereof) which results from (a) PURCHASER's failure to abide by the
     instructions contained in operation and maintenance manuals, safety
     literature and training classes furnished by DCS or; (b) unauthorized
     modifications to the system including use or combination of the Software
     Materials with non-DCS programs, data or equipment, or use of other than a
     current unaltered version of the Software Material except as contemplated
     by this Agreement, including Contract Documents, or approved by DCS after
     the date hereof.

ARTICLE 8   PATENTS / COPYRIGHT INDEMNITY


A.   DCS will defend, indemnify and hold harmless PURCHASER, its agents and
     employees from any and all third party claims, suits, losses, liabilities
     and expenses including reasonable attorneys' fees relating to any alleged
     infringement of any trade secret, and United States patent, any copyright
     or other intellectual property right of any DCS subcontractor arising out
     of the sale or use, in the form supplied by DCS, of equipment and software
     materials provided under this Agreement and used within the scope of
     Articles 14 or 15.

B.   DCS will assume no liability with respect to equipment or software neither
     supplied under this Agreement nor specified by DCS.

C.   PURCHASER will hold DCS harmless against any liability for infringement of
     any trade secret or United States patent or copyright involving PURCHASER's
     unauthorized use or combination of the software materials with non-DCS
     programs, data, or equipment not furnished hereunder or otherwise provided
     by DCS.

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D.   The party assuming liability shall be notified promptly of any assertion of
     infringement and shall have the absolute control of the defense thereto,
     including the right to settle, defend against legal action, or make changes
     in the work to avoid infringement, provided that after any such changes the
     specifications for any replaced item and for the system as a whole continue
     to be met.

ARTICLE 9   LIENS

DCS shall defend and hold PURCHASER harmless from any mechanic's or
materialmen's or other liens asserted against PURCHASER's property which are
based upon DCS's nonpayment of any of its obligations or otherwise arise out of
the performance of the work.  In the event that such a lien is filed, DCS shall
immediately procure the discharge thereof at its own cost and expense.

ARTICLE 10  PURCHASER'S RIGHT TO TERMINATE CONTRACT

PURCHASER shall have the right to terminate the Agreement for the following
specific reasons:

A.   Either actual or anticipated insolvency, bankruptcy reorganization,
     liquidation, or assignment for the benefit of creditors of DCS.

B.   Failure of DCS to comply with material provisions of the Agreement, unless
     DCS begins correcting such failure within seven (7) calendar days after
     receipt of written notification and corrects such failure within 90 days.
     In the event PURCHASER elects to terminate DCS' performance and have the
     remaining Work completed by others, PURCHASER may procure upon such
     commercially reasonable terms and in such manner as PURCHASER may deem
     appropriate, equipment and services similar to those terminated, and DCS
     shall be liable to PURCHASER for any reasonable excess costs for such
     similar equipment or services, provided that DCS' liability to PURCHASER
     shall not exceed the Contract Price less the actual cost of equipment and
     services provided.

C.   For PURCHASER's convenience, but in such event DCS shall be compensated for
     all work performed and costs incurred and profit at the rates described in
     ARTICLE 2, paragraph A1, provided that such charges shall not be greater
     than 100% of the Contract Price.

D.   If this Agreement is terminated as provided in Article 10, PURCHASER, in
     addition to other rights provided in this Agreement, may require DCS to
     transfer title and deliver to PURCHASER, in a manner and to the extent
     directed by PURCHASER, any equipment, components and software materials,
     and such materials, parts, tools, dies, jigs, fixtures, plans, drawings,
     information and contract rights, or other manufacturing materials, as DCS
     has specifically produced or specifically acquired for the performance of
     this Agreement; in such event, DCS shall, upon direction of PURCHASER,
     protect and preserve property in possession of DCS in which PURCHASER has
     an interest.  Payment for such equipment, components and other property
     delivered to and accepted by PURCHASER shall be at the price specified in
     this Agreement.  Payment for any manufacturing materials delivered to and
     accepted by PURCHASER and for the protection and preservation of property
     shall be in an amount agreed upon by DCS and PURCHASER.

ARTICLE 11  DCS'S RIGHT TO STOP WORK OR TERMINATE CONTRACT


DCS shall have the right to terminate the Agreement before payment of the final
installment of the Contract Price for the following specific reasons:

A.   Either actual or anticipated insolvency, bankruptcy, reorganization,
     liquidation, or assignment for the benefit of creditors of PURCHASER.

B.   Failure of PURCHASER to comply with material provisions of the Agreement,
     unless PURCHASER corrects such failure within a reasonable period of time
     after written notification; or if PURCHASER fails 

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     to pay DCS any sum not in dispute when due and such failure continues for a
     period of seven (7) calendar days after receipt of written notice
     respecting such failure is given by DCS to PURCHASER.

C.   If PURCHASER suspends or delays DCS' performance for a period of sixty (60)
     days, then DCS may stop work and terminate this Agreement and recover from
     PURCHASER the value of the Work performed, which shall include all costs
     and profit at the rates described in ARTICLE 2, paragraph A1, provided that
     such charges shall not be greater than 105% of the Contract Price.

ARTICLE 12   CHANGES IN WORK

A.   PURCHASER may make changes in the general scope of the Work, including
     drawings, designs, specifications, method of shipment, schedule, or place
     of delivery, require additional Work or direct the omission of Work or
     require the working of overtime.  If such change causes an increase or
     decrease in the cost of, or the time required for, the performance of the
     Work, an equitable adjustment to reflect this shall be made and the
     Agreement shall be modified accordingly.

B.   Alternatively, the parties authorized representatives may verbally agree
     (which shall be confirmed in writing within 5 days) that DCS should
     commence work on a scope of Work change prior to the issuance of a change
     order, in which event DCS will be paid for Work performed under the change
     ordered on the basis of actual costs incurred plus profit (at the rates
     described in ARTICLE 2, paragraph A1) and the delivery schedule shall be
     adjusted commensurate with the time required to perform the change.

C.   DCS shall not be authorized or required to proceed with any change without
     PURCHASER'S prior written approval.

D.   Payment terms for changes in Work shall be per the terms as outlined in
     Article 3.

ARTICLE 13   NON-DISCLOSURE

A.   All technical and other information furnished by PURCHASER shall be used by
     DCS, its employees, and agents only for the purpose of performing the Work.
     Such technical and other information shall not be disclosed to a third
     party, except to subcontractors and suppliers as necessary for work
     performance, without PURCHASER's written consent.  Title to and ownership
     of all such technical and other information shall remain with the
     PURCHASER. DCS agrees to require its employees, agents, subcontractors and
     suppliers to be familiar with the non-disclosure requirements and to
     observe same.

B.   All technical information, including software materials, furnished by DCS
     during the performance of the Work will be solely for the PURCHASER's use
     in operating and maintaining the system provided by DCS.  Such technical
     information shall not be disclosed to a third party without DCS' prior
     written consent.  Title to and ownership of all such technical data shall
     remain with DCS.  PURCHASER agrees to require its employees to be familiar
     with the non-disclosure requirements and to observe same.

C.   PURCHASER and DCS further agree to maintain all business information
     furnished in connection with this Agreement confidential and not to
     disclose such information without the prior written consent of the other.

D.   These obligations of limited use and non-disclosure shall not apply to the
     extent that such information:

     1.   Is generally known to companies in the disclosing party's business;

     2.   Is lawfully obtained by the receiving party without restriction on
          disclosure;

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     3.   Is known to the receiving party prior to receipt from the disclosing
          party without restriction on disclosure;

     4.   Is independently developed by the receiving party without use of
          information provided by the disclosing party; or

     5.   Is required to be disclosed by the receiving party pursuant to law or
          regulation.

ARTICLE 14   SOFTWARE LICENSE

A.   Pyramid Control Systems (DCS's subcontractor) grants to PURCHASER a non-
     assignable, nonexclusive, non-transferable, perpetual license to use
     software materials at a single, specific site location.  This license
     covers multiple CPU's within the building, as well as one CPU located
     outside the building whose purpose is to remotely maintain the system. In
     the event that PURCHASER sells the system to another company for use in the
     existing building, the software license will be assigned and transferred to
     the new owner provided that DCS is notified in writing within thirty (30)
     days of the transfer.  Or, if PURCHASER or any permitted transferee moves
     the system to another facility for use by PURCHASER or any permitted
     transferee, the license will transfer to the new facility provided that the
     software is not in use at any previous facility and that DCS is notified in
     writing within thirty (30) days of the transfer.  Software materials
     include the Pyramid-developed system software, including object code and
     executable code, and system operations documentation.

B.   PURCHASER may copy the software materials in whole or in part for its
     internal use for the purpose of maintenance trouble shooting and
     modification.  Furthermore, PURCHASER agrees to maintain records of the
     number and location of all such copies.  The original and all copies shall
     remain the property of Pyramid Control Systems.  PURCHASER agrees to
     reproduce and incorporate Pyramid's proprietary notices in/on the Software
     Materials.

C.   Neither party may terminate this software license at any time without
     mutual consent.

D.  Pyramid warrants that the system provided is Year-2000 compliant.

E.   During the warranty period, and for the period of time afterward that
     PURCHASER maintains or initiates a software service contract with Pyramid,
     Pyramid agrees to support the system in a manner acceptable to PURCHASER,
     which is generally defined as responding to service requests within the
     following timeframes:
     .    Critical (system is down, unable to process packages from packing to
          shipping, or system unable to properly communicate to or from PkMS): 2
          hours
     .    Major (problem allows goods to be packed and shipped, but causes
          significant operational work-around): 6 hours
     .    Routine (problem causes an annoyance, however it does not impact
          operations): 72 hours
     .    Changes (changes requested that are outside the scope of this
          contract): to be mutually agreed upon.

     Pager support is available for after hours support, however pages are not
     always delivered at the time they are sent (examples would include the
     person being on an airplane or in an area that is not covered by the
     nationwide services subscribed to by Pyramid).  For that reason, Pyramid
     will deliver to PURCHASER, prior to system acceptance, a list of contacts,
     pager numbers, and phone numbers to use in the event of a Critical or Major
     problem.  It will be PURCHASER's responsibility to page or call appropriate
     contacts within Pyramid until a response is confirmed, up to one call for
     each number on the list.

     Provided that PURCHASER uses the paging and phone procedure outlined in the
     previous paragraph, if Pyramid fails to support the software as defined
     earlier in this section, PURCHASER will notify 

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     Pyramid (and copy DCS) in writing of the nature of the service deficiency.
     If PURCHASER is not currently on a service contract at that time, PURCHASER
     agrees to start a minimum 12-month service contract that will commence at
     the time the letter is sent. Pyramid will then be "on probation" for a
     period of three months, at which time all reasonable calls for service must
     be responded to within the agreed-upon timeframes. During the probation
     period, if Pyramid fails to provide the agreed upon service level two times
     without providing reasonable explanation, the Pyramid-developed source code
     utilized on this project will be delivered to PURCHASER for their sole use
     at a single facility.

     Pyramid will use their best efforts to support the system and PURCHASER
     will use their best efforts to maintain the system and troubleshoot
     problems.  If it is found that a majority of service calls are the result
     of poor maintenance or problems that could have reasonably been diagnosed
     and corrected by PURCHASER's personnel, then PURCHASER will use fair
     judgement when deciding whether to place Pyramid on probation.

F.   Fees for the different service contract options will be at the following
     rates through 1999, which include up to five hours per month of phone
     support.
     .    $550 per month for 8:00 am to midnight, weekdays (non holiday)
     .    $670 per month for 24 hours per day, weekdays (non holiday)
     .    $780 per month for 24 hours per day, 7 days per week, 365 days per
          year
          
     If a service contract is purchased and in effect, hourly rates for support
     will be $78 per hour (business hours) or $95 per hour (after hours) through
     1999.  Service contract monthly and hourly rates will escalate at an annual
     rate equal to the percentage increase in the Revised CPI for all U.S. Urban
     Consumers.

     If a service contract is not purchased or in effect, software support is
     available after the warranty period for $95 per hour (business hours) or
     $135 per hour (after hours) through 1999.  These rates will escalate at a
     rate not more than an annual rate equal to the percentage increase in the
     Revised CPI for all U.S. Urban Consumers.

G.   The Pyramid-developed source code utilized on this project will be placed
     in escrow.  If Pyramid goes out of business or for any other reason decides
     to stop support of the system, Pyramid will notify DCS in writing of such
     decision.  DCS will then take ownership of the source code and will provide
     a copy at no charge to PURCHASER for their internal use in support of this
     system.

DCS represents and warrants that it has the authority to grant the license set
forth in this Article 14 on behalf of Pyramid Control Systems and agrees to
cause Pyramid Control Systems to execute a written confirmation of such license
grant if requested by PURCHASER.

ARTICLE 15  FIRMWARE, LADDER DIAGRAM PROGRAMMING AND THIRD-PARTY SOFTWARE

A.   All firmware, ladder diagram programming and documentation developed or
     furnished by DCS and its subcontractors under the Agreement is provided to
     PURCHASER under a license granted for use on a single system and may be
     modified or copied only for internal use for the purpose of maintenance,
     trouble shooting and modification.  PURCHASER shall not provide or
     otherwise make any portion in any form available to any third party without
     the prior written approval of DCS.

B.   DCS will obtain the right to use third party-supplied software furnished by
     DCS, which may be necessary for the development and operation of the
     system.  This software and its license Agreement will, in accordance with
     DCS' Agreement with supplier(s), be transferred to the PURCHASER upon
     system acceptance or at an appropriate time agreed by PURCHASER and DCS.

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ARTICLE 16   SCHEDULE

The Work is to be performed in accordance with the schedule reflected in Exhibit
C, except as modified pursuant to ARTICLES 11, 12, 17 and 18.

ARTICLE 17   FORCE MAJEURE

Neither DCS nor PURCHASER shall be liable for delays in delivery or inability to
perform or complete the Work due to causes beyond its reasonable control or acts
of God, acts of the public enemy, civil or military police authorities, strikes,
epidemics, war or riot.  In the event of such delays, the time of performance
shall be extended for a period equal to the time lost by reason of the delay,
plus additional time required for rescheduling and implementing a resumption of
work.  Both parties shall bear their own expenses from the initiation of Force
Majeure.  This provision shall not relieve DCS or PURCHASER from using
reasonable efforts to continue performance whenever such causes are removed.
Nothing herein shall be construed as requiring DCS or PURCHASER to accede to any
demands of labor, or labor unions, or suppliers or their parties which DCS or
PURCHASER consider unacceptable.  DCS or PURCHASER shall promptly notify the
other party when such delays occur or impending delays are likely to occur and
shall continue to advise of changes thereto.

ARTICLE 18  DELAYS

If DCS is delayed and is unable to perform or complete the Work as planned by
reason of acts or failures to act which are within the control of PURCHASER,
PURCHASER'S representatives or other contractors to PURCHASER, including delay
in approval of drawings and furnishings of necessary information or items
defined in ARTICLE 19, then the time for performance shall be extended by a
period equal to the time lost on account of any such cause, plus additional time
required for rescheduling and resumption of the Work, and any increased costs
incurred by DCS, plus profit, on account thereof shall be reimbursed by
PURCHASER as defined in ARTICLES 2 and 12.

ARTICLE 19  ITEMS PROVIDED BY PURCHASER

PURCHASER shall provide and pay for the services, equipment and/or facilities as
outlined in the Scope of Work section of DCS's Proposal.

ARTICLE 20  SHIPPING

Delivery will be provided as described in the Agreement.

ARTICLE 21  INSTALLATION

A.   During the entire time of installation, DCS will maintain a competent
     person at the erection site to superintend and direct the work and will:

     1.   Provide necessary erection equipment and personnel to erect and
          construct the system.  The majority of mechanical installers working
          on the job site will be employed full time by DCS.  The electrical
          installation crew will include at least three installers who are
          experienced in conveyor systems wiring and are employed full time by
          DCS, Pyramid Control Systems, or one of DCS's or Pyramid's normal
          sources for field wiring.

     2.   From time to time during the course of erection, cleanup and remove
          from the immediate premises any waste material and debris resulting
          from the work hereunder, and deposit it at an agreed location on
          PURCHASER's premises for further disposal by PURCHASER.

B.   In the course of performance hereof, DCS may employ the service of
     qualified subcontractors to the extent permitted by the Conveyor
     Performance Requirements identified in Article 1-A-2.  DCS shall 

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     cause any subcontractor used to install the system to enter into agreements
     requiring it to comply with the terms and conditions of this Agreement. DCS
     shall be fully responsible for all performance by its subcontractors, and
     the delegation of any obligation hereunder shall not relieve DCS of its
     primary obligation to PURCHASER. If PURCHASER reasonably objects to any of
     DCS's non-union subcontractors, DCS will endeavor to replace the
     subcontractor with another. Any additional cost (plus profit) or delays
     associated with the substitution will be the responsibility of PURCHASER.

C.   Upon completion, DCS shall remove its equipment and surplus material from
     the erection site.

ARTICLE 22  SYSTEM ACCEPTANCE TEST AND INTEGRATION TESTING

A.   PURCHASER shall furnish at its expense sufficient operating personnel,
     equipment, supervision, material specified to be handled, power and other
     utilities and facilities so that the system operation may be demonstrated
     without delay.  If PURCHASER fails to do so and as a result the System
     Acceptance Testing is not completed within 10 working days or the
     Integration Testing is not complete by December 31, 1998, the System shall
     be deemed complete for purposes of determining when payment(s) shall be
     due, as provided in ARTICLE 3.

B.   Testing will be performed in two phases.

     1.   Upon completion of the Installation and Debug, DCS will demonstrate
          that the System operates as defined in the Agreement, approved
          drawings and design documents. This test is referred to as the System
          Acceptance Test. The System Acceptance Test shall be developed by DCS
          and shall be subject to the approval of PURCHASER. Upon successful
          completion of the System Acceptance Test, PURCHASER will sign an
          acceptance notice and the Mechanical and Firmware portions of the Work
          shall be deemed accepted by PURCHASER, the warranty period will
          commence, and the System Acceptance Test milestone payment will be
          due.

          If the Test is not successfully completed, PURCHASER will provide
          written notice that details the location and nature of the failure.
          Absence of minor items of work or material, not adversely affecting
          the successful completion of the System Acceptance Test shall not be
          cause to delay acceptance, but DCS will remain responsible for
          completing items.  These items will be completed prior to PURCHASER's
          releasing the final payment.

     2.   Integration of the Conveyor System and WMS will occur after the
          successful completion of the System Acceptance Test. DCS's
          responsibility during the Integration Period will consist of assuring
          that the conveyor system is properly able to communicate to and accept
          communication from the WMS, as well as properly execute commands at
          the direction of the WMS. This test is referred to as the Integration
          Test. The Integration Test shall be developed by KSA. Upon successful
          completion of communication and function testing, PURCHASER will sign
          an acceptance notice and the Software portion of the Work shall be
          deemed accepted by PURCHASER and the final payment will be due.

          If the Integration Test is not successfully completed, PURCHASER will
          provide written notice that details the nature of the failure.  DCS
          will correct and, at the option of PURCHASER, either retest the failed
          items or rerun the Integration Test prior to PURCHASER's acceptance of
          the Software.

C.   If, after a reasonable effort, DCS cannot successfully complete the System
     Integration Test, a mutually agreeable settlement shall be made with
     PURCHASER in accordance with ARTICLE 23-B.

ARTICLE 23  SYSTEM WARRANTY/LIMITED WARRANTY

A.   DCS warrants that the System furnished will operate as defined in the
     Agreement, approval drawings 

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     and design documents, including any performance requirements which are a
     part of the Agreement, and will be adequate for the purposes stated herein
     if: (1) Properly operated and maintained; (2) the materials to be handled
     are of the type, size, shape, weight and other characteristics described in
     the Agreement and in a condition to be handled; (3) the attributes and
     characteristics of all data and information to be processed are as
     contemplated by the Agreement; (4) operating conditions and methods are as
     contemplated by the Agreement.

B.   This warranty shall apply for the same period as the Equipment Warranty set
     forth in ARTICLE 24, and is subject to the same notice requirements.  If
     any performance deficiency covered by this warranty is found in the system,
     DCS will be responsible for repairing, adjusting, modifying, replacing or
     adding to the system equipment.  If DCS cannot correct a deficiency in
     performance after reasonable effort, it shall make an equitable adjustment
     with PURCHASER based upon the performance actually achieved.  It is agreed
     that any equitable adjustment made hereunder shall not exceed the Contract
     Price, and shall be PURCHASER's sole remedy in the event DCS cannot correct
     the performance deficiency.

C.   This is a warranty of specified system performance and not a maintenance
     undertaking.  If a deficiency in performance is occasioned by the failure
     of individual parts or system components, DCS's responsibility shall be
     governed by the Equipment Warranty set forth in ARTICLE 24, unless it is
     found that the part or component was not reasonably suited for the
     particular system application, and failed for that reason.

D.   DCS shall not be liable for any operational or performance deficiency which
     results, in whole or in part, from (1) any modifications to the system by
     persons other than DCS, its subcontractors or agents; (2) absence of
     equipment, accessories or features that DCS has indicated to PURCHASER in
     writing are required for the system to operate properly but that are
     nevertheless omitted at PURCHASER's direction; (3) design or instructions
     furnished by PURCHASER after the date hereof and not approved by DCS; or
     (4) except as contemplated by this Agreement, including the Contract
     Documents, combining DCS' equipment or system(s) after System Acceptance
     with any equipment or system(s) furnished by others, including PURCHASER,
     without prior written consent of DCS.

E.   DCS shall be given reasonable access to make warranty repairs.

ARTICLE 24 EQUIPMENT WARRANTY/LIMITED WARRANTY
     
A.   DCS warrants that items supplied by DCS will conform to the Agreement,
     shall be suitable for the intended use, and shall be free of defects in
     design, material and workmanship at the time of acceptance of the work and
     for the periods defined below.

     1.   All parts supplied by HK Systems for the original system installation
          will be warranted for a period of two years from the date of the
          equipment's shipment to the site. On site support to repair defective
          parts will be available for one year from the date of System
          Acceptance.

     2.   All other parts supplied for the original system installation will be
          warranted for a period of one year from the date of System Acceptance.

B.   THERE ARE NO WARRANTIES WITH RESPECT TO THE EQUIPMENT, EXCEPT OF TITLE AND
     NON-INFRINGEMENT, EXPRESSED OR IMPLIED, INCLUDING WARRANTIES OF
     MERCHANTABILITY OR FITNESS FOR ANY PURPOSE EXCEPT AS EXPRESSLY SET FORTH IN
     THIS ARTICLE.

C.   DCS' liability for breach of warranty or otherwise is limited to the
     following actions:

     1.   Structural members: Defective of non-conforming structural members
          will be repaired or


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          replaced by DCS at PURCHASER's site.

     2.   Items of DCS' design or manufacture: Defective components will be
          repaired or replaced at PURCHASER's site.

     3.   Defective material or workmanship for computer hardware, peripherals,
          software developed by third parties or other items not designed or
          manufactured by DCS, which are incorporated into the system, shall be
          repaired or replaced when same are returned to DCS or a location
          designated by DCS, F.O.B. PURCHASER's Site.

     4.   Pyramid Control Systems and DCS-developed software: Pyramid Control
          Systems and DCS developed software is warranted to perform in
          accordance with the mutually approved Software Functional Design
          Specification.  DCS' liability for defects is limited to the
          correction of demonstrable defects that are defined and documented by
          the PURCHASER.

     5.   DCS-developed firmware: DCS' liability for defects is limited to the
          correction of demonstrable defects that are defined and documented by
          PURCHASER.

D.   DCS shall be relieved of any obligations under the foregoing warranty as to
     any items which: (1) Have not been properly maintained or are not
     maintained to the current support level in accordance with DCS' and
     manufacturer's recommended procedures and written instructions; (2) have
     not been operated in accordance with DCS' or manufacturer's recommended
     procedures and written instructions; (3) have been modified by persons
     other than DCS, its subcontractors or agents (except when prior approval
     has been granted by DCS); (4) differ from the operating conditions and
     methods contemplated by the Agreement.

E.   DCS shall be given access to make warranty repairs.

F.   PURCHASER shall notify DCS in writing of all warranty claims, defining the
     nature and extent of the defect.

G.   DCS shall not be required to provide labor for minor repairs that PURCHASER
     estimates will require less than four (4) man-hours of repair time and are
     within the technical expertise of PURCHASER.  Repairs of a recurrent and/or
     habitual nature shall be considered the responsibility of DCS, even though
     individual occurrences may be less than four (4) man hours to repair.  DCS
     further agrees to repair or replace at DCS's cost any property, equipment
     or fixtures DCS may affect or disturb in making repairs.

H.   DCS shall assign and transfer to PURCHASER all transferable warranties
     provided to DCS by the manufacturers or suppliers of equipment, machinery
     and other components used in the System.

ARTICLE 25 PURCHASER FURNISHED OR SPECIFIED ITEMS

If PURCHASER furnishes and requests DCS to use certain items in or in
conjunction with the system, the PURCHASER shall be solely responsible for
its/their sufficiency to accomplish their intended functions such as
performance, reliability and adequacy.

ARTICLE 26 SPARE PARTS PROVISIONING

Spare parts for the System will be procured by PURCHASER and made available to
DCS during the system start-up and acceptance testing phases of the project.
DCS will provide a recommended spare parts list to PURCHASER to facilitate
procurement of the spare parts.  In the event DCS utilizes any of the
PURCHASER's spare parts, DCS will replace that part at DCS' expense within ten
(10) working days for stock parts  non-stock parts will be replaced as quickly
as the manufacturer can provide the component.


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ARTICLE 27 ASSIGNMENT

Neither party shall assign the Agreement without the prior written consent of
the other party, except that PURCHASER may, upon notice to DCS and without
additional obligation, assign this Agreement, and all rights and licenses
granted hereunder, to an affiliate of PURCHASER or to any person or entity that
succeeds to that portion of the business of PURCHASER with which the System is
used.  If the parties agree to an assignment, then such assignment shall be
governed by these terms and conditions.

ARTICLE 28 AGREEMENT NOT TO HIRE

Through completion of the warranty period, neither party shall initiate the
hiring of any of the other party's employees without the prior consent of the
other party.

ARTICLE 29 GOVERNING LAW

The laws governing the interpretation and jurisdiction of the Agreement shall be
the laws of the State of New Hampshire.

ARTICLE 30 HEADINGS

The headings of the ARTICLES used in the Agreement are included for convenience
only and are not to be used in interpreting the Agreement.


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IN WITNESS WHEREOF, the parties have caused this Contract to be executed on the
day and year first above written, and do each hereby warrant and represent that
their respective signatories have been and are on the date of this Contract duly
authorized by all necessary and appropriate corporate action to execute this
Agreement.


DM MANAGEMENT COMPANY                           DESIGNED CONVEYOR SYSTEMS, INC.


By:/s/ KEVIN E. BURNS                           By:/s/ KENNETH E.B. WOOD
   ------------------------                            ----------------------

DATED 4/9/98                                    DATED 4/9/98    

Print Name: KEVIN E. BURNS                      Print Name: KENNETH E.B. WOOD
            ---------------                                 -----------------

Title: SVD/GM                                   Title: VICE PRESIDENT
       --------------------                            ----------------------   



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EXHIBIT A  CONTRACT PRICE SUMMARY

<TABLE>
<CAPTION>
<S>                                                                   <C>
Engineering & Project Management.....................................   $253,847
Mechanical Equipment.................................................  2,141,040
Mechanical Installation..............................................    801,860
Air Piping...........................................................    128,235
Freight..............................................................     97,832
Controls.............................................................    577,781
Field Wiring.........................................................    582,342
Outbound Control System (OCS)........................................    133,118

TOTAL CONTRACT PRICE................................................. $4,716,055
</TABLE> 

Pricing is based on the Contract Documents and the following drawings (included
in Contract Binder):

 .    Drawing MCL1000, Rev. I
 .    Drawing MCL1001, Rev. I
 .    Drawing MCL1002, Rev. I
 .    Drawing MCL1003, Rev. I
 .    Drawing MCL1004, Rev. I
 .    Drawing MCL1005, Rev. I
 .    Auto Bag Sorter Concept Sketch, dated 4/1/98


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DM Management                    Exhibits              Tilton Operations Center
April 1, 1998                                          DCS Project #98-7227