DEFINITIVE PURCHASE AGREEMENT

                  AGREEMENT,  made this 2nd day of January  1998, by and between
MANCHESTER  EQUIPMENT CO., INC., a Corporation  organized and existing under and
by  virtue  of the laws of the  State of New  York,  with a  principal  place of
business at 160 Oser Avenue,  Hauppauge, New York 11788 (hereinafter referred to
as the "Purchaser or Manchester"),  BRUCE C. CLASING,  an individual residing at
1508 Ivy Hill Road,  Cockeysville,  Maryland  21030,  and HAROLD B. CLASING,  an
individual  residing at 20508 York Road, Parkton,  Maryland 21120,  (hereinafter
referred   to  as  the   "Seller"  or   "Sellers"   and/or   "Shareholder",   or
"Shareholders"),  COASTAL  OFFICE  PRODUCTS,  INC., a Corporation  organized and
existing  under the laws of the State of  Maryland,  with a  principal  place of
business at 3832 Falls Road, Baltimore,  Maryland 21211 (hereinafter referred to
as the "Company").

                              W I T N E S S E T H:

         WHEREAS,  the Company is the owner and  operator  of a computer  sales,
service and repair business  conducted at 3832 Falls Road,  Baltimore,  Maryland
21211 and the Seller and/or  shareholder are the sole  stockholders,  directors,
and chief  executive  officers in the Company,  and as such they  represent that
they hold such capital stock without charge or lien against it, and
         WHEREAS,   the   Sellers   and/or   Shareholders   have  made   certain
representations   and  warranties  as  to  the  "Company  Assets"  and  "Company
Liabilities" as more  particularly  defined in the within Agreement or Schedules
annexed thereto, and

                                       -1-

<PAGE>



         WHEREAS,  the Purchaser  desires to purchase one hundred (100%) percent
of the right,  title and interest of the Seller Shareholder in the capital stock
of the Company.

                  NOW,  THEREFORE,  in  consideration  of the sum of One ($1.00)
Dollar and other  good and  valuable  consideration,  receipt of which is hereby
acknowledged,  and the mutual  agreements  hereinafter  set forth,  the  parties
hereto agree as follows:

     Definitions:  The following terms shall have the meaning hereby assigned in
this Agreement as well as any other Agreement which is collateral hereto:

         "Assets"  means all right,  title,  and  interest  in and to all of the
assets of Coastal or the Company as set forth on Exhibit "A",  including  all of
its (a) real  property,  leaseholds and sub-lease  holds therein,  improvements,
fixtures,  and  fittings  thereon,  and  easements,   rights-of-way,  and  other
appurtenants thereto (such as appurtenant rights in and to public streets),  (b)
tangible  personal  property  (such as  machinery,  equipment,  Inventory),  (c)
intellectual property,  goodwill associated therewith,  the trade name including
"Coastal Office Products,  Inc.", licenses and sub-licenses granted and obtained
with respect thereto,  and rights  thereunder,  remedies  against  infringements
thereof,  and rights to  protection  of interests  therein under the laws of all
jurisdictions,  (d) leases,  sub-leases,  and rights thereunder, (e) agreements,
contracts, indentures,  mortgages,  instruments, security interests, guaranties,
other similar  arrangements,  and rights  thereunder,  (f) accounts,  notes, and
other receivables,  (g) securities,  if any, (h) claims, deposits,  prepayments,
refunds,  causes of action, choses in action, rights of recovery,  rights of set
off, and rights of recoupment  (including  any such item relating to the payment
of  Taxes),  (i)  franchises,   approvals,  permits,  licenses,   registrations,
certificates,  variances,  and similar  rights  obtained  from  governments  and
governmental  agencies,   (j)  books,  records,   ledgers,   files,   documents,
correspondence, lists, plats, architectural plans, drawings, and specifications,
creative materials, advertising and promotional materials, studies,

                                       -2-

<PAGE>



reports,  and other  printed or written  materials,  (k) any cash,  including  a
certain money market deposit  account having a present  principal value of Three
Hundred Seventy-eight  Thousand, One hundred ninety-one and 34/100 ($378,230.45)
Dollars,  (l) the corporate  charter,  qualifications  to conduct  business as a
foreign  corporation,  arrangements  with registered  agents relating to foreign
qualifications, taxpayer and other identifications numbers, seals, minute books,
stock transfer books, blank stock certificates,, and other documents relating to
the  organization,  maintenance,  and existence of the Company as a corporation;
(m) any of the rights of the Company under this Agreement.

     "Adverse  Consequences" means all actions,  suits,  proceedings,  hearings,
charges,  complaints,  claims,  judgments,  orders, decrees,  rulings,  damages,
penalties,  fines,  costs,  obligations,  liens,  losses,  expenses,  and  fees,
including court costs and reasonable attorneys' fees and expenses.

     "Affiliate"  has the  meaning  set forth in Rule  12b-2 of the  regulations
promulgated under the Securities Exchange Act.

     "Affiliated  Group" means any  affiliated  group within the meaning of Code
Sec.  1504(a) or any similar group  defined under a similar  provision of state,
local, or foreign law.

     "Cash" means cash and cash equivalents (including marketable securities and
short term  investments)  calculated in accordance  with GAAP applied on a basis
consistent with the preparation of the Closing Date Financial Statements.

     "Closing" has the meaning set forth in Paragraph "THIRD" below.

     "Closing Date" has the meaning set forth in Paragraph "THIRD" below.

     "Closing Date Financial  Statements" means the financial  statements of the
Company to be  prepared  by the  Company at its cost  reflecting  the  financial
condition  of the Company as of the day prior to the Closing  Date,  prepared in
accordance with GAAP and in accordance with the Company's

                                                        -3-

<PAGE>



previous  financial  statements and to be delivered to the Parties within ninety
(90) days of the Closing  Date and  accepted  by the Parties in writing.  In the
event of a dispute regarding the Closing Date Financial  Statements which cannot
be resolved by the Parties  within  fifteen (15) days of delivery of the Closing
Date  Financial  Statements,  the Closing  Date  Financial  Statements  shall be
reviewed by the Jericho,  New York office of KPMG Peat  Marwick,  which costs of
review shall be split equally by the Sellers and the Company.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Confidential  Information"  means any  confidential  business  information
concerning  the  businesses  and  affairs  of the  Company  that is not  already
generally available to the public.

     "Contingent  Payments" has the meaning set forth on Paragraph  "SECOND" (B)
below.

     "Controlled  Group of Corporations"  has the meaning set forth in Code Sec.
1563.

     "Employee  Benefit Plan" means the Coastal  Office  Products,  Inc.  Profit
Sharing Plan and the  Comprehensive  Standard  Health  Benefit  Plan,  Preferred
Provider Plan for Coastal Office Products,  Inc.  administered by Blue Cross and
Blue Shield of Maryland, Inc.

     "Employee  Pension  Benefit  Plan" has the  meaning set forth in ERISA Sec.
3(2)

     "Employee  Welfare  Benefit  Plan" has the  meaning set forth in ERISA Sec.
3(1).

     "Environmental,   Health,   and  Safety   Laws"  means  the   Comprehensive
Environmental  Response,  Compensation  and Liability Act of 1980,  the Resource
Conservation  and Recovery Act of 1976, and the  Occupational  Safety and Health
Act of 1970,  each as amended,  together with all other laws  (including  rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges  thereunder) of federal,  state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment,  public
health and safety,  or employee  health and safety,  including  laws relating to
emissions, discharges, releases, or threatened releases of

                                                        -4-

<PAGE>



pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials
or wastes into ambient air,  surface water,  ground water, or lands or otherwise
relating to the manufacture,  processing, distribution, use, treatment, storage,
disposal,  transport,  or handling of  pollutants,  contaminants,  or  chemical,
industrial, hazardous, or toxic materials or wastes.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended.

     "Extremely  Hazardous  Substance"  has the meaning set forth in Sec. 302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.

     "GAAP" means United States generally accepted  accounting  principles as in
effect from time to time.

     "Indemnified  Party" has the meaning set forth in the Indemnity  Agreements
annexed hereto.

     "Indemnifying  Party" has the meaning set forth in the Indemnity Agreements
annexed hereto.

     "Intellectual  Property" means (a) all inventions,  (whether  patentable or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
re-issuance,  continuations,  continuations-in-part,  revisions, extensions, and
re-examinations thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques, technical data, designs, drawings,

                                       -5-

<PAGE>



specifications,  customer and supplier lists, pricing and cost information,  and
business  and  marketing  plans  and  proposals),   (f)  all  computer  software
(including data and related  documentation),  (g) all other proprietary  rights,
and (h) all  copies  and  tangible  embodiments  thereof  (in  whatever  form or
medium).

         "Inventory" means all goods in process and finished goods, manufactured
and purchased parts and supplies and other items deemed  inventory in accordance
with GAAP in the operation of the Company's business.

         "Knowledge" means actual knowledge after reasonable investigation.

     "Liabilities"  means (a) all  Liabilities  of  Coastal  or the  Company  as
recorded on the November 30, 1997 balance sheet, and as adjusted for the passage
of time through the Closing Date in accordance with past custom and practice and
in the  ordinary  course of  business  of the  Company and to be recorded on the
Closing  Date  Financial  Statements,  and  subject to the  representations  and
warranties of Seller and the Company herein,  (b) all obligations of the Company
under the  agreements,  contracts,  leases,  licenses,  and  other  arrangements
referred to in the definition of Assets either (i) to furnish  goods,  services,
and other  non-Cash  benefits to another  party after the Closing of (ii) to pay
for goods, services, and other non-Cash benefits that another party will furnish
to it after the Closing,  (c) any  Liability of the Company for unpaid Taxes for
the Company's fiscal year ending December 31, 1997, and for periods prior to the
Closing  which were not due and payable  prior to Closing,  (d) any Liability or
obligation under any insurance policy,  health or medical or life insurance plan
of the  Company  in  effect  as of the  Closing  Date,  costs,  amounts  paid in
settlement,  losses,  expenses, or otherwise and whether such indemnification is
pursuant to any statute, charter documents,  bylaw, agreement, or otherwise, any
Liability of the Company for costs and expenses  incurred in connection with the
Agreement and the transactions contemplated hereby, any Liability

                                       -6-

<PAGE>



or obligation of the Company under this  Agreement,  any Liability or obligation
of the Company,  the Employee  Benefit Plan,  any Liability  resulting  from any
breach of contract, breach of warranty, tort infringement or violation of law.

     "Liability" means any liability (whether known or unknown, whether asserted
or un-asserted,  whether absolute or contingent,  whether accrued or un-accrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.

     "Manchester  Options"  means the  options to acquire  shares of  Manchester
delivered to Sellers in accordance with the employment agreements  substantially
in the form annexed hereto.

     "Multi-employer Plan" has the meaning set forth in ERISA Sec. 3(37).

     "Non Contingent Price" has the meaning set forth in Paragraph  "SECOND" (A)
below.

     "Ordinary  Course of  Business"  means  the  ordinary  course  of  business
consistent with past custom and practice (including with respect to quantity and
frequency),  excluded  therefrom is the  transaction  contemplated by the within
Agreement.

     "Party" has the meaning set forth in the preface above.

     "Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental  entity (or any department,  agency, or political  subdivision
thereof).

     "Pre-Tax  Profit"  shall  be  that  meaning  as  set  forth  in  and by the
"Employment  Agreement"  Paragraph  "SEVENTH",  which is  annexed  hereto  as an
Exhibit hereof.

     "Prohibited  Transaction"  has the meaning set forth in ERISA Sec.  406 and
Code Sec. 4975.

     "Purchase Price" has the meaning set forth in Paragraph "SECOND" below.

     "Reportable Event" has the meaning set forth in ERISA Sec. 4043.

                                       -7-

<PAGE>



     "Security Interest" means any mortgage, pledge, lien, encumbrance,  charge,
or other  security  interest,  other  than (a)  mechanic's,  material  men's and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer  is  contesting  in good faith  through  appropriate  proceedings,  (c)
purchase  money liens and liens  securing  rental  payments  under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.

     "Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary  thereof)  owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.

     "Tax" means any federal,  state, local, or foreign income,  gross receipts,
license, payroll,  employment,  excise, severance,  stamp, occupation,  premium,
windfall profits,  environmental  (including taxes under Code Sec. 59A), customs
duties,  capital stock,  franchise,  profits,  withholding,  social security (or
similar),  unemployment,  disability,  real property,  personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated, or other tax or any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

     "Tax Return" means any return,  declaration,  report,  claim for refund, or
information  return or statement  relating to Taxes,  including  any Schedule or
attachment thereto, and including any amendment thereof.

     "Third  Party  Claim" has the meaning set forth in  Paragraph  "EIGHTH" (d)
below.

FIRST:     SALE OF STOCK-   The Sellers  agree to sell,  transfer and assign one
hundred (100%) percent of the issued  outstanding  capital stock of the Company;
to wit:  One  Thousand  (1,000)  shares,  pursuant  to the terms and  conditions
hereinafter set forth.

                                       -8-

<PAGE>



SECOND:  PURCHASE  PRICE-  The  Purchaser  agrees to buy all of the  issued  and
outstanding  shares of the  capital  stock of Seller  constituting  one  hundred
(100%)  percent of all the issued and  outstanding  stock in the Company,  for a
price of  $4,661,524.60  subject to the conditions for "Contingent  Payments" in
favor of the Sellers or Purchaser  respectively in accordance with the following
terms and  conditions  except as modified by  Paragraph  "NINTH" of that certain
"Employment Agreement" which is an Exhibit hereto:

         A)       NON-CONTINGENT PAYMENTS:

     1)  $3,061,563.70  in cash payable by wire  transfer,  pursuant to Seller's
written instructions effected on January 5, 1998.

         B)       CONTINGENT PAYMENTS:
                  1)  $800,000.00  in cash due and  payable  in a lump sum on or
before March 15, 1999,  contingent upon the Company  achieving FYE98 projections
of $10 Million  gross in revenues and $1.3 Million in pre-tax  profits ("the FYE
98 projections").
                  2)  $800,000.00  in cash due and  payable  in a lump sum on or
before March 15, 2000,  contingent upon the Company  achieving FYE99 projections
of $11.7 Million in gross revenues and $1.5 Million in pre-tax profits ("the FYE
99 projections").
                  3) The  contingent  payments due and payable on March 15, 1999
and March 15, 2000 will be subject to the following conditions:

     a)   i. The contingent payment for fiscal year 1998 will be made in full if
the gross  revenue and pretax profit for fiscal year 1998 meet or exceed the FYE
98 projections.

          ii.  The contingent  payment for fiscal year 1999 will be made in full
               if the gross  revenue and pretax profit for fiscal year 1999 meet
               or exceed the FYE 99 projections.

                                                        -9-

<PAGE>



     b)    i.  The contingent  payment for fiscal year 1998 will be reduced by
forty (40%)  percent in the event gross  revenue or pretax profit for the fiscal
year 1998 is between  ninety  (90%)  percent and  ninety-nine  and 9/10  (99.9%)
percent of the FYE 98 projections.

           ii.     The contingent payment for  fiscal year 1999 will be reduced
by forty  (40%)  percent in the event  gross  revenue  or pretax  profit for the
fiscal  year 1999 is between  ninety  (90%)  percent  and  ninety-nine  and 9/10
(99.9%) percent of the FYE 99 projections.

   c)       i.      The contingent payment for fiscal year 1998 will be reduced
by sixty  (60%)  percent in the event  gross  revenue  or pretax  profit for the
fiscal year 1998 is between  eighty-five  (85%) percent and eighty-nine and 9/10
(89.9%) percent of the FYE 98 projections.

             ii.     The contingent payment for fiscal year 1999 will be reduced
by sixty  (60%)  percent in the event  gross  revenue  or pretax  profit for the
fiscal year 1999 is between  eighty-five  (85%) percent and eighty-nine and 9/10
(89.9%) percent of the FYE 99 projections.

    d)       i.      No contingent payment for fiscal year 1998 will  be made in
the event gross  revenue or pretax  profit for the fiscal year 1998 is less than
eighty-five (85%) percent of the FYE 98 projections.

             ii.     No contingent payment for fiscal year 1999 will  be made in
the event gross  revenue or pretax  profit for the fiscal year 1999 is less than
eighty-five (85%) percent of the FYE 99 projections.

      e)       i.      An additional cash payment of $250,000.00 will be due and
payable on March 15, 1999 for fiscal year 1998,  in the event that gross revenue
and pretax  profits for fiscal year 1998 exceeds the FYE 98  projections  by ten
(10%) percent or more.

                                      -10-

<PAGE>



                ii.     An additional cash payment of $250,000.00 will be due on
March 15,  2000 for fiscal  year 1999,  in the event  gross  revenue  and pretax
profits for fiscal year 1999 exceeds the FYE 99 projections by ten (10%) percent
or more.

         C) Purchaser may, at Purchaser's  sole option  substitute an equivalent
amount of Manchester  registered  stock for the contingent  cash payments due on
March 15, 1999 and March 15, 2000,  provided that the price of Manchester  stock
is at  least  Five  and  00/100  ($5.00)  Dollars,  per  share  on the  date the
contingent  payment  is due.  Any  stock  substituted  for the  contingent  cash
payments  will be  restricted  in the  respect  that  it will  not be able to be
redeemed until six (6) months after the date of issue.  The date of issue of any
stock  substituted  for a contingent  cash payment will be the date on which the
pertinent contingent cash payment was due.

         D) The Company shall cause a statement  showing a detailed  calculation
of Gross  Revenue and Pre-Tax  Profit to be  delivered to Sellers not later than
(i) March 15, 1999, in case of fiscal year 1998, (ii) March 15, 2000, in case of
fiscal  year 1999,  and (iii) March 15,  2001,  in case of fiscal year 2000 (the
"Performance  Statement").  Concurrent  with  the  delivery  of the  Performance
Statement,  the Treasurer shall certify to Seller that the Performance Statement
was calculated in accordance with the provisions of the within Agreement.

                  Seller shall have  reasonable  access to all  personnel of the
Company  and shall have the right to review all books,  accounting  records  and
other materials of the Company relevant to the preparation of the 1998, 1999 and
2000  Performance  Statements.  In addition,  the Company  shall use  reasonable
efforts to cause Seller to have reasonable access to all materials and personnel
of the Company involved in the preparation of such Performance Statements and to
be permitted to review the Treasurer's work papers regarding same.

                                      -11-

<PAGE>



                  In the event the Seller disagrees in any respect with the 1998
or 1999 Performance Statement,  the Seller shall deliver to the Company,  within
fifteen  (15) days  after the  delivery  by the  Treasurer  of such  Performance
Statement to the Seller,  a written  notice  specifying  the matters to which it
objects. The Company and the Seller thereafter endeavor in good faith to resolve
any disagreement or dispute concerning the Performance  Statement.  In the event
the  parties are able to resolve any such  disagreement  or dispute,  they shall
promptly  execute a document which sets forth the resolution of the disagreement
or dispute.

                  In the event the Company and the Sellers are unable to resolve
a disagreement  or dispute  concerning a Performance  Statement  within ten (10)
business  days, the  disagreement  or dispute shall be submitted to a nationally
recognized  firm of independent  accountants  (who shall not be the  Purchaser's
duly appointed  Auditors to be chosen by the Company and the Sellers;  provided,
that if the parties are unable to agree on such accountants within fourteen (14)
days of the end of the ten (10)  business  day period,  then the  parties  will,
within  seven  (7)  days of the end of the  fourteen  (14) day  period,  jointly
request that the  President of the American  Arbitration  Association  select an
accountant  with a nationally  recognized  accounting  firm who shall not be the
Purchaser's  duly  appointed  Auditors.  Upon  delivery  of a written  statement
setting  forth the  accountant's  determination  regarding the  disagreement  or
dispute,  and the effect of such conclusion on the Performance  Statement,  such
determination shall be final and binding upon the Company and the Seller without
any further right of appeal.

                  The accountant  selected to resolve a disagreement  or dispute
concerning a Performance Statement shall have reasonable access to all personnel
of the Company and shall have the right to review all books,  accounting records
and other materials  pertaining to the relevant  Performance  Statement that the
accountant shall request.

                                      -12-

<PAGE>



                  Fees and  expenses of the  accountant  selected to resolve any
disagreement or dispute concerning a Performance  Statement (a) shall be paid by
the  Seller  if,  notwithstanding  any  modifications  made  to the  Performance
Statement by the  accountant,  the Seller is not entitled to receive any greater
amount than he would have received if such  disagreement or dispute had not been
submitted  to the  accountant,  and (b)  shall be paid by the  Company,  if as a
result of modifications made to the Performance Statement by the accountant, the
Seller is  entitled  to a greater  amount  than he would  have  received  if the
disagreement or dispute had not been submitted to the accountant.

                  All  sums  due  the  Seller,   after  the  resolution  of  any
disagreement or dispute concerning a Performance Statement, shall be paid to the
Seller  within  five  (5)  days of the  date  following  which  the  Performance
Statement  is deemed final and shall bear  interest  from and after the original
date due, as provided elsewhere in the within Agreement,  until the date paid in
full at a rate  which is equal to the prime  rate  announced  by The Bank of New
York.  THIRD:  Closing - The Closing shall take place at the offices of Kressel,
Rothlein & Roth, Esqs., 684 Broadway,  Massapequa, New York 11758, Attorneys for
the Purchaser,  on or about January 2, 1998 with an effective date of January 1,
1998.

A) At the Closing, the Seller shall deliver to the Purchaser:

 1. Certificate -

     A  certificate  or  certification  dated the  Closing  date,  signed by the
Secretary of the Company setting forth:

     (a) The authorized, outstanding and unissued capital stock of the Company;

     (b) The names and addresses of the holders (of record and  beneficially) of
such authorized and outstanding stock, and the number of shares owned by each;

                                                       -13-

<PAGE>



     (c) The names and  addresses of all  directors and officers of the Company;
and

     (d) The  names of the  officers  authorized  to  execute  and  deliver  the
documents and related instruments deliverable hereunder.

2. Stock Certificates-

     Certificates  for the Seller's stock,  duly endorsed and with all necessary
documentary  transfer  tax  stamps  affixed  and  canceled.  The  Company  shall
thereupon  issue  new  certificates  representing  shares  to  be  delivered  to
Purchaser.

3. Corporate Records-

     The  complete  and  correct   corporate   minute  books,   Certificate   of
Incorporation,  By-Laws,  stock  certificates  and stock transfer records of the
Company,  and a  current  Certificate  of Good  Standing  issued by the State of
Incorporation,  with an  accompanying  certification  from the  secretary of the
Company attesting to said records being correct.

4. Resignations-

     The  written  resignations  of the  Sellers  as  officers  of the  Company,
effective upon consummation of the Closing.

5. Contracts-

     Originals  of any and all written  Contracts  entered  into by the Company,
which  are  presently  in  effect.  For  purposes  of this  provision  the  term
"Contracts"  shall  include any and all  agreements  between the company and any
other person or entity  involving a  consideration  paid or to be paid by either
such party in excess of $10,000.00 in value.



                                                       -14-

<PAGE>



6. Creditors-

     A Schedule of all accounts payable by the Company as of the date of Closing
which have accrued or been amended subsequent to the within agreement.

7. Indemnifications-

     At  Closing  Seller  will  deliver  indemnifications  in the form set forth
annexed hereto.

8. Schedule of Assets and Liabilities-

     A Schedule of any and all assets and liabilities as of the date of Closing.

9. General Releases-

     a) The Selling shareholders shall deliver releases to the Company in the
form annexed.

     b) The Release from the Broker in the form annexed.

10. A lease from BC and HC Properties, LLC to the Company in the form annexed.

         B)       At the Closing the Purchaser  shall deliver the following:
                  1) An Indemnity Agreement in the form annexed.

                  2) Copy of a letter of direction to the  Purchaser's  transfer
agent as to  grant  of  restricted  shares  as  required  under  the  Employment
Agreements referred to in Paragraph "FOURTH".

                  3)  Certificate  of  Resolution  of  the  Board  of  Directors
authorizing the within transaction.

                  4) An "Incentive Stock Option Agreement" as required under the
"Employment Agreement" referred to in Paragraph "FOURTH".

                                                       -15-

<PAGE>



         C) On or before January 5, 1998:
                  1) Appropriate wire transfers totaling Three Million Sixty-one
Thousand  Five Hundred  Sixty-three  and 70/100  ($3,061,563.70)  Dollars as per
Paragraph  "SECOND" A) 1).

 FOURTH:                  EMPLOYMENT  AGREEMENT-             Each of the selling
Shareholders and Coastal,  simultaneously with the Closing,  shall enter into an
Employment Agreement in the forms annexed hereto.

 FIFTH:                   BOOKS AND RECORDS-       All of the books and records,
including  but not  limited to  journals  and work  sheets,  tax  returns,  bank
statements,  accountant's records, daily diaries,  contracts and other materials
used for the operation of the Company  shall remain  intact at the Company,  and
shall not be removed  from the Company  offices  without the  permission  of the
Purchaser, except to the extent that same were delivered at Closing.

 SIXTH:     SELLERS  AGREEMENT TO PAY BROKER -       Each of the Parties  hereto
represents  and  warrants  that it has not  employed  any  broker  or  finder in
connection with this Agreement,  or the transaction  contemplated  hereby, other
than D.B.  Riley & Associates,  Inc. and agrees to indemnify the other Party and
hold it harmless from any and all  liabilities  (including,  but not limited to,
reasonable  Attorneys fees and disbursements and Court costs paid or incurred in
connection with any such liabilities) for brokerage commissions or finder's fees
in  connection  with this  Agreement  asserted  by any other  party  based  upon
arrangements  or agreements made or claimed to have been made by or in behalf of
such indemnifying party.

 SEVENTH: A. Pre-Closing Obligations-
            Parties hereby acknowledge and agree that the following has occurred
prior to or contemporaneous with the Closing:

                                                       -16-

<PAGE>



     1.1 Seller, Shareholder and Company has afforded to the Attorneys and other
authorized representatives,  free and full access during regular business hours,
to the books, records, personnel and properties of the Company.

     1.2 Purchaser has had the right to make copies of the general
ledger,  general journal,  cash receipts and disbursements books, purchase book,
accounts  receivable and accounts  payable records,  payroll  records,  canceled
checks,  bank  statements and copies of all city,  state and federal tax returns
filed by the Company.

     1.3 The Company's business was conducted only in the ordinary course.

     1.4 The Company has maintained in force its insurance policies
currently in effect as of the date hereof, except to the extent that they may be
replaced with equivalent  policies at lower rates approved by the Seller.  If in
the Purchaser's  opinion,  additional  coverage is reasonably  necessary to keep
adequately  insured  all  properties  of the  Company,  Seller  shall  cause the
Company, at the written request of the Purchaser,  and at the Company's expense,
to obtain  such  additional  insurance  from  financially  sound  and  reputable
insurers for a period ending no sooner than the close of business on the Closing
date.

     1.5 Without the prior written consent of the Purchaser,  no change has been
made in the Certificate of Incorporation or By-Laws of the Company.

     1.6 No Change has been made in the Company's authorized, issued
and outstanding  capital stock, and no options,  warrants,  rights or calls have
been granted with respect to any shares of such capital stock.

     1.7 No dividend or other  distribution or payment has been declared or made
in respect of any shares of the Company's stock.

                                                       -17-

<PAGE>



     1.8 No contract, commitment, or other business transaction has been entered
into or terminated by the Company without  Purchaser's  prior written  approval,
except such as are in the ordinary course of business.

     1.9 Except as expressly provided herein, the Company has not (i) mortgaged,
pledged  or  subjected  to  lien or any  other  encumbrance  any of its  assets,
tangible  or  intangible;  (ii)  sold or  transferred  any fixed  assets;  (iii)
canceled  any debts or claims  except  in each  case in the  ordinary  course of
business, or (iv) sold, assigned or transferred any patents,  trademarks,  trade
names, copyrights, licenses or other intangible assets.

     1.10  The  Company  has not  increased  compensation  to be paid or  become
payable to any officer, director,  employee or agent (except regular or periodic
increases),  nor enter into any purchase or sales Contract except in the regular
course of business, or made any material change in sales, marketing,  pricing or
distribution policies.

     1.11 The Company has maintained  its business and properties  substantially
intact,   including  its  present  operations,   physical  facilities,   working
conditions, and relationships with lessors, licensors, suppliers, customers, and
employees.

          B) Post-Closing Covenants-

          The Parties agree as follows with respect to the period following the
Closing:

          (a) General: In case at any time after the Closing any further
action is necessary  or  desirable to carry out the purposes of this  Agreement,
each of the Parties will take such further  action  (including the execution and
delivery  of  such  further  instruments  and  documents)  as  the  other  Party
reasonably may request, all at the sole cost and expense of the

                                      -18-

<PAGE>



requesting  Party (unless the  requesting  Party is entitled to  indemnification
therefore pursuant to the Indemnity Agreement annexed hereto.

     (b) Litigation  Support: In the event and for so long as any Party actively
is  contesting  or  defending  against any action,  suit,  proceeding,  hearing,
investigation,  charge,  complaint,  claim, or demand in connection with (i) any
transaction  contemplated  under this  Agreement or between any other  agreement
collateral hereto, (ii) any fact, situation,  circumstance,  status,  condition,
activity,  practice, plan, occurrence,  event, incident, action, failure to act,
or  transaction  on or prior to the Closing Date  involving  the business of the
Company as conducted  prior to the Closing Date,  the other Party will cooperate
with the  contesting  or  defending  Party and its  counsel  in the  contest  or
defense, make available its personnel,  and provide such testimony and access to
its books and records as shall be  necessary in  connection  with the contest or
defense,  all at the sole cost and expense of the contesting or defending  Party
(unless  the  contesting  or  defending  Party is  entitled  to  indemnification
therefor under an indemnity agreement annexed hereto.

 EIGHTH:     Representations and Warranties-         Sellers and Company hereby
covenant,  represent and warrant to the Purchaser that the statements  contained
in this Paragraph "EIGHTH" are true and correct , both as of the date hereof and
as of the Closing date,( as though made then and as though the Closing Date were
substituted for the date of this Agreement) as follows:

                  1.       Corporate Matters

          (a) Valid  Corporate  Existence-  The  Company is a  Corporation  duly
     organized and validly  existing and in good standing  under the laws of the
     State of Maryland.

          (b)  Authority-  The Company  has all  requisite  corporate  power and
     authority to own its assets and properties, and to carry on its business as
     now  conducted.  Sellers  have the power and  authority  to enter into this
     Agreement, and to carry out the transactions

                                                       -19-

<PAGE>



contemplated hereby,  including,  without limitation,  the authority to transfer
the Company's stock as herein provided.

     (c) Capitalization; Stockholders of the Company- The Company has the number
of shares of authorized,  issued and outstanding  shares of capital stock as set
forth below:

                                      1500        authorized,
                                      1000        issued.

         Sellers are the owners beneficially and of record of one hundred (100%)
percent of all issued and outstanding capital stock of the Company. There are no
outstanding options, Contracts, calls, demands,  commitments,  stock restriction
agreements or  encumbrances  of any  character  relating to its capital stock in
said Company,  and no securities of the Company outstanding which by their terms
are  convertible  into capital  stock.  With the exception of a suit against the
Company by "Offit & Kurman, PA" (Case Number 03-C-97-010683),  that there are no
actions,  litigations,  judgments or executions now in force or pending  against
the Sellers or the Company, nor have any petitions in bankruptcy or arrangements
been filed by or against the Sellers or the Company. That the sale of said stock
does  not  render  the  Seller  insolvent.  That the  schedules  of  assets  and
liabilities are true and complete  representations of the liabilities and assets
of the Company.

     (d)  Subsidiaries-  The Company does not own any capital stock or any other
interest in any other business entity, whether incorporated or unincorporated.

     (e)  Enforceability-  This Agreement  constitutes a binding and enforceable
agreement of both parties.

     (f) Actions, Claims, etc.- With the exception of a suit against the Company
by  "Offit & Kurman,  PA" (Case  Number  03-C-97-010683),  there are no  claims,
suits,

                                                       -20-

<PAGE>



proceedings or investigations, governmental or private, pending or, so far as is
known to Seller,  threatened,  nor any order,  injunction or decree outstanding,
against or relating to the Company or its property,  assets or business.  Seller
does not know or have any  reasonable  grounds to know of any basis for any such
claims, actions, suits,  proceedings,  investigations or orders,  injunctions or
decrees;  and  Seller is not  knowingly  in  violation  of any  applicable  law,
regulation  or ordinance  and is not  knowingly or otherwise in violation of any
order,  injunction or decree,  or any other requirement of any governmental body
or Court, relating to its property or business.

     (g)  Collective  Bargaining-  Except as set forth in and by the Schedule of
Employment Agreements annexed, the Company has no employment, union
or collective bargaining agreements.

     (h)   Miscellaneous- The Company has not (i) issued, delivered or agreed to
issue  or  deliver  any  stock,  bonds or other  corporate  securities  (whether
authorized and unissued or held in the treasury),  or granted or agreed to grant
any  options,  warrants  or other  rights  calling for the issue  thereof;  (ii)
borrowed or agreed to borrow any funds or  incurred,  or become  subject to, any
obligation  or  liability   (absolute  or  contingent)  except  obligations  and
liabilities  (other than tort  liabilities)  incurred in the ordinary  course of
business;  (iii) paid any obligation or liability (absolute or contingent) other
than  current  liabilities  incurred in the ordinary  course of  business;  (iv)
declared  or made,  or agreed to declare or make any  payment  of  dividends  or
distributions  of any  assets of any kind  whatsoever  to its  stockholders,  or
purchased, or agreed to purchase, any of the Company common stock; (v) except in
the ordinary course of business and as  contemplated by this Agreement,  sold or
transferred,  or agreed to sell or  transfer,  any of its  assets,  property  or
rights or canceled, or agreed to cancel, any debts or claims; (vi) except in the
ordinary  course of business,  entered or agreed to enter into any  agreement or
arrangement granting any preferential rights to

                                      -21-

<PAGE>



purchase any of the assets,  property or rights of the Company or requiring  the
consent of any party to the transfer and assignment of any such assets, property
or rights;  (vii) suffered any losses or waived any rights of value which in the
aggregate are extraordinary or material  considering the business of the Company
taken as a whole;  (viii)  except in the ordinary  course of  business,  made or
permitted any amendment or termination of any Contract,  agreement or license to
which it is a party if such amendment or termination is material considering the
business of the Company  taken as a whole;  (ix) except in  accordance  with its
normal  and usual  practice  and  except  for the  obligation  to  Helene  Hines
designated  as  and  for a  "consulting  fee"  in and  by a  certain  Settlement
Agreement  made May 14, 1997  between  one Helene  Hines and the Sellers and the
Company,  made any accrual or  arrangement  for or payment of bonuses or special
compensation  of any kind or any severance or termination  pay to any present or
former  officer of employee;  and (x) except in  accordance  with its normal and
usual practice, increased the salary of any officer or employee.

     (i) Title to  Assets-  Except to the  extent  inventory  may be  subject to
security interests of Deutsche Financial Corp. and/or Apple Computer,  Inc., and
except to the extent that a security  interest is noted upon any  Certificate of
Title to a vehicle  owned by the  Company,  the Company has good and  marketable
title to, or a valid  leasehold  interest in, the  properties and assets used by
them,  located  on  their  premises,  or  shown  on the  most  recent  financial
statements or acquired  after the date  thereof,  free and clear of all Security
Interests,  except for properties and assets  disposed of in the Ordinary Course
of Business since the date of the most recent balance  sheet.  Without  limiting
the  generality of the foregoing,  the Company has good and marketable  title to
all of the Assets,  free and clear of any Security  Interest or  restriction  on
transfer.

     (j) Financial  Statements- Attached hereto as Exhibit "A" are the unaudited
balance  sheets and  statements of income and cash flow as of and for the period
from

                                      -22-

<PAGE>



 January  1, 1997 to  November  30,  1997 ,  collectively,  the "1997  Financial
Statements". The 1997 Financial Statements (including the Notes thereto, if any)
have been  prepared  in  accordance  with GAAP  applied  on a  consistent  basis
throughout the periods covered thereby,  present fairly the financial  condition
of the Company as of such dates and the results of operations of the Company for
such periods,  are correct and complete,  and are consistent  with the books and
records of the Company  (which  books and  records  are  correct and  complete);
PROVIDED,  HOWEVER,  that the 1997  Financial  Statements  are subject to normal
year-end  adjustments  (which  will  not  be  material  individually  or in  the
aggregate).

     (k) Events Subsequent to November 30, 1997 Financial  Statements- Since the
November 30, 1997 Financial Statements,  there has not been any material adverse
change in the business, financial condition,  operations, results of operations,
or future  prospects of the Company.  Without  limiting  the  generality  of the
foregoing, since that date:

               (i)  The Company has not sold, leased,  transferred,  or assigned
                    any of its assets, tangible or intangible,  other than for a
                    fair consideration in the Ordinary Course of Business;

               (ii) The Company has not entered  into any  agreement,  contract,
                    lease,   or  license  (or  series  of  related   agreements,
                    contracts,  leases,  and  licenses)  or  other  than  in the
                    Ordinary Course of Business;

             (iii)  No party has accelerated,  terminated, modified, or canceled
                    any  agreement,  contract,  lease,  or license (or series of
                    related   agreements,   contracts,   leases,  and  licenses)
                    involving  more than  $10,000.00  to which the  Company is a
                    party or is bound;

               (iv) Other than  increases in credit  extensions  under  existing
                    agreements with Apple Computer,  Inc. and Deutsche Financial
                    Services Corp. which the Company

                                      -23-

<PAGE>



                    may have  incurred  in the  usual  course of  business,  the
                    Company has not imposed any  Security  Interest  upon any of
                    its assets, tangible or intangible;

               (v)  The Company has not made any capital  expenditure (or series
                    of related capital  expenditures) either involving more than
                    $2,500.00, or other than in the Ordinary Course of Business;

               (vi) The  Company  has not issued any note,  bond,  or other debt
                    security or created,  incurred,  assumed,  or guaranteed any
                    indebtedness   for  borrowed  money  or  capitalized   lease
                    obligation  either involving more than $10,000.00  singly or
                    $50,000.00, in the aggregate;

              (vii) Except as otherwise agreed to by the Purchaser,  the Company
                    has not delayed or postponed the payment of accounts payable
                    and other  Liabilities  other than in the Ordinary Course of
                    Business;

             (viii) The  Company has not  canceled,  compromised,  waived,  or
                    released  any right or claim (or series of  related  rights,
                    and claims) other than in the Ordinary Course of Business;

               (ix) The Company has not  granted any license or  sub-license  of
                    any  rights  under  or  with  respect  to  any  Intellectual
                    Property;

               (x)  Except for the stock held by the  Sellers,  the  Company has
                    not  issued,  sold,  or  otherwise  disposed  of  any of its
                    capital stock,  or granted any options,  warrants,  or other
                    rights to purchase  or obtain  (including  upon  conversion,
                    exchange, or exercise) any of its capital stock;

                                                       -24-

<PAGE>



               (xi) The  Company  has not  declared,  set  aside,  or  paid  any
                    dividend  or  made  any  distribution  with  respect  to its
                    capital  stock  (whether  in cash or in kind)  or  redeemed,
                    purchased, or otherwise acquired any of its capital stock;

               (xii)The  Company  has  not  experienced  any  material   damage,
                    destruction,  or loss  (whether or not covered by insurance)
                    to its property;

             (xiii) The Company has not made any loan to, or entered  into any
                    other transaction with, any of the directors,  officers, and
                    employees of the Company  other than in the Ordinary  Course
                    of Business;

               (xiv)The Company has not entered into any employment  contract or
                    collective  bargaining   agreement,   written  or  oral,  or
                    modified  the terms of any existing  employment  contract or
                    collective bargaining agreement;

               (xv) The  Company  has  not  granted  any  increase  in the  base
                    compensation  of any of its directors,  officers,  and other
                    than in the Ordinary Course of Business;

              (xvi) The  Company  has  not  adopted,   amended,   modified,   or
                    terminated any bonus, profit-sharing,  incentive, severance,
                    or other plan,  contract,  or commitment  for the benefit of
                    any of the directors, officers, and employees of the Company
                    or taken  any  such  action  with  respect  to the  existing
                    Employee Benefit Plan;

               (xvii) The  Company has not made any other  change in  employment
                    terms  for any of its  directors,  officers,  and  employees
                    other than in the Ordinary  Course of Business;  (xviii) The
                    Company  has not made or pledged to make any  charitable  or
                    other capital contribution other than in the Ordinary Course
                    of Business;

              (xix  The  Company has not paid any amount to any third party with
                    respect to any  Liability  or  obligation  other than in the
                    Ordinary Course of Business;

                                                       -25-

<PAGE>



     (xx) There has not been any other  material  occurrence,  event,  incident,
          action,  failure to act,  or  transaction  other than in the  Ordinary
          Course of Business involving the Company.

     (l) Undisclosed  Liabilities- The Company does not have any Liability (and,
to its  and/or  the  Sellers'  knowledge,  there is no Basis for any  present or
future action, suit,  proceeding,  hearing,  investigation,  charge,  complaint,
claim, or demand against any of them giving rise to any  Liability),  except for
(i)  Liabilities  set  forth  on the face of the  November  30,  1997  Financial
Statements (rather than in any notes thereto) (ii) Liabilities which have arisen
after the  November  30, 1997  Financial  Statement  in the  Ordinary  Course of
Business (to the best of Seller's knowledge,  none of which results from, arises
out of,  relates  to,  is in the  nature  of,  or was  caused  by any  breach of
contract,  breach of warranty,  tort,  infringement,  or violation of law);  and
(iii) that certain  liability to Helene Hines  designated as a consulting fee in
and by a Settlement  Agreement between Helene Hines, the Company and the Sellers
dated May 14, 1997, which obligation currently does not exceed $216,666.70.

     (m) Legal Compliance- To its knowledge the Company has materially  complied
with  all  applicable  laws  (including  rules,   regulations,   codes,   plans,
injunctions,  judgments,  orders,  decrees,  rulings, and charges thereunder) of
federal,  state, local, and foreign governments (and all agencies thereof),  and
no action, suit, proceeding, hearing,  investigation,  charge, complaint, claim,
demand,  or notice  has been filed or, to its  and/or  the  Sellers'  knowledge,
commenced  against any of them  alleging  any failure so to comply  except where
failure to comply would not have any material adverse effect upon the Company or
its business.


     (n) Tax Matters-

                                                       -26-

<PAGE>



     (i) The  Company  has filed all Tax  Returns  that it was  required to file
prior to the Closing Date. All such Tax Returns were correct and complete in all
respects. All Taxes owed by the Company (whether or not shown on any Tax Return)
have been paid. The Company currently is not the beneficiary of any extension of
time  within  which to file any Tax  Return.  No claim  has ever been made by an
authority in a jurisdiction  where the Company does not file Tax Returns that it
is or may be subject to  taxation  by that  jurisdiction.  There are no Security
Interests  affecting  any of the assets of the Company that arose in  connection
with any failure (or alleged failure) to pay any Tax;

     (ii) The  Company  has  withheld  and paid all Taxes  required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party;

     (iii)  Neither  the  Company nor any  director  nor  officer  (or  employee
responsible  for Tax matters)  expects any  authority  to assess any  additional
Taxes with respect to the Company for any period for which Tax Returns have been
filed.  There is no dispute or claim concerning any Tax Liability of the Company
either (A) claimed or raised by any  authority in writing or (B) as to which any
directors  and  officers  (and  employees  responsible  for Tax  matters) of the
Company;

     (iv) The  Company  has not  waived  any  statute  of  limitations  in as to
liabilities  or Taxes of any  nature  or agreed  to any  extension  of time with
respect to any liabilities or Tax assessments or deficiencies;

     (v) The Company has not filed a consent under Code Sec.  341(f)  concerning
collapsible corporations. The Company has not been a United States real property
holding  corporation  within  the  meaning  of Code Sec.  897(c)(2)  during  the
applicable period specified in Code

                                                       -27-

<PAGE>



Sec. 987 (c)(1)(A)(ii). The Company has not been a member of an Affiliated Group
filing a consolidated federal income Tax Return or (B) has any Liability for the
Taxes of any Person under any  provision of federal,  state,  local,  or foreign
law), as a transferee or successor by contract, or otherwise.

     (o) Real Property- The Company does not own any real property.  The Sellers
are  presently  the sole members of BC and HC  Properties,  LLC.  That BC and HC
Properties, LLC is the owner in fee of the premises to be demised to the Company
pursuant to the lease  annexed.  That upon  execution  of the Lease by BC and HC
Properties, LLC as Landlord and the Company as Tenant, such Lease will establish
a valid leasehold interest as represented and described therein.

     (p) Intellectual Property-

               (i)  The  Company  owns  or has  the  right  to use  pursuant  to
license,  sub-licenses,  agreement,  or  permission  all  Intellectual  Property
necessary for the operation of its businesses as presently conducted.  Each item
of Intellectual  Property owned or used by the Company  immediately prior to the
Closing  hereunder will be owned or available for use by the Company  subsequent
to the Closing hereunder;

               (ii)  To the  best of the  Seller's  knowledge,  the Company has
not interfered  with,  infringed upon,  misappropriated,  or otherwise come into
conflict with any Intellectual Property rights of third parties, and neither the
Company nor its directors and officers (any  employees with  responsibility  for
Intellectual Property matters) has ever received any charge,  complaint,  claim,
demand,    or   notice   alleging   any   such    interference,    infringement,
misappropriation,  or  violation  (including  any claim  that the  Company  must
license or  refrain  from using any  Intellectual  Property  rights of any third
party), to the knowledge of the Sellers and the knowledge of the Company and its

                                                       -28-

<PAGE>



directors and officers  (any  employees  with  responsibility  for  Intellectual
Property  matters),   no  third  party  has  interfered  with,  infringed  upon,
misappropriated,  or otherwise come into conflict with any Intellectual Property
rights of the Company.

     (q) Tangible  Assets- The Company owns or leases all buildings,  machinery,
equipment,  and  other  tangible  assets  necessary  for the  conduct  of  their
businesses as presently conducted. To the Seller's knowledge, each such tangible
asset  is free  from  defects  (patent  and  latent),  has  been  maintained  in
accordance with normal  industry  practice,  is in good operating  condition and
repair  (subject to normal wear and tear),  and is suitable for the purposes for
which it presently is used.

     (r) Inventory- The inventory of the Company  consists of  manufactured  and
purchased  parts,  goods  in  process,  and  finished  goods,  all of  which  is
merchantable  and fit for the  purpose  for which it was  procured,  and none of
which is  slow-moving,  obsolete,  damaged,  or defective.

     (s)  Contracts-  The  Schedule of Contracts  as annexed  hereto,  lists all
contracts and other  agreements  to which the Company is a party,  including but
not limited to:

          (i)  any agreement (or group of related  agreements)  for the lease of
               personal  property  to or from any  person  providing  for  lease
               payments;

          (ii) any agreement (or group of related  agreements)  for the purchase
               or sale of raw  material,  commodities,  supplies,  products,  or
               other  personal  property,  or for the  furnishing  or receipt of
               services;

          (iii) any agreement concerning a partnership or joint venture;

          (iv) any agreement (or group of related agreements) under which it has
               created,  incurred,  assumed,  or guaranteed any indebtedness for
               borrowed money, or any

                                                       -29-

<PAGE>



          capitalized lease obligation, or under which it has imposed a Security
          Interest on any of its assets, tangible or intangible;

     (v) any agreement concerning confidentiality or non-competition;

     (vi) any profit sharing, stock option, stock purchase,  stock appreciation,
          deferred   compensation,   severance,   or  other   material  plan  or
          arrangement  for the  benefit  of the  current  or  former  directors,
          officers, and employees;

     (vii) any collective bargaining agreement;

    (viii) any agreement for the  employment of any individual on a full- time,
           part-time, consulting, or other basis;

     (ix) any agreement  under which it has advanced or loaned any amount to any
          of the directors,  officers,  and employees other than in the Ordinary
          Course of Business;

     (x)  any agreement under which the consequences of a default or termination
          could have an effect on the business, financial condition, operations,
          results of operations, or future prospects of the Company; or

     (xi) any other agreement.

         The Company has  delivered to Manchester a correct and complete copy of
each written  agreement  listed in Schedule of  Contracts  (as amended to date).
With respect to each such agreement; (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) the agreement will continue to be
legal, valid,  binding,  enforceable,  and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby subject
to the  right of any  third  party to  consent  to such  assignment;  (C) to its
knowledge,  no party is in breach or default;  and no event has  occurred  which
with notice or lapse of time would constitute a breach or

                                      -30-

<PAGE>



default,  or  permit  termination,  modification,  or  acceleration,  under  the
agreement;  and (D) to its  knowledge,  no party has repudiated any provision of
the Agreement.

     (t) Notes and Accounts Receivable-        All notes and accounts receivable
of the Company are reflected  properly on the Company's  books and records,  are
valid  receivables  subject  to no set offs or  counterclaims,  are  current  or
collectible,  and will be  collected  in  accordance  with their  terms at their
recorded  amounts,  as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of the Company.

     (u) Powers of Attorney-         There are no outstanding Powers of Attorney
executed on behalf of the Company.

     (v) Insurance-            The Schedule of Insurance Agreements annexed sets
forth each insurance policy (including policies providing life (key man policies
on Sellers lives),  property,  casualty,  liability,  and workers'  compensation
coverage and bond and surety  arrangements)  to which the Company is currently a
party, a named insured, or otherwise the beneficiary of coverage:

         With respect to each such  insurance  policy:  (A) the policy is legal,
valid,  binding,  enforceable,  and in full force and effect; (B) the Company is
not in breach or default  (including  with respect to the payment of premiums or
the giving of  notices),  and no event has  occurred  which,  with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration,  under the policy; and (C) no party to the policy
has repudiated any provision thereof.

     (w) Product Warranty- Each product manufactured, sold, leased, or delivered
by  the  Company  has  been  in  conformity  with  all  applicable   contractual
commitments and all express and implied warranties,  and the Company to the best
of Seller's  knowledge,  has no liability (and there is no basis for any present
or future action, suit, proceeding, hearing, investigation, charge,

                                      -31-

<PAGE>



complaint,  claim,  or demand  against any of them giving rise to any liability)
for  replacement or repair  thereof or other damages in connection  therewith as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice. No product manufactured, sold, leased, or delivered by
the Company is subject to any guaranty,  warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease.

     (x) Product Liability-       To the best of Seller's knowledge, the Company
has no liability (and there is no basis for any present or future action,  suit,
proceeding, hearing, investigation,  charge, complaint, claim, or demand against
any of  them  giving  rise  to any  liability)  arising  out  of any  injury  to
individuals or property as a result of the ownership, possession, or use by it.

     (y)  Employees-  To the best of the Seller's  Knowledge no  executive,  key
employee,  or group of  employees  of the  Company  has any  plans to  terminate
employment.  The Company is not a party to or bound by any collective bargaining
agreement,  nor has it  experienced  any strikes,  grievances,  claims of unfair
labor practices, or other collective bargaining disputes.

     (z) Employee Benefits-

          (i) Each such Employee Benefit Plan (and each related trust, insurance
     contract,  or fund)  complies in form and in operation in all respects with
     the applicable requirements of ERISA, the Code, and other applicable laws.

          (ii) To the best of Seller's  knowledge,  each such  Employee  Benefit
     Plan which is an Employee  Pension Benefit Plan meets the requirements of a
     "qualified plan" under Code Sec. 401(a).

          (iii) The Company has delivered to the Purchaser  correct and complete
     copies of the plan documents and summary plan descriptions.

                                      -32-

<PAGE>



     (iv) The Company does not currently maintain, has never maintained, and has
no liability with respect to any Multi-employer Plan.

     (v) The Schedule of Employee  Benefit Plans  annexed  hereto sets forth all
fringe  benefits  such as  pension,  profit  sharing,  medical,  health  or life
insurance  plans  provided  by the  Company to its  employees.  The  Company has
delivered a copy of all such plans to Manchester prior to Closing.

     (aa)  Guaranties- The Company is not a guarantor or otherwise is liable for
any liability or obligation (including indebtedness) of any other person.

     (bb)  Environment,  Health,  and  Safety- To the  Seller's  knowledge,  the
Company has complied with all  Environmental,  Health,  and Safety Laws,  and no
action, suit, proceeding,  hearing,  investigation,  charge,  complaint,  claim,
demand,  or notice has been filed or commenced  against any of them alleging any
failure so to comply. Without limiting the generality of the preceding sentence,
the  Company  has  obtained  and been in  compliance  with all of the  terms and
conditions of all permits, licenses, and other authorizations which are required
under, and has complied with all other  limitations,  restrictions,  conditions,
standards, prohibitions,  requirements,  obligations,  Schedules, and timetables
which are contained in, all Environmental, Health, and Safety Laws.

     (cc)  Disclosure-  The  representations  and  warranties  contained in this
Paragraph  "EIGHTH",  do not contain any untrue  statement of a material fact or
omit to state any material fact.

NINTH:            REPRESENTATIONS AND WARRANTIES OF MANCHESTER-

     1.  Manchester  represents and warrants to The Company and the Sellers that
the statements  contained in Paragraph  "NINTH",  are correct and complete as of
the date of this

                                                       -33-

<PAGE>



Agreement  and will be correct and  complete  as of the Closing  Date (as though
made then and as though the Closing Date were  substituted  for the date of this
Agreement throughout this Paragraph "NINTH").

     (a) Organization of Manchester: Manchester is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of the
State of New York.

     (b)  Authorization of Transaction:  Manchester has full power and authority
(including  full  corporate  power and  authority)  to execute and deliver  this
Agreement  and  all  collateral   Agreements  and  to  perform  its  obligations
hereunder.  This Agreement  constitutes the valid and legally binding obligation
of Manchester, enforceable in accordance with its terms and conditions.

     (c)  Non-contravention:  Neither  the  execution  and the  delivery of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental agency, or court to which Manchester is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under,  result in the  acceleration of, create in any party the right to
accelerate,  terminate,  modify,  or  cancel,  or require  any notice  under any
agreement,  contract, lease, license,  instrument, or other arrangement to which
Manchester is a party or by which it is bound or to which any of its  respective
assets is  subject.  Manchester  needs not give any notice  to,  make any filing
with, or obtain any  authorization,  consent,  or approval of any  government or
governmental  agency in order for the  Parties to  consummate  the  transactions
contemplated by this Agreement.


                                                       -34-

<PAGE>



TENTH:            CONDITIONS TO OBLIGATIONS TO CLOSE-

                  A.  Conditions to Obligation of Manchester-  The obligation of
Purchaser  to  consummate  the  transactions  to be performed by each of them in
connection  with  the  Closing  is  subject  to  satisfaction  of the  following
conditions:

     (i) The  representations  and warranties of the Sellers and the Company set
forth in  Paragraph  "EIGHTH"  above,  shall be true and correct in all material
respects at and as of the Closing Date;

     (ii) The Company and the Sellers shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;

     (iii) No action,  suit, or proceeding  shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction  or  before  any  arbitrator  wherein  an  unfavorable  injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of any
of the  transactions  contemplated  by  this  Agreement,  (B)  cause  any of the
transactions   contemplated   by  this  Agreement  to  be  rescinded   following
consummation,  (C)  affect  adversely  the right of  Purchaser  to  operate  the
businesses  of the  Company  conducted  prior  to  the  Closing,  or (D)  affect
adversely its right to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect);

     (iv)  Manchester  shall have  received  from counsel to the Company and the
shareholders  an opinion in form and substance as annexed  hereto,  addressed to
Manchester and dated as of the Closing Date; and

                  B.   Conditions  to  Obligation  of  the   Shareholders-   The
obligation of the Shareholders to consummate the transactions to be performed by
it in connection  with the Closing is subject to  satisfaction  of the following
conditions:

                                                       -35-

<PAGE>



     (i) The  representations  and  warranties  set forth in  Paragraph  "NINTH"
above,  shall be true and  correct  in all  material  respects  at and as of the
Closing Date;

     (ii) Each of Manchester  and the Company shall have  performed and complied
with  all of its  covenants  hereunder  in all  material  respects  through  the
Closing;

     (iii) No action,  suit, or proceeding shall be pending or threatened before
any court or  quasi-judicial  or  administrative  agency of any federal,  state,
local, or foreign  jurisdiction or before any arbitrator  wherein an unfavorable
injunction,  judgment,  order,  decree,  ruling,  or charge  would  (A)  prevent
consummation  or any of the  transactions  contemplated  by the Agreement or (B)
cause any of the  transactions  contemplated  by this  Agreement to be rescinded
following consummation (and no such injunction,  judgment order, decree, ruling,
or charge shall be in effect);

     (iv) The  Shareholders  shall have  received  from counsel to Manchester an
opinion in form and substance as annexed hereto;

     (v) All actions to be taken by Manchester in connection  with  consummation
of  the  transactions  contemplated  hereby  and  all  certificates,   opinions,
instruments,   and  other   documents   required  to  effect  the   transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Shareholders.

ELEVENTH:                  TERMINATION-              Intentionally Deleted

TWELFTH:                   MISCELLANEOUS PROVISIONS-

     (a) Scope of  Agreement  - The  Parties do not intend to confer any benefit
hereunder  on any person,  firm or  corporation,  other than the Sellers and the
Purchasers.  Without  limiting  the  generality  of the  foregoing,  each of the
parties  may, by written  notice to the other and  without  consent of any other
person,  firm or corporation  (i) extend the time for  performance of any of the
obligations or other acts of the other Party; (ii) waive any inaccuracies in the
representations

                                                       -36-

<PAGE>



and  warranties  of the other party  contained  in this  Agreement;  (iii) waive
compliance  with any of the  covenants  of the  other  party  contained  in this
Agreement;  or (iv)  waive  performance  of any of the  obligations  under  this
Agreement by the other party.

     (b) Binding  Agreement - This Agreement  shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

   (c)      Exhibits - All Exhibits, Schedules and Appendices annexed hereto and
the  documents  and  instruments  delivered  simultaneously  herewith and at the
Closing  are  expressly  made a part  of  this  Agreement  as  fully  as  though
completely set forth herein,  and all references to this Agreement  herein or in
any of such writings, shall be deemed to refer to and include all such writings.

     (d)  Entire  Agreement,  etc.  -  This  Agreement  constitutes  the  entire
understanding  between the parties  pertaining to the subject matter hereof.  No
interpretation,  change,  termination or waiver of any of the provisions  hereof
shall be binding upon either party unless in writing.  No waiver by either party
of any  provision of or default under this  Agreement  shall affect the right of
such party  thereafter to enforce said provision or any other provision  hereof,
or to exercise any right or remedy in the event of any other default, whether or
not  similar.  The  invalidity  of any  provision  hereof  shall not  affect the
validity of any other such provision.

     (e) Further  Instruments - On and after the Closing date,  upon the request
of either  party,  the other party  shall do all such  further  acts,  and shall
execute,  acknowledge and deliver all such further instruments and documents, as
may  reasonably  be  necessary,  desirable  or  appropriate  to  carry  out  the
transactions  contemplated  by  this  Agreement,  all of  such  documents  to be
reasonably satisfactory to such other Party's Counsel in form and content.

                                      -37-

<PAGE>



     (f) Survival of  Representations,  etc. - Except as may otherwise be agreed
to, the parties agree that all of the  representations,  warranties,  covenants,
agreements and undertakings contained in this Agreement shall survive Closing.

     (g) Applicable  Law - This Agreement and all the agreements  annexed hereto
as exhibits  shall be governed by and construed in  accordance  with the laws of
the State of New York.

     (h) Venue - The venue of any action commenced by any party to this
agreement or any agreement  annexed hereto as an exhibit shall be in the Supreme
Court of the State of New York a court with subject matter  jurisdiction  in the
County of Suffolk,  State of New York. For purposes  hereof,  this agreement and
all  agreements  annexed hereto shall be deemed to have been entered into within
the County of Suffolk, State of New York.

     (i) Paragraph  Headings - Paragraph  headings have been inserted herein for
convenience only, and do not form a part of the Agreement.

     (j) Counterparts - This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be an original and which together
shall constitute one and the same instrument.

     (k) Notices - Any payment, notices, request, instructions, consent or other
documents to be given hereunder shall be in writing and delivered  personally or
sent by certified or registered mail, postage prepaid as follows:

                               If to the Purchaser, addressed to:
                               Manchester Equipment Co., Inc.
                               160 Oser Avenue
                               Hauppauge, New York 11788



                                                       -38-

<PAGE>



                                with a copy thereof addressed to:

                                David I. Roth, Esq.
                                Kressel, Rothlein & Roth, Esqs.
                                684 Broadway
                                Massapequa, New York 11758

                               If to the Sellers, addressed to:

                                Bruce and Harold Clasing
                                3832 Falls Road
                                Baltimore, Maryland 21211

                                with a copy thereof addressed to:

                                Frank Kollman, Esq.
                                Kollman and Sheehan, P.A.
                                Sun Life Building
                                20 South Charles Street
                                Baltimore, Maryland 21201-3223
                                Att:  Clifford B. Geiger

         Either party may change the persons and addresses to which any payment,
notice, request,  instruction,  consent or other document is to be sent to it by
giving  written  notice  of any such  change to the  other  party in the  manner
provided  for  herein  for  giving  notice.   Any  payment,   notice,   request,
instruction,  consent or other document mailed hereunder shall be deemed to have
been received when mailed.

     (l) Prior Agreements - The parties agree that all prior agreements  between
the parties,  whether oral or written, are herewith made null and void and of no
effect, legal or equitable.

     (m) Press  Releases  and Public  Announcements  - No Party  shall issue any
press release or make any public announcement  relating to the subject matter of
this Agreement  prior to the Closing  without the prior written  approval of the
other Party; PROVIDED, HOWEVER, that any Party may make any public disclosure it
believes in good faith is required by

                                      -39-

<PAGE>



applicable   law  or  any   listing  or   trading   agreement   concerning   its
publicly-traded  securities  (in  which  case  the  disclosing  Party  will  use
reasonable  best  efforts  to  advise  the  other  party  prior  to  making  the
disclosure).

     (n)  Amendments  and  Waivers  - No  amendment  of any  provision  of  this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Purchaser,  the Sellers and the Company:  No waiver by any Party of any default,
misrepresentation,   or  breach  of  warranty  or  covenant  hereunder,  whether
intentional  or not,  shall be  deemed  to  extend  to any  prior or  subsequent
default,  misrepresentation,  or breach of  warranty or  covenant  hereunder  or
affect in any way any rights  arising by virtue of any prior or subsequent  such
occurrence.

     (o)  Severability - Any term or provision of this Agreement that is invalid
or  unenforceable  in any  situation  in any  jurisdiction  shall not affect the
validity or  enforceability  of the remaining terms and provisions hereof or the
validity or  enforceability  of the  offending  term of  provision  in any other
situation or in any other jurisdiction.

     (p)  Expenses  - Each  Party  will bear his or its own  costs and  expenses
(including  legal fees and expenses)  incurred in connection with this Agreement
and the transactions contemplated hereby.

     (q) Construction - The Parties have participated jointly in the negotiation
and drafting of this Agreement.  In the event an ambiguity or question of intent
or  interpretation  arises,  this  Agreement  shall be  construed  as if drafted
jointly  by the  Parties  and no  presumption  or  burden of proof  shall  arise
favoring  or  disfavoring  any Party by virtue of the  authorship  of any of the
provisions of this  Agreement.  Any reference to any federal,  state,  local, or
foreign  statute  or law  shall  be  deemed  also  to  refer  to all  rules  and
regulations promulgated thereunder,  unless the context requires otherwise.  The
word "including" shall mean including without limitation. Nothing in the

                                      -40-

<PAGE>



Schedules  annexed to this  Agreement  shall be deemed  adequate  to disclose an
exception  to a  representation  or warranty  made herein  unless such  Schedule
identifies  the  exception  with  reasonable  particularity  and  describes  the
relevant   facts  in   reasonable   detail.   The   Parties   intend  that  each
representation,  warranty,  and covenant contained herein shall have independent
significance.

     (r) Specific Performance - Each of the Parties acknowledges and agrees that
the other Party would be damaged  irreparably in the event any of the provisions
of this  Agreement are not performed in accordance  with their specific terms or
otherwise are breached.  Accordingly,  each of the Parties agrees that the other
Party shall be entitled to an injunction or injunctions  to prevent  breaches of
the provisions of this Agreement and to enforce  specifically this Agreement and
the terms and  provisions  hereof in any action  instituted  in any Court of the
United States or any State hereof having  jurisdiction  over the Parties and the
matter  (subject to the provisions set forth in Paragraph  "TWELFTH" (s) below),
in  addition  to any  other  remedy  to which it may be  entitled,  at law or in
equity.

     (s)  Submission  to  Jurisdiction  - Each  of the  Parties  submits  to the
jurisdiction  of the Supreme Court of the State of New York situated  within the
County of Suffolk in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding  may
be heard and  determined  in any such Court  provided that service of process is
effected in accordance with the rules of such court.  Each Party also agrees not
to bring any action or proceeding  arising out of or relating to this  Agreement
in  any  other  Court  provided,  however,  that  any  dispute  related  to  the
determination   of  gross  revenues  and/or  pretax  profits  be  determined  in
accordance  with the  provisions  of Paragraph  "SECOND" C) herein.  Each of the
Parties  waives any  defense of  inconvenient  forum to the  maintenance  of any
action or proceeding so brought and waives any bond,  surety,  or other security
that might be required of any

                                      -41-

<PAGE>


other Party with respect thereto. Each Party agrees that a final Judgment in any
action or proceeding so brought shall be conclusive  and may be enforced by suit
on the Judgment or in any other manner provided by law or in equity.

                  IN  WITNESS  WHEREOF,  the  Company  and the  Purchasers  have
executed this Agreement by its  authorized  officers and the Sellers have caused
their individual signatures to be affixed hereto on the day and year first above
written. In the Presence Of:


                                                Bruce C. Clasing


                                                 Harold B. Clasing

                                               Manchester Equipment Co., Inc.

                                               By:
                                                    Barry R. Steinberg, CEO


                                                Coastal Office Products, Inc.

                                                By:











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