Document:

(jj)(1)

                            ASSET PURCHASE AGREEMENT
                            ------------------------

THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and is entered into this
3rd  day  of  July,  2000,  effective  12:01 a.m., by, between and among POMEROY
COMPUTER  RESOURCES,  INC., a Delaware corporation, ("Purchaser No. 1"), POMEROY
SELECT  INTEGRATION  SOLUTIONS,  INC.  ("Purchaser  No.  2"), DATASOURCE SYSTEMS
CORPORATION,  dba DATASOURCE HAGEN and DATASOURCE SYSTEMS MARKETING CORPORATION,
a  Delaware  corporation ("Seller"), and ROAR LUND ("R. Lund") (also hereinafter
referred  to  as  the  "Shareholder").

                              W I T N E S S E T H :

WHEREAS,  Seller is a full service provider of a variety of computer service and
support  solutions  to  large and medium size commercial, governmental and other
professional  customers  throughout  the  Minneapolis,  St.  Paul,  Minnesota
Metropolitan  area;  and

WHEREAS,  Shareholder  is the owner of three (3) shares of the outstanding stock
of Seller, which stock constitutes one hundred percent (100%) of the outstanding
stock  of  Seller;  and

WHEREAS,  Purchaser  No.  1  is in the business of marketing and selling a broad
range  of  microcomputers  and  related  products including equipment selection,
procurement  and  configuration;  and

WHEREAS,  Purchaser  No.  2,  a wholly-owned subsidiary of Purchaser No. 1, is a
single  source  provider  of  integrated desktop management and network services
including  life  cycle services, internetworking services,  and end user support
services;  and

<PAGE>
WHEREAS,  Purchaser  No.  1  desires to purchase certain of the assets of Seller
used  in  its  business of marketing and selling a broad range of microcomputers
and  related  products  including  equipment  selection,  procurement  and
configuration ("Business No. 1") and assume certain of the liabilities of Seller
in  connection  with  Business  No.  1  and  Purchaser No. 2 desires to purchase
certain  of  the  assets of Seller used in its integrated desktop management and
network  services  business  ("Business  No.  2")  and  assume  certain  of  the
liabilities  of  Seller in connection with Business No. 2; and Seller desires to
sell  certain of such assets, subject to such liabilities, but only (i) upon the
terms  and  subject  to  the  conditions  set  forth in this Agreement, (ii) the
representations,  warranties,  covenants,  indemnifications,  assurances  and
undertakings  of  Seller, Shareholder and of Purchaser No. 1 and Purchaser No. 2
contained  in  this  Agreement,  (iii)  the  agreement of Seller to refrain from
competition with Purchaser No. 1 and Purchaser No. 2 for five (5) years from the
Closing  of  this  transaction, and (iv) the agreement of Shareholder to refrain
from  competition  for  the later of five (5) years from the Closing Date or one
(1)  year after the termination of Shareholder's employment with Purchaser No. 1
pursuant  to and in accordance with, the terms of his Employment Agreement to be
executed  upon  Closing.

NOW,  THEREFORE, in consideration of the above premises and the mutual promises,
covenants,  agreements,  representations  and  warranties  herein contained, the
parties  hereto  agree  as  follows:

                                       1.
                                   DEFINITIONS
                                   -----------

1.1 Affiliate.  "Affiliate"  shall have the meaning ascribed to such term in
    ---------
    Rule 405 promulgated under the Securities Act of 1933, as amended.

1.2  Assumed  Liabilities  No  1.  The  "Assumed  Liabilities  No. 1" are the
     ---------------------------
     liabilities  of  Seller  assumed  or paid at  Closing  by  Purchaser  No. 1
     pursuant to Section 3.1 of this Agreement.

1.3  Assumed  Liabilities  No  2.  The  "Assumed  Liabilities  No. 2" are the
     ---------------------------
     liabilities  of  Seller  assumed  or paid at  Closing  by  Purchaser  No. 2
     pursuant to Section 3.2 of this Agreement.

1.4  Balance  Sheet.  The  "Balance Sheet" is  the unaudited balance sheet of
     --------------
     Seller as of May 31, 2000, included as part of the Financial Statements.

1.5  Closing.  The  "Closing"  shall  be the consummation of the transactions
     -------
     contemplated under this Asset Purchase Agreement.

1.6  Closing  Date.  The  "Closing  Date"  shall be as of 12:01 a.m., E.D.T.,
     -------------
     July 3, 2000.

                                        2
<PAGE>
1.7  Code.  The  "Code"  is the Internal Revenue Code of 1986, as amended, 26
     ----
     U.S.C.  1  et seq.
                ------

1.8  Court.  A "Court" is any federal, state, municipal, domestic, foreign or
     -----
     other  governmental  tribunal or an arbitrator or person with similar power
     or authority.

1.9  Disclosure  Schedule.  The  "Disclosure  Schedule"  is  the  Disclosure
     --------------------
     Schedule  dated  the date of this  Agreement  and  delivered  by  Seller to
     Purchaser No. 1 and Purchaser No. 2, respectively.

1.10 Encumbrance.  An  "Encumbrance"  is  any  security  interest,  lien, or
     -----------
     encumbrance whether imposed by agreement,  understanding, law or otherwise,
     on any of Purchased  Assets No. 1 and/or Purchased Assets No. 2 (as defined
     herein).

1.11 Excluded Assets.  An "Excluded Asset" is any asset set forth in Section
     ---------------
     2.4.

1.12 Financial  Statements.  The  "Financial  Statements"  are  the  audited
     ---------------------
     financial  statements  of  Seller  for the year  ended  October  31,  1999,
     including any and all notes thereto and the unaudited financial  statements
     of Seller for the period ending  October 31, 1998 and October 31, 1997, and
     for the period commencing November 1, 1999 and ending May 31, 2000.

1.13 Governmental  Entity.  A  "Governmental  Entity"  is  any  Court or any
     --------------------
     federal,  state,  municipal,  domestic,  foreign  or  other  administrative
     agency,  department,   commission,  board,  bureau  or  other  governmental
     authority or instrumentality.

1.14 Knowledge  of Seller and Shareholder or Seller's Knowledge.  "Knowledge
     ----------------------------------------------------------
     of Seller and  Shareholder  and/or  Seller's  Knowledge"  shall mean actual
     knowledge of the Shareholder.

1.15 Net  Asset  Amount  No.  1.  "Net  Asset  Amount  No. 1" shall have the
     --------------------------
     meaning set forth in Section 5.1.

1.16 Net  Asset  Amount  No.  2.  "Net  Asset  Amount  No. 2" shall have the
     --------------------------
     meaning set forth in Section 5.1.

1.17 NPBT.  The net profit before taxes of Purchaser No. 1's Minneapolis/St.
      ----
     Paul,  Minnesota  Division  and  Purchaser  No. 2's  Minneapolis/St.  Paul,
     Minnesota  Division for the applicable  period as set forth in Section 4.6.
     The  determination  of NPBT  shall be  determined  in  accordance  with the
     provisions set forth in Section 4.6.

                                        3
<PAGE>
1.18  Person.  Any  natural  person,  firm,  partnership,  association,
      ------
     corporation,  company,  limited  liability  company,  limited  partnership,
     trust, business trust, governmental authority or other entity.

1.19 Pro  Forma Balance Sheet No. 1.  The "Pro Forma Balance Sheet No. 1" is
     ------------------------------
     the  balance  sheet of Seller  prepared  as  described  in Section  5.1 and
     adjusted for Excluded Assets of Seller and Excluded Liabilities relating to
     Business No. 1 of Seller as of the Closing Date.

1.20 Pro  Forma Balance Sheet No. 2.  The "Pro Forma Balance Sheet No. 2" is
     ------------------------------
     the  balance  sheet of Seller  prepared  as  described  in Section  5.1 and
     adjusted for Excluded Assets of Seller and Excluded Liabilities relating to
     Business No. 2 of Seller as of the Closing Date.

1.21 Purchase  Price  No.  1.  The  "Purchase  Price  No.  1"  is  the total
     -----------------------
     consideration  paid by Purchaser No. 1 to Seller for Purchased Assets No. 1
     as set forth in Sections 4.1 and 4.6.

1.22 Purchase  Price  No.  2.  The  "Purchase  Price  No.  2"  is  the total
     -----------------------
     consideration  paid by Purchaser No. 2 to Seller for Purchased Assets No. 2
     as set forth in Sections 4.2 and 4.6

1.23 Purchased Assets No. 1.  The "Purchased Assets No. 1" are the assets of
     ----------------------
     Seller, used in Business No. 1, acquired by Purchaser No. 1 pursuant to the
     terms of this Agreement.

1.24 Purchased Assets No. 2.  The "Purchased Assets No. 2" are the assets of
     ----------------------
     Seller, used in Business No. 2, acquired by Purchaser No. 2 pursuant to the
     terms of this Agreement.

1.25 Seller's  Accountant.  "Seller's  Accountant"  shall  mean  Boulay,
     --------------------
     Heutmaker, Zibell and Co., P.L.L.P.

1.26 May  31st  Pro-Forma  Balance  Sheet  No.  1.  The  "May 31st Pro-Forma
     --------------------------------------------
     Balance Sheet No. 1" is the unaudited  balance sheet of Seller adjusted for
     Excluded Assets of Seller and Excluded Liabilities relating to Business No.
     1 of Seller as of May 31, 2000.

1.27 May  31st  Pro-Forma  Balance  Sheet  No.  2.  The  "May 31st Pro-Forma
     --------------------------------------------
     Balance Sheet No. 2" is the unaudited  balance sheet of Seller adjusted For
     Excluded Assets of Seller and Excluded Liabilities relating to Business No.
     2 of Seller as of May 31, 2000.

                                        4
<PAGE>
1.28 Tax  or Taxes.  Any federal, state, provincial, local, foreign or other
     -------------
     income, alternative, minimum, any taxes under Section 1374 of the Code, any
     taxes  under  Section  1375 of the  Code,  accumulated  earnings,  personal
     holding company,  franchise,  capital stock, net worth,  capital,  profits,
     windfall  profits,  gross  receipts,  value added,  sales,  use,  goods and
     services,   excise,  customs  duties,   transfer,   conveyance,   mortgage,
     registration,   stamp,   documentary,    recording,   premium,   severance,
     environmental,  including  taxes  under  Section  59A  of the  Code),  real
     property,  personal property,  ad valorem,  intangibles,  rent,  occupancy,
     license, occupational, employment, unemployment insurance, social security,
     disability,  workers'  compensation,  payroll,  health  care,  withholding,
     estimated  or other  similar  tax,  duty or other  governmental  charge  or
     assessment or  deficiencies  thereof  (including all interest and penalties
     thereon and additions thereto whether disputed or not).

1.29 Tax  Return.  A  "Tax  Return" is a report, return or other information
     -----------
     required to be supplied to a Governmental  Entity in connection  with Taxes
     including,  where permitted or required,  combined or consolidated  returns
     for any group of entities that includes Seller.

                                        2.
                                      TERMS
                                      -----

2.1  Agreement.
     ---------
     Seller agrees to sell and convey to Purchaser  No. 1 the  Purchased  Assets
     No. 1 as  hereinafter  set forth in Section 2.2.  Seller agrees to sell and
     convey to Purchaser No. 2 the  Purchased  Assets No. 2 as  hereinafter  set
     forth in Section  2.3.  Purchaser  No. 1 agrees to purchase  the  Purchased
     Assets No. 1 and Purchaser  No. 2 agrees to purchase the  Purchased  Assets
     No. 2. The agreements of Purchaser No. 1 and Purchaser No. 2 and Seller are
     expressly    conditioned   upon   the   terms,    conditions,    covenants,
     representations and warranties as hereinafter set forth.

2.2  Assets  to  be  Sold  by  Seller  and  Purchased  by  Purchaser  No.  1.
     -----------------------------------------------------------------------
     At the Closing of this Agreement, Purchaser No. 1 shall purchase and Seller
     shall sell all the assets of Seller used in Business  No. 1, except for the
     Excluded  Assets  relating to Business  No. 1. The  Purchased  Assets No. 1
     shall include, but not be limited to:

     (a)  The tangible  personal property and assets of Seller of every kind and
          description,  real,  personal  or  mixed,  wherever  located,  used in
          Business  No. 1,  including  without  limitation,  all such  assets as

                                        5
<PAGE>
          reflected on the May 31, 2000 Pro Forma Balance Sheet No. 1 (excepting
          those assets disposed of, and including those assets acquired,  in the
          ordinary  course of  business  since the date of the May 31,  2000 Pro
          Forma Balance Sheet No. 1).

     (b)  All  intangible  assets of Seller  which are used in Business No. 1 of
          Seller,  including without limitation,  all purchase orders,  contract
          rights and  agreements,  work in  process,  customer  lists,  supplier
          agreements,  patents,  trademarks  and service  marks  (including  the
          goodwill  associated  with  the  marks),  office  supplies,   computer
          programs,  claims of the Seller, the right to use of the corporate and
          trade names of or used by the Seller,  or any derivative  thereof,  as
          all or part of a corporate or trade name;

     (c)  All  investment  securities,  cash and cash  equivalents  and customer
          notes receivable relating to Business No. 1;

     (d)  All  inventory  of  Business  No. 1 which  shall be valued on a moving
          average basis at the lower of cost of  acquisition,  less any trade or
          cash discounts, or market;

     (e)  All accounts  receivable and vendor  receivables  relating to Business
          No. 1;

     (f)  All prepaid  expenses  applicable to Business No. 1, including but not
          limited to all prepaid software licenses;

     (g)  All vendor rebates, spiff money, retainage amounts under any contracts
          and any customer deposits relating to Business No. 1;

     (h)  All distribution  contracts and  authorizations  of Seller relating to
          Business No. 1;

     (i)  All base  artwork,  photo  materials,  plates  (if  owned by  Seller),
          separations  and other  materials that are used by Seller for printing
          brochures  and  promotional   materials   including  all  intellectual
          property rights therein relating to Business No. 1;

     (j)  The  assignment  of any  telephone  numbers  used in Business No. 1 of
          Seller;

     (k)  The entire right,  title,  benefit and interest of Seller now existing
          or  hereafter   arising,   in  or  to  all  indemnities,   guaranties,
          warranties,  claims  and  choses of action  of  Seller  against  other
          parties with respect to  Purchased  Assets No. 1,  including by way of
          example and not limitation,  any rights under  insurance  policies and
          any other rights thereunder, but only with respect to Purchased Assets
          No. 1;

                                        6
<PAGE>
     (l)  Seller's rights under the agreements set forth in Schedule 2.2(l) with
          respect  to the  parties  set forth  therein,  pursuant  to which such
          parties  agreed  not  to  disclose,  use  or  communicate  information
          regarding such parties' business (which is part of Business No. 1) and
          not to engage in certain activities competitive with Business No. 1.

     (m)  All other fees,  assets,  property,  business and going concern value,
          and  rights  of  Seller  (including  the  rights  under  covenants  or
          agreements not to disclose confidential information or not to compete,
          if any) and rights under the  respective  asset  purchase  agreements,
          stock purchase  agreements or other  documents set forth on Disclosure
          Schedule  2.2(m) (and  related  documents)  pursuant  to which  Seller
          acquired  certain  of the  assets  of the  parties  set  forth in such
          Disclosure Schedule.

2.3  Assets  to  be  Sold  by  Seller  and  Purchased  by  Purchaser  No.  2.
     -----------------------------------------------------------------------
     At the Closing of this Agreement, Purchaser No. 2 shall purchase and Seller
     shall sell all the assets of Seller used in Business  No. 2, except for the
     Excluded  Assets  relating to Business  No. 2. The  Purchased  Assets No. 2
     shall include, but not be limited to:

     (a)  The tangible  personal property and assets of Seller of every kind and
          description,  real,  personal  or  mixed,  wherever  located,  used in
          Business  No. 2,  including  without  limitation,  all such  assets as
          reflected on the May 31, 2000 Pro Forma Balance Sheet No. 2 (excepting
          those assets disposed of, and including those assets acquired,  in the
          ordinary  course of  business  since the date of the May 31,  2000 Pro
          Forma Balance Sheet No. 2).

     (b)  All  intangible  assets of Seller  which are used in Business No. 2 of
          Seller,  including without limitation,  all purchase orders,  contract
          rights and  agreements,  work in  process,  customer  lists,  supplier
          agreements,  patents,  trademarks  and service  marks  (including  the
          goodwill  associated  with  the  marks),  office  supplies,   computer
          programs,  claims of the Seller, the right to use of the corporate and
          trade names of or used by the Seller,  or any derivative  thereof,  as
          all or part of a corporate or trade name;

     (c)  All  investment  securities,  cash and cash  equivalents  and customer
          notes receivable relating to Business No. 2;

                                        7
<PAGE>
     (d)  All  inventory  of  Business  No. 2 which  shall be valued on a moving
          average basis at the lower of cost of  acquisition,  less any trade or
          cash discounts, or market;

     (e)  All accounts  receivable and vendor  receivables  relating to Business
          No. 2;

     (f)  All prepaid  expenses  applicable to Business No. 2, including but not
          limited to all prepaid software licenses;

     (g)  All of Seller's fixed rate  contracts and time and material  contracts
          relating to Business No. 2;

     (h)  All vendor rebates, spiff money, retainage amounts under any contracts
          and any customer deposits relating to Business No. 2;

     (i)  All of Seller's service contracts relating to Business No. 2;

     (j)  All distribution  contracts and  authorizations  of Seller relating to
          Business No. 2;

     (k)  All base  artwork,  photo  materials,  plates  (if  owned by  Seller),
          separations  and other  materials that are used by Seller for printing
          brochures  and  promotional   materials   including  all  intellectual
          property rights therein relating to Business No. 2;

     (l)  The  assignment  of any  telephone  numbers  used in Business No. 2 of
          Seller;

     (m)  The entire right,  title,  benefit and interest of Seller now existing
          or  hereafter   arising,   in  or  to  all  indemnities,   guaranties,
          warranties,  claims  and  choses of action  of  Seller  against  other
          parties with respect to  Purchased  Assets No. 2,  including by way of
          example and not limitation,  any rights under  insurance  policies and
          any other rights thereunder, but only with respect to Purchased Assets
          No. 2;

     (n)  Seller's rights under the agreements set forth in Schedule 2.3(n) with
          respect  to the  parties  set forth  therein,  pursuant  to which such
          parties  agreed  not  to  disclose,  use  or  communicate  information
          regarding such parties' business (which is part of Business No. 2) and
          not to engage in certain  activities  competitive with Business No. 2;
          and

                                        8
<PAGE>
     (o)  All other fees,  assets,  property,  business and going concern value,
          and  rights  of  Seller  (including  the  rights  under  covenants  or
          agreements not to disclose confidential information or not to compete,
          if any) and rights under the  respective  asset  purchase  agreements,
          stock purchase  agreements or other  documents set forth on Disclosure
          Schedule  2.3(o) (and  related  documents)  pursuant  to which  Seller
          acquired  certain  of the  assets  of the  parties  set  forth in such
          Disclosure Schedule.

2.4  Excluded  Assets.
     ----------------

     The Excluded Assets are set forth on Exhibit A hereto.

2.5  Lease  Agreements.
     -----------------

     Seller is the lessee under certain lease agreements calling for payments of
     more than  $5,000.00  per year  covering  the  following  real and personal
     properties:

     (i)  See attached Disclosure Schedule 2.5.

     At the Closing, Seller and Purchaser No. 1 or Purchaser No. 2 shall execute
     necessary  documentation  for the  assignment  of these  leases  and all of
     Seller's right and interest  thereunder to Purchaser No. 1 and/or Purchaser
     No. 2, as agreed upon by the  parties  and, at the  Closing,  Seller  shall
     assign all its rights and interest in said leases to Purchaser No. 1 and/or
     Purchaser No. 2, as  applicable.  Purchaser No. 1 and Purchaser No. 2 agree
     to indemnify and hold Seller  harmless  from any liability  with respect to
     the aforementioned leases occurring after the Closing Date which is assumed
     by such party. To the extent that the assignment of any lease shall require
     the consent of other parties  thereto,  this Agreement shall not constitute
     an assignment  thereof and Seller shall obtain any such necessary  consents
     or assignments by the Closing, or as reasonably possible after the Closing.

                                        9
<PAGE>
2.6  Instruments  of  Transfer.
     -------------------------

     Except as otherwise  provided  herein,  at Closing,  Seller will deliver to
     Purchaser  No. 1 and  Purchaser  No. 2,  respectively,  such bills of sale,
     endorsements,  assignments  and other good and  sufficient  instruments  of
     transfer and  assignment  as shall be effective to vest in Purchaser  No. 1
     and  Purchaser  No. 2, as  applicable,  good title and  interest  in and to
     Purchased  Assets No. 1 and  Purchased  Assets No. 2,  respectively.  At or
     after the Closing, and without further  consideration,  Seller will execute
     and deliver to Purchaser  No. 1 and Purchaser  No. 2, as  applicable,  such
     further  instruments  of conveyance and transfer and take such other action
     as Purchaser No. 1 and/or  Purchaser No. 2 may reasonably  request in order
     to more effectively convey and transfer to Purchaser No. 1 and/or Purchaser
     No. 2, as applicable,  any of the Purchased  Assets No. 1 and/or  Purchased
     Assets No. 2 or for aiding and  assisting  and  collecting  and reducing to
     possession  and  exercising   rights  with  respect  thereto.   Seller  and
     Shareholder  agree to use their  best  efforts  to obtain  and  deliver  to
     Purchaser  No.  1 and  Purchaser  No.  2,  as  applicable,  such  consents,
     approvals,  assurances and statements from third parties as Purchaser No. 1
     and  Purchaser  No. 2, as  applicable,  may  reasonably  require  in a form
     reasonably satisfactory to Purchaser No. 1 and Purchaser No. 2. In addition
     to the  foregoing,  Seller will deliver to Purchaser No. 1 and Purchase No.
     2, as applicable, the originals or copies of all of Seller's books, records
     and other data relating to Purchased  Assets No. 1 and Purchased Assets No.
     2, respectively;  and simultaneously with such delivery,  Seller shall take
     all  such  acts  as may be  necessary  to put  Purchaser  No.  1 in  actual
     possession,  and  operating  control  of  Purchased  Assets  No.  1 and put
     Purchaser No. 2 in actual  possession,  and operating  control of Purchased
     Assets No. 2. Seller shall cooperate with Purchaser No. 1 and Purchaser No.
     2 to permit  such  parties,  if  possible,  to enjoy  Seller's  ratings and
     benefits under workmen's  compensation  laws and unemployment  compensation
     laws to the extent permitted by such laws.

2.7     Instruments  Giving  Certain  Powers  and  Rights.
        -------------------------------------------------

     At the Closing,  Seller shall,  by appropriate  instrument,  constitute and
     appoint  Purchaser No. 1 and Purchaser No. 2, their  respective  successors
     and  assigns,  the true and lawful  attorney  of Seller  with full power of
     substitution,  in the name of Purchaser  No. 1 and/or  Purchaser  No. 2, as
     applicable,  or the name of  Seller,  on behalf of and for the  benefit  of
     Purchaser No. 1 and Purchaser No. 2, as applicable, to collect all accounts
     receivable and/or vendor  receivables and other items being transferred and
     assigned to  Purchaser  No. 1 and/or  Purchaser  No. 2, as  applicable,  as
     provided herein, to endorse,  without  recourse,  any and all checks in the
     name of Seller the proceeds of which  Purchaser No. 1 and/or  Purchaser No.
     2, as applicable,  is entitled to hereunder, to institute and prosecute, in
     the name of Seller or  otherwise,  all  proceedings  which  Purchaser No. 1
     and/or Purchaser No. 2, as applicable, may deem proper in order to collect,

                                       10
<PAGE>
     assert or enforce any claim,  right or title of any kind in or to Purchased
     Assets No. 1 and/or  Purchased  Assets No. 2, as applicable,  to defend and
     compromise any and all actions,  suits and proceedings in respect of any of
     Purchased Assets No. 1 and/or Purchased Assets No. 2, as applicable, and to
     do all such acts and  things in  relation  thereto  as such  party may deem
     advisable.  Purchaser No. 1 and/or  Purchaser No. 2, as  applicable,  shall
     provide  Seller with notice of any  collection  action(s)  instituted by it
     under this provision.  Seller agrees that the foregoing  powers are coupled
     with  an  interest  and  shall  be  irrevocable  by  Seller,   directly  or
     indirectly,  by the  dissolution  of  Seller  or in any  manner  or for any
     reason.  Seller further agrees that Purchaser No. 1 and/or Purchaser No. 2,
     as  applicable,  shall  retain for its own  respective  account any amounts
     collected  pursuant  to the  foregoing  powers,  and  Seller  shall  pay or
     transfer to Purchaser No.1 and/or  Purchaser No. 2, as  applicable,  if and
     when  received,  any amounts  which  shall be received by Seller  after the
     Closing in respect of any such  receivables  or other  assets,  properties,
     rights or business to be transferred and assigned to Purchaser No. 1 and/or
     Purchaser No. 2, as provided  herein.  Seller  further  agrees that, at any
     time or from time to time after the Closing,  it will,  upon the request of
     Purchaser  No.  1  and/or  Purchaser  No. 2 and at  Seller's  expense,  do,
     execute,  acknowledge  and  deliver,  or will  cause to be done,  executed,
     acknowledged or delivered,  all such further reasonable acts,  assignments,
     transfers,  powers of attorney or assurances as may be required in order to
     further  transfer,  assign,  grant,  assure and confirm to Purchaser  No. 1
     and/or  Purchaser  No.  2,  as  applicable,  or to aid  and  assist  in the
     collection or granting of  possession  by Purchaser No. 1 and/or  Purchaser
     No. 2, as  applicable,  of any of the  Purchased  Assets  No. 1 and/or  the
     Purchased  Assets No. 2, or to vest in Purchaser No. 1 good and  marketable
     title to  Purchased  Assets No. 1 and to vest in  Purchaser  No. 2 good and
     marketable title to Purchased Assets No. 2.

     To the extent that any assignment does not result in a complete transfer of
     the  contracts to Purchaser No. 1 and/or  Purchaser  No. 2, as  applicable,
     because of a provision in any contract against  Seller's  assignment of any
     its right  thereunder,  Seller shall  cooperate  with  Purchaser  No. 1 and
     Purchaser No. 2 in any reasonable manner proposed by Purchaser No. 1 and/or
     Purchaser  No.  2,  as  applicable,  to  complete  the  acquisition  of the
     contracts and Seller's rights,  benefits and privileges thereunder in order
     to fulfill and carry out Seller's  obligations  under this Agreement.  Such
     additional  action may include,  but is not limited to: (i) entering into a
     subcontract  between Seller and Purchaser No. 1 and/or  Purchaser No. 2, as
     applicable,  which allows such party to perform  Seller's duties under such
     contracts and to enforce Seller's rights thereunder;  or (ii) entering into
     a new multi-party  agreement with such customers which allows Purchaser No.
     1 and/or Purchaser No. 2, as applicable,  to perform  Seller's  obligations
     and enforce Seller's rights under the contracts.

                                       11
<PAGE>
                                       3.
                            ASSIGNMENT OF LIABILITIES
                            -------------------------

                                       12
<PAGE>
3.1     Liabilities  to  be  Paid  Off at Closing or Assumed by Purchaser No. 1.
        -----------------------------------------------------------------------

                                       13
<PAGE>
     A.   At the Closing,  Purchaser No. 1 shall assume and pay off or discharge
          when due (and  secure the release of Seller and  Shareholder  from any
          and  all  personal   liability  or  guaranty   with  respect  to  such
          obligation), the following:

          (i)  Seller's  obligation to Deutsche Financial Services Company under
               a floor plan credit facility,  the outstanding amount of which on
               June 22, 2000 is $637,525.53,  plus accrued  interest,  and as of
               the Closing Date is  $1,085,264.49,  which is collateralized by a
               security interest in Seller's assets;

          (ii) Seller's  obligation to Deutsche Financial Services Company under
               a line of credit  facility,  the  outstanding  amount of which on
               June 22, 2000 is $970,225.15,  plus accrued  interest,  and as of
               the Closing Date is  $703,887.98,  which is  collateralized  by a
               security interest in Seller's assets; and

               Seller's  obligation to Deutsche  Financial  Services Company for
               both open and pending  approvals  for  purchases  of inventory of
               approximately  $180,826.39 as of the Closing Date,  which are not
               reflected in the above outstanding line of credit balance;

                                       14
<PAGE>
          (iii)Seller's  obligation to IBM Credit Corporation under a floor plan
               credit facility,  the outstanding amount of which on May 31, 2000
               is $13,058.43,  plus accrued interest, and as of the Closing Date
               is $20,271.86,  which is collateralized by a security interest in
               Seller's assets;

          (iv) Seller's  obligation  to Western  State Bank of St.  Paul under a
               loan agreement,  the outstanding amount of which on June 22, 2000
               is $200,000.00, plus accrued interest, and as of the Closing Date
               is $205,333.34;

          (v)  Seller's obligation to R.A. Tickle under a loan arrangement,  the
               outstanding amount of which on June 22, 2000 is $255,454.76, plus
               accrued interest, and as of the Closing Date is $259,393.91; and

                                       15
<PAGE>
          (vi) Seller's  obligation  to Ford  Communications  in the  amount  of
               $34,687.09.

     The Assumed Liabilities to be paid off as set forth in Sections 3.1 A. (i),
     (ii), (iii), (iv), (v) and (vi), as may be incurred, increased or decreased
     since  the May 31,  2000 Pro  Forma  Balance  Sheet  No. 1 to the Pro Forma
     Balance Sheet No. 1 for  operations  in the ordinary  course of business or
     any other  transaction  permitted  by this  Agreement,  and  subject to the
     satisfaction of the Net Asset Amount No. 1 requirement set forth in Section
     4.1(d) as of the Closing Date.

     It is intent of the parties that  Purchaser No. 1 shall pay off at Closing,
     or assume and pay off or discharge when due, all  obligations of Seller set
     forth in Section 3.1 A above (subparagraphs (iv) and (v) shall be paid off)
     for which the Shareholder has personal liability and Purchaser No. 1 agrees
     to use its best efforts to secure

     the release of Shareholder  from such  liability  after the Closing if such
     releases are not secured prior to Closing.

     B.   All of the trade accounts  payable of the Seller  relating to Business
          No. 1 incurred  in the  ordinary  course of business  consistent  with
          Seller's  prior  practices,   the  outstanding   amount  of  which  is
          $287,550.33  on June 23, 2000,  and as may be  incurred,  increased or
          decreased since June 23, 2000 to the Pro Forma Balance Sheet No. 1 for
          operations in the ordinary course of business or any other transaction
          provided by this Agreement, and subject to the satisfaction of the Net
          Asset Amount No. 1 requirement  set forth in Section  4.1(d) as of the
          Closing Date.

3.2  Liabilities  to  be  Paid  Off at Closing or Assumed by Purchaser No. 2.
     -----------------------------------------------------------------------

     At the Closing,  Purchaser No. 2 shall assume and pay off or discharge when
     due (and  secure the  release of Seller  and  Shareholder  from any and all
     personal  liability  or  guaranty  with  respect to such  obligation),  the
     following:

     A.   All of the trade accounts  payable of the Seller  relating to Business
          No. 2 incurred  in the  ordinary  course of business  consistent  with
          Seller's  prior  practices,   the  outstanding   amount  of  which  is
          $81,103.94  on June 23,  2000,  and as may be  incurred,  increased or
          decreased since June 23, 2000 for operations in the ordinary course of
          business  or any other  transaction  provided by this  Agreement,  and
          subject to the  satisfaction of the Net Asset Amount No. 2 requirement
          set forth in Section 4.2(d) as of the Closing Date.

                                       16
<PAGE>
3.3  Executory  Contracts  to  be  Assumed  by  Purchaser  No.  1.
     ------------------------------------------------------------

     At the Closing, Purchaser No. 1 shall assume and pay, perform and discharge
     when due the following:

     (i)  All of the  obligations  and  liabilities  of Seller arising after the
          Closing under the contracts described in Section 2.2.

     (ii) All future  liabilities  for merchandise in transit FOB shipping point
          relating to Business No. 1 which has not been received  and/or entered
          into  inventory  by Seller  and for  which no bill has been  posted by
          Seller as of the Closing.

3.4  Executory  Contracts  to  be  Assumed  by  Purchaser  No.  2.
     ------------------------------------------------------------

     At the Closing, Purchaser No. 2 shall assume and pay, perform and discharge
     when due the following:

     (i)  All of the  obligations  and  liabilities  of Seller arising after the
          Closing under the contracts described in Section 2.3.

     (ii) All future  liabilities  for merchandise in transit FOB shipping point
          relating to Business No. 2 which has not been received  and/or entered
          into  inventory  by Seller  and for  which no bill has been  posted by
          Seller as of the Closing.

3.5  Excluded  Liabilities.
     ---------------------

     Notwithstanding anything in this Agreement to the contrary, Purchaser No. 1
     and Purchaser No. 2 shall not assume or become  responsible  for any claim,
     liability or obligation of any nature whatsoever, whether known or unknown,
     accrued, absolute, contingent or otherwise (a "Liability") of Seller except
     Assumed   Liabilities  No.  1  and  Assumed  Liabilities  No.  2  that  are
     specifically  assumed by such party. Without limiting the generality of the
     foregoing, the following are included among the Liabilities of Seller which
     Purchaser  No. 1 and Purchase No. 2 shall not assume or become  responsible
     for (unless  specifically  included as Assumed Liabilities No. 1 or Assumed
     Liabilities No. 2):

     (a)  all Liabilities  for any Taxes whether  deferred or which have accrued
          or may accrue or become due and payable by Seller  either prior to, on
          or after the Closing Date,  including,  without limitation,  all Taxes
          and fees of a similar  nature  arising  from the sale and  transfer of
          Purchased  Assets No. 1 and Purchased  Assets No. 2 to Purchaser No. 1
          and Purchaser No. 2, respectively;

                                       17
<PAGE>
     (b)  all Liabilities and obligations to directors,  officers,  employees or
          agents of Seller, including,  without limitation,  all Liabilities and
          obligations  for  wages,  salary,   bonuses,   commissions,   vacation
          (provided that Seller's  employees that become  employees of Purchaser
          No. 1 and/or Purchaser No. 2 shall be able to take any unused vacation
          days for the current year during the remaining  portion of the year as
          part of  Purchaser's  No. 1  and/or  Purchaser's  No.  2 own  vacation
          program for its employees) or severance pay, profit sharing or pension
          benefits, and all Liabilities and obligations arising under any bonus,
          commission,  salary or  compensation  plans or  arrangements,  whether
          accruing prior to, on or after the Closing Date;

     (c)  all  Liabilities   and   obligations   with  respect  to  unemployment
          compensation  claims and workmen's  compensation claims and claims for
          race, age and sex  discrimination  or sexual  harassment or for unfair
          labor practice based on or arising from occurrences,  circumstances or
          events, or exposure to conditions,  existing or occurring prior to the
          Closing  Date  and for  which  any  claim  may be  asserted  by any of
          Seller's employees, prior to, on or after the Closing Date;

     (d)  all  Liabilities  of Seller to third  parties for  personal  injury or
          damage to property based on or arising from occurrences, circumstances
          or events,  or exposure to conditions,  existing or occurring prior to
          the Closing  Date and for which any claim may be asserted by any third
          party prior to, on or after the Closing Date;

     (e)  all  Liabilities  and obligations of Seller arising under or by virtue
          of  federal  or state  environmental  laws  based on or  arising  from
          occurrences,  circumstances  or events,  or  exposure  to  conditions,
          existing  or  occurring  prior to the  Closing  Date and for which any
          claim may be asserted prior to, on or after the Closing Date;

     (f)  all  Liabilities  of Seller  including  any costs of  attorneys'  fees
          incurred in connection therewith,  for litigation,  claims, demands or
          governmental  proceedings  arising from occurrences,  circumstances or
          events,  or exposure to conditions  occurring or existing prior to the
          Closing Date;

     (g)  all Liabilities  based on any theory of liability or product  warranty
          with respect to any product  manufactured or sold prior to the Closing
          Date and for which any claim may be asserted by any third party, prior
          to, on or after the Closing Date;

                                       18
<PAGE>
     (h)  all attorneys'  fees,  accountants' or auditors' fees, and other costs
          and expenses incurred by Seller and/or  Shareholder in connection with
          the negotiation,  preparation and performance of this Agreement or any
          of the transactions contemplated hereby;

     (i)  all Liabilities of Seller in connection with the Excluded Assets;

     (j)  any  Liabilities  of Seller  with  respect to any  options,  warrants,
          agreements  or  convertible  or other rights to acquire  shares of its
          capital stock of any class; and

     (k)  any Liabilities of Seller incurred incident to any indemnification for
          breach  of  any  representations,   warranties,  covenants,  or  other
          agreements  made by Seller  under any of the  asset  purchase,  stock,
          reorganization,  or other legal transaction(s) set forth in Disclosure
          Schedule 2.2(m) and/or 2.3(o).

     (l)  any  Liabilities  of Seller with respect to any loans or advances made
          by Shareholder or any Affiliate to Seller;

     (m)  all other debts, Liabilities,  obligations,  contracts and commitments
          (whether  direct or indirect,  known or unknown,  contingent or fixed,
          liquidated or  unliquidated,  and whether now or hereinafter  arising)
          arising out of or relating to the  ownership,  operation or use of any
          of Purchased Assets No. 1 and/or Purchased Assets No. 2 on or prior to
          the Closing Date or the conduct of the Business No. 1 of Seller and/or
          Business  No. 2 of Seller prior to the Closing  Date,  except only for
          the liabilities  and  obligations to be assumed or paid,  performed or
          discharged  by Purchaser  No. 1 and/or  Purchaser  No. 2  constituting
          Assumed Liabilities No. 1 or Assumed Liabilities No. 2.

Seller  shall pay all liabilities not being assumed hereunder by Purchaser No. 1
or  Purchaser  No.  2 within the customary time for payment of such liabilities.

It  is the intent of the parties that upon Closing, all employees of Seller will
be terminated by such parties and Purchaser No. 1 or Purchaser No. 2 will extend
offers  of  employment  to  such  individuals.

                                       19
<PAGE>
                                       4.
                                CONSIDERATION FOR
                                -----------------
                PURCHASED ASSETS NO. 1 AND PURCHASED ASSETS NO. 2
                -------------------------------------------------

4.1  Purchase  Price  No.  1  for  Purchased  Assets  No.  1.
     -------------------------------------------------------

     Subject  to the other  terms of this  Agreement,  Purchase  Price No. 1 for
     Purchased Assets No. 1 shall be the sum of:

     (a)  Zero Dollars ($0.00);

     (b)  The liabilities assumed or paid off at Closing under Section 3.1; and

     (c)  Any amount that may be paid  pursuant to Section 4.6 that is allocated
          to Purchase Price No. 1.

     The sum of the items contained in Sections 4.1(a),  (b) and (c) above shall
     be adjusted by the amount  determined  under Sections  4.1(d) and 4.1(e) as
     follows:

     (d)  If Net Asset Amount No. 1 of Seller as of the Closing Date as shown on
          the Pro Forma Balance Sheet No. 1 is less than $(29,071.00),  Purchase
          Price No. 1 shall be  decreased  on a  dollar-for-dollar  basis to the
          extent of such deficit.  If Net Asset Amount No. 1 of Seller as of the
          Closing Date as shown on Pro Forma Balance Sheet No. 1 is greater than
          $(29,071.00),   Purchase   Price  No.  1  shall  be   increased  on  a
          dollar-for-dollar   basis  to  the   extent   of  such   excess.   The
          determination  of Net Asset  Amount  No. 1 shall be made in the manner
          provided for in Section 5.1 hereof.

     (e)  The Purchase  Price No. 1 shall be reduced by the sum of $5,000.00 for
          each  employee  of  Seller  who  fails  to  commence  employment  with
          Purchaser  No. 1 and/or  Purchaser No. 2 upon the Closing Date and for
          each employee who would leave the employment of Purchaser No. 1 and/or
          Purchaser  No. 2 before the  expiration  of ninety  (90) days from the
          Closing Date other than due to such  employee's  death,  disability or
          the  agreement of  Purchaser  No. 1,  Purchaser  No. 2, and Seller and
          Shareholder to terminate  employee.  Purchaser No. 1 acknowledges that
          S. Hoffman and D. Berry have provided Seller with termination notices,
          which terminations shall not be subject to this provision.

4.2  Purchase  Price  No.  2  for  Purchased  Assets  No.  2.
     -------------------------------------------------------

     Subject  to the  other  terms of this  Agreement,  the  Purchase  Price for
     Purchased Assets No. 2 shall be the sum of:

     (a)  One Hundred Fifty Thousand Dollars ($150,000.00);

     (b)  The liabilities assumed or paid off at Closing under Section 3.2; and

     (c)  Any amount that may be paid  pursuant to Section 4.6 that is allocated
          to Purchase Price No. 2.

          The sum of the items  contained in Sections  4.2(a),  (b), (c),  above
          shall be adjusted by the amount  determined  under Section 4.2(d),  as
          follows:

     (d)  If Net Asset Amount No. 2 of Seller as of the Closing Date as shown on
          the Pro Forma Balance Sheet No. 2 is less than  $570,253.00,  Purchase
          Price No. 2 shall be  decreased  on a  dollar-for-dollar  basis to the
          extent of such deficit.  If Net Asset Amount No. 2 of Seller as of the
          Closing Date as shown on Pro Forma Balance Sheet No. 2 is greater than
          $570,253.00,   Purchase   Price  No.  2  shall  be   increased   on  a
          dollar-for-dollar   basis  to  the   extent   of  such   excess.   The
          determination  of Net Asset  Amount  No. 2 shall be made in the manner
          provided for in Section 5.1 hereof.

4.3  Payment  of  the  Purchase  Price  for  Purchased  Assets  No.  1.
     -----------------------------------------------------------------

     Subject  to  the  conditions,  covenants,  representations  and  warranties
     hereof, at Closing, Purchaser No. 1 shall deliver:

     (a)  A  promissory  note in the amount of $0.00,  as may be adjusted as set
          forth in Section 4.1(d) and/or Section  4.1(e).  Such  promissory note
          shall bear  interest at the prime rate of Chase  Manhattan  Bank as of
          the date of Closing.  The  principal  of the  promissory  note and all
          accrued  interest  shall be payable in full  ninety (90) days from the
          Closing  Date. A copy of said  promissory  note is attached  hereto as
          Exhibit "B".

     (b)  The Assumed Liabilities No. 1 assumed or paid off under Section 3.1.

                                       20
<PAGE>
4.4  Payment  of  the  Purchase  Price  for  Purchased  Assets  No.  2.
     -----------------------------------------------------------------

     Subject  to  the  conditions,  covenants,  representations  and  warranties
     hereof, at Closing, Purchaser No. 2 shall deliver:

     (a)  A promissory note in the amount of $150,000.00,  as may be adjusted as
          set forth in Section 4.2(d).  Such promissory note shall bear interest
          at the prime rate of Chase  Manhattan  Bank as of the date of Closing.
          The principal of the promissory note and all accrued interest shall be
          payable in full ninety (90) days from the Closing Date. A copy of said
          promissory note is attached hereto as Exhibit "B-1".

     (b)  The Assumed Liabilities No. 2 assumed or paid off under Section 3.2.

4.5  Allocation  of  Purchase  Price.
     -------------------------------

     Purchase  Price  No.  1 to be  paid  to  Seller  hereunder,  including  the
     liabilities  assumed or paid by  Purchaser  No. 1 pursuant to Section  3.1,
     shall be  allocated  as set forth on  Exhibit C attached  hereto.  Purchase
     Price  No. 2 to be paid to  Seller  hereunder,  including  the  liabilities
     assumed or paid by  Purchaser  No. 2  pursuant  to  Section  3.2,  shall be
     allocated as set forth in Exhibit C-1 attached  hereto.  Seller,  Purchaser
     No. 1,  Purchaser  No. 2 and  Shareholder  agree  that each  shall act in a
     manner  consistent with such allocation in (a) filing Internal Revenue Form
     8594; and (b) in paying sales and other  transfer taxes in connection  with
     the purchase and sale of assets pursuant to this Agreement.

4.6  Potential  Adjustment  to  Purchase  Price.
     ------------------------------------------

     If the net  profits  before  taxes  ("NPBT") of the  Purchaser  No. 1's and
     Purchaser No. 2's  Minneapolis/St.  Paul Divisions in the aggregate  during
     any of fiscal  years 2000 (July 3, 2000 to January 5,  2001),  2001,  2002,
     2003, 2004 and (January 6, 2005 to July 2, 2005) exceed the applicable NPBT
     threshold for such year set forth below:

               Fiscal Year 2000   -   (Closing Date to January 5, 2001-pro rate
                                      $650,000.00)
               Fiscal Year 2001   -   $650,000
               Fiscal Year 2002   -   $650,000
               Fiscal Year 2003   -   $650,000
               Fiscal Year 2004   -   $650,000
              (January 6, 2005
                to July 2, 2005)  -   Pro  rate  $650,000

                                       21
<PAGE>
     Purchaser No. 1 and Purchaser No. 2 (according to the percentages set forth
below)  shall  pay  Seller,  by  bank  check  or  wiring within ninety (90) days
following  the end of the fiscal year, an amount equal to fifty percent (50%) of
the  aggregate  NPBT  of Purchaser No. 1's and Purchaser No. 2's Minneapolis/St.
Paul  Divisions  in  excess  of  the  NPBT  Threshold for the applicable year or
portion  thereof,  subject  to  a  cumulative  limitation of Seven Million Three
Hundred Thousand Dollars ($7,300,000.00) during such aggregate period.  Any NPBT
shortfall  in  any  year  shall  not  be  offset  against any excess NPBT in any
subsequent  year(s)  hereunder, it being the intent of the parties that the NPBT
Threshold  set  forth  herein  shall  apply  to each applicable year separately,
subject,  however,  to  the cumulative limitation of Seven Million Three Hundred
Thousand  Dollars  ($7,300,000.00)  during  such  aggregate  period.  Such  cash
payment  by  Purchaser  No.  1  and Purchaser No. 2 shall be additional Purchase
Price  which  will  be  added to the good will allocation of the Purchase Price.
Commencing  on  the installation of the Astea (MIS and Accounting) System at the
Purchaser's  No.  1 and Purchaser's No. 2 Minneapolis/St. Paul Divisions, a 1.5%
MAS  royalty  fee  on  gross  sales  by  Purchaser No. 1's and Purchaser No. 2's
respective  Minneapolis/St.  Paul  Divisions  shall  be  made  incident  to said
determination.  For  each  subsequent year described above in this paragraph for
which  Purchaser  No.  1  and  Purchaser No. 2 may be required to pay additional
Purchase Price, the parties shall, in good faith, agree upon the MAS royalty fee
to  be  charged  hereunder  based  on  the  level  of services and support being
provided  by  Purchaser  No.  1  and  Purchaser  No.  2  to  its  respective
Minneapolis/St. Paul Division.  Provided, however, such MAS royalty fee shall be
1.5% if the parties are unable to come to an agreement for each subsequent year.
For  purposes of this Section, the term "Minneapolis/St. Paul Division" shall be
defined  as Business No. 1 and Business No. 2 acquired from Seller, by Purchaser
No.  1  and  Purchaser No. 2, respectively.  Purchaser No. 1 and Purchaser No. 2
shall  pay  their  respective  percentage  of  any  amounts due hereunder, which
percentage  shall be predicated on the respective NPBT contribution made by each
of  their  Minneapolis/St.  Paul  Divisions  to the computation set forth above.

     For  purposes of this  Section,  the term "NPBT"  shall mean the net profit
     before taxes of Purchaser  No. 1's and  Purchaser  No. 2's  Minneapolis/St.
     Paul Divisions during the applicable  period.  The NPBT shall be determined
     by the  internally-generated  financial  statements  of Purchaser No. 1 and
     Purchaser No. 2 determined in the manner set forth above in accordance with
     generally accepted accounting  principles,  consistently applied,  provided
     that no effect shall be given to any gain or loss  attributable  to sale of
     assets by said  Divisions  not in the  ordinary  course of  business.  Said
     determination  of NPBT shall be subject to verification as described below.
     In addition,  for purposes of  determining  NPBT for any  particular  year,
     except as noted  above,  no item of income or expense  will be allocated by
     Purchaser No. 1 or Purchaser  No. 2 to Purchaser  No. 1's and/or  Purchaser
     No. 2's  Minneapolis/St.  Paul  Division  unless such items are  reasonably
     calculated to contribute to the increase in profits of such Minneapolis/St.
     Paul Divisions, it being the intent of the parties that the Purchaser No. 1
     and  Purchaser  No. 2 shall  exercise the utmost good faith with respect to
     allocations  of income and expense to Purchaser  No. 1's and  Purchaser No.
     2's Minneapolis/St. Paul Division. Incident to the determination of NPBT of
     Purchaser No. 1's and Purchase No. 2's  Minneapolis/St.  Paul Division,  no
     compensation  of any executive or other  employee of Purchaser No. 1 and/or
     Purchaser No. 2 or their respective affiliates who do not work directly for
     Purchaser No. 1's and/or  Purchaser No. 2's  Minneapolis/St.  Paul Division
     shall be allocated to such division. Any payment made to Seller pursuant to
     this Section 4.6 shall not be charged against the NPBT for any year.

                                       22
<PAGE>
     Within  ninety  (90)  days  after  the end of each  fiscal  year or  period
     described  herein,  Purchaser  No. 1 and  Purchaser  No. 2 will  deliver to
     Seller  a copy of the  report  of NPBT  prepared  by  Purchaser  No.  1 and
     Purchaser  No.  2  for  the  subject   period  along  with  any  supporting
     documentation  reasonably  requested  by Seller.  Within  thirty  (30) days
     following delivery to Seller of such report, Seller shall have the right to
     object in writing to the results contained in such determination. If timely
     objection  is  not  made  by  the  Seller  to  such   determination,   such
     determination   shall  become  final  and  binding  for  purposes  of  this
     Agreement.  If timely  objection is made by Seller to  Purchaser  No. 1 and
     Purchase No. 2 and Seller and  Purchaser No. 1 and Purchaser No. 2 are able
     to resolve their  differences  in writing within thirty (30) days following
     the expiration of the thirty-day  (30-day) period,  then such determination
     shall become final and binding as it regards to this  Agreement.  If timely
     objection  is made by Seller to  Purchaser  No. 1 and  Purchaser  No. 2 and
     Seller and  Purchaser No. 1 and Purchaser No. 2 are unable to resolve their
     differences  in writing within thirty (30) days following the expiration of
     the thirty-day (30-day) period, then all disputed matters pertaining to the
     report  shall  be  submitted  to  and  reviewed  by  an   arbitrator   (the
     "Arbitrator")  which shall be an  independent  accounting  firm selected by
     Purchaser  No. 1 and  Purchaser  No. 2 and Seller.  If Purchaser  No. 1 and
     Purchaser  No. 2 and Seller are unable to agree  promptly on an  accounting
     firm to serve as the  Arbitrator,  each  shall  select by no later than the
     30th day following the  expiration of the  sixty-day  (60-day)  period,  an
     accounting firm, and the two selected  accounting firms shall be instructed
     to select promptly another independent accounting firm, such newly selected
     firm to serve as the  Arbitrator.  The  Arbitrator  shall consider only the
     disputed matters  pertaining to the determination and shall act promptly to
     resolve all disputed matters, and its decision with respect to all disputed
     matters shall be final and binding upon Seller and  Purchaser.  Expenses of
     the  Arbitration  shall be borne  one-half  (1/2)  by  Purchaser  No. 1 and
     Purchaser  No.  2 and  one-half  (1/2)  by  Seller.  Each  party  shall  be
     responsible for its own attorney and accounting fees.

4.7  Certain  Closing  Expenses.
     --------------------------

     Except as set forth below,  Seller shall be  responsible  for and shall pay
     all federal,  state and local sales tax (if any), documentary stamp tax and
     all other  duties,  or other  like  charges  properly  payable  upon and in
     connection  with the conveyance and transfer of the Purchased  Assets No. 1
     by  Seller  to  Purchaser  No. 1 and the  conveyance  and  transfer  of the
     Purchased Assets No. 2 by Seller to Purchaser No. 2.

                                       23
<PAGE>
                                       5.
                            POST-CLOSING ADJUSTMENTS
                            ------------------------

5.1Within  sixty  (60)  days  after  the Closing Date (the "Post Closing Date"),
Seller's Accountant will deliver to Purchaser No.1 and to Purchaser No. 2 copies
of  Pro  Forma  Balance  Sheet  No.  1  and  Pro  Forma  Balance  Sheet  No.  2,
respectively,  prepared  by  Seller's  Accountant  along  with  any  supporting
documentation  reasonably  requested  by  Purchaser  No.  1  or  Purchaser No. 2
reflecting  Net  Asset Amount No. 1 and Net Asset Amount No. 2 as of the Closing
which shall be defined as the total of the Purchased Assets No. 1 less the total
of the Assumed Liabilities No. 1 relating to Business No. 1, as reflected on Pro
Forma  Balance  Sheet  No. 1 (the "Net Asset Report No. 1") and the total of the
Purchased  Assets No. 2 less the total of the Assumed Liabilities No. 2 relating
to Business No. 2, as reflected on Pro Forma Balance Sheet No. 2 (the "Net Asset
Report  No.  2").  The  Pro  Forma Balance Sheet No. 1 and the Pro Forma Balance
Sheet  No.  2  shall  be  prepared  using the same accounting methods, policies,
practices  and  procedures,  with  consistent  classifications,  judgments,
estimations and methodologies as used in the preparation of the May 31, 2000 Pro
Forma  Balance  Sheet  No. 1 and the May 31, 2000 Pro Forma Balance Sheet No. 2.
Within  thirty  (30)  days  following  delivery  to Purchaser No. 1 of Net Asset
Report  No.  1 and to Purchaser No. 2 of Net Asset Report No. 2, Purchaser No. 1
and  Purchaser  No.  2  shall have the right to object in writing to the results
contained  therein.  If  timely  objection is not made by Purchaser No. 1 and/or
Purchaser  No.  2  to  Net  Asset Report No. 1 and/or Net Asset Report No. 2, as
applicable, Net Asset Report No. 1 and Net Asset Report No. 2 shall become final
and  binding  for  purposes  of  this Agreement.  If timely objection is made by
Purchaser  No.  1  and/or  Purchaser  No. 2 to Net Asset Report No. 1 and/or Net
Asset  Report  No.  2, and Seller and Purchaser No. 1 and/or Purchaser No. 2, as
applicable, are able to resolve their differences in writing within fifteen (15)
days  following  the  expiration  of such thirty (30) day period, then Net Asset
Report  No. 1 and/or Net Asset Report No. 2, as resolved, shall become final and
binding  as  it  relates  to  this  Agreement.  If  timely  objection is made by
Purchaser No. 1 and/or Purchaser No. 2, as applicable, to Net Asset Report No. 1
and/or  Net  Asset  Report No. 2 and Seller and Purchaser No. 1 and/or Purchaser
No.  2, as applicable, are unable to resolve their differences in writing within
such  fifteen (15) day period, then all disputed matters pertaining to Net Asset
Report No. 1 and/or Net Asset Report No. 2 shall be submitted to and reviewed by
an  arbitrator  (the "Arbitrator") which shall be an independent accounting firm
selected  by  Seller  and Purchaser No. 1 and/or Purchaser No. 2, as applicable.
If  Purchaser No. 1 and/or Purchaser No. 2, as applicable, and Seller are unable
to  agree promptly on the accounting firm to serve as the Arbitrator, each shall
select  by  not later than the seventh (7th) day following the expiration of the
Net  Asset Report objection period, a nationally recognized accounting firm, and
each  selected  accounting  firm  shall be instructed to jointly select promptly
another  nationally recognized accounting firm, such third accounting firm shall
serve  as  the  Arbitrator.  The  Arbitrator  shall  consider  only the disputed
matters  pertaining  to  the  determination and shall act promptly and fairly to
resolve  all  disputed  matters  and  its  decision with respect to all disputed
matters  shall  be  final and binding upon Seller, Purchaser No. 1 and Purchaser
No.  2,  as applicable.  The expenses of the arbitration shall be borne one-half
(1/2)  by  Purchaser  No.  1 and/or Purchaser No. 2, as applicable, and one-half
(1/2)  by  Seller.  Each  party  shall  be  responsible for its own attorney and
accounting  fees.  If  the  Net  Asset  Amount  No. 1 (as shown on the Net Asset
Report  No. 1) is less than $(29,071.00), the Purchase Price No. 1 to be paid to
Seller  shall  be decreased on a dollar-for-dollar basis for such difference and
shall  be  off-set  against  the  promissory note set forth in Section 4.3(a) or
(Section  4.4(a),  if  necessary),  then  from any payments to be made to Seller

                                       24
<PAGE>
under Section 4.6, if necessary, and then from Seller and/or Shareholder for any
deficiency, if any.  If the Net Asset Amount No. 1 is greater than $(29,071.00),
the  Purchase  Price  No.  1  to  be  paid  to  Seller  shall  be increased on a
dollar-for-dollar basis for excess by Purchaser paying to Seller by certified or
cashier's check or wire transfer such excess.  If the Net Asset Amount No. 2 (as
shown  on  the  Net  Asset  Report No. 2) is less than $570,253.00, the Purchase
Price No. 2 to be paid to Seller shall be decreased on a dollar-for-dollar basis
for  such  difference by Seller and shall be off-set against the promissory note
set forth in Section 4.4(a) (or Section 4.3(a), if necessary), then against, any
payments to be made to Seller, if any, under Section 4.6, if necessary, and then
from  Seller  and/or  Shareholder  for any deficiency, if any.  If the Net Asset
Amount No. 2 is greater than $570,253.00, the Purchase Price No. 2 to be paid to
Seller shall be increased on a dollar-for-dollar basis by Purchaser No. 2 paying
to  Seller  by  certified  or  cashier's  check  or  wire  transfer such excess.

     6.
                              EMPLOYMENT AGREEMENT
                              --------------------

6.1  Employment  Agreement  of  R.  Lund.
     -----------------------------------

     At Closing,  Purchaser No. 1 shall enter into an Employment  Agreement with
     R. Lund. A copy of said Employment  Agreement is attached hereto and made a
     part hereof as Exhibit D.

                                       7.
                       COVENANT NOT TO COMPETE AGREEMENTS
                       ----------------------------------

7.1  Covenant  Not  to  Compete  Agreements  of  Seller  and  Shareholder.
     --------------------------------------------------------------------

     At Closing, Seller and Shareholder shall enter into Covenant Not to Compete
     Agreements  with  Purchaser  No. 1 and  Purchaser  No.  2.  Copies  of said
     Covenant  Not to Compete  Agreements  are  attached  hereto and made a part
     hereof as Exhibits E, E-1, E-2 and E-3.

                                       25
<PAGE>
                                       8.
                               SUBLEASE AGREEMENT
                               ------------------

8.1  Sublease  Agreement.
     -------------------

     Shareholder  is the owner of the real estate located at 5051 Highway 7, St.
     Louis  Park,  Minnesota  55416.  As a  condition  of the  Closing  of  this
     Agreement,  Shareholder  shall have caused  Seller to enter into a Sublease
     Agreement  with  Purchaser in the form  attached  hereto as Exhibit F. Such
     lease shall be a triple net lease for no more than twelve thousand (12,000)
     square feet for a period of three (3) years, at a base rental rate of $9.50
     a square foot.  Said Sublease shall be subject to cancellation by Purchaser
     No. 1 at any time after one (1) year has lapsed  from the  commencement  of
     such Sublease,  subject to a ninety (90) day written notice  requirement by
     Purchaser  No.1  to  Seller.   Shareholder  agrees  not  to  terminate  the
     underlying  lease  between  it and Seller  during the term of the  Sublease
     Agreement,  as long as Purchaser No. 1 is not in default under the terms of
     the Sublease.

                                       9.
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------
                            OF SELLER AND SHAREHOLDER
                            -------------------------

     Except as set forth in the Disclosure Schedule attached hereto,  Seller and
     Shareholder,  jointly and severally, represent and warrant to Purchaser No.
     1 and Purchaser No. 2 that the following statements are true and correct as
     of the date hereof:

9.1  Organization,  Good  Standing,  Qualification  and  Power  of  Seller.
     ---------------------------------------------------------------------

     Seller  is a  corporation  duly  organized,  validly  existing  and in good
     standing  under the laws of the  State of  Delaware  and has the  corporate
     power and authority to own,  lease and operate the  Purchased  Assets No. 1
     and the Purchased  Assets No. 2 and to conduct  Business No. 1 and Business
     No. 2 currently  being  conducted by it. The Seller is duly  qualified  and
     validly  existing  in  Delaware  and in good  standing in each of the other
     jurisdictions  in which it is required by the nature of its business or the
     ownership of its properties to so qualify. Seller has no subsidiaries.  The
     Disclosure  Schedule  correctly  lists,  with  respect to the Seller,  each
     jurisdiction  in  which  it  is  qualified  to  do  business  as a  foreign
     corporation.

                                       26
<PAGE>
9.2  Capitalization.
     --------------

     The authorized capitalization of the Seller consists solely of one thousand
     (1,000)  shares of common  stock,  without  par value,  of which  three (3)
     shares  representing  one hundred  percent  (100%) of the issued  stock are
     currently owned by the Shareholder,  are fully paid and  nonassessable  and
     have not been issued in violation of the  preemptive  rights of any person.
     Except as set forth in  Disclosure  Schedule,  Seller is not  obligated  to
     issue or acquire any of its  securities,  nor has it granted options or any
     similar rights with respect to any of its securities.

9.3  Authority  to  Make  Agreement.
     ------------------------------

     Seller and  Shareholder  have the full legal power and  authority  to enter
     into, execute,  deliver and perform their respective obligations under this
     Agreement  and  each  of  the  other  agreements,   instruments  and  other
     instruments to be delivered  incident  hereto  ("Other Seller  Documents").
     This  Agreement and the Other Seller  Documents  have been duly and validly
     executed  and  delivered by Seller and  Shareholder,  and are the legal and
     binding  obligation of each of them,  enforceable in accordance  with their
     respective  terms,  subject to principles of equity,  bankruptcy  laws, and
     laws affecting creditors' rights generally.  Seller has taken all necessary
     action  (including action of its Board of Directors and its Shareholder) to
     authorize and approve the execution and delivery of this  Agreement and the
     Other Seller Documents,  the performance of its obligations  thereunder and
     the consummation of the transactions contemplated thereby.

9.4  Existing  Agreements,  Governmental  Approvals  and  Permits.
     ------------------------------------------------------------

     (a)  The  execution,  delivery and  performance  of this  Agreement and the
          Other Seller  Documents  by Seller,  the sale,  transfer,  conveyance,
          assignment and delivery of the Purchased Assets No. 1 to Purchaser No.
          1 and of the Purchased Assets No. 2 to Purchaser No. 2 as contemplated
          in this  Agreement,  and the  consummation  of the other  transactions
          contemplated  thereby:  (i) do not  violate  any  provisions  of  law,
          statute, ordinance or regulation applicable to Seller, the Shareholder
          or Purchased  Assets No. 1 and/or Purchased Assets No. 2, (ii) (except
          for Seller's  secured  creditors set forth in Sections 3.1 and/or 3.2,
          whose  consent  shall be  obtained  prior to Closing and except as set
          forth in Disclosure  Schedule),  will not conflict  with, or result in
          the breach or termination of any provision of, or constitute a default
          under (in each case  whether  with or without  the giving of notice or
          the lapse of time or both) the Articles of  Incorporation or Bylaws of
          Seller or any  indenture,  mortgage,  lease,  deed of trust,  or other

                                       27
<PAGE>
          instrument,  contract or agreement or any license,  permit,  approval,
          authority,  or any order,  judgment,  arbitration  award, or decree to
          which Seller or the  Shareholder  is a party or by which Seller or the
          Shareholder   or  any  of  their  assets  and   properties  are  bound
          (including,  without  limitation,  the  Purchased  Assets  No.1 and/or
          Purchased  Assets No. 2), and (iii) will not result in the creation of
          any encumbrance upon any of the properties,  assets, or Business No. 1
          or Business No. 2 of Seller or of  Shareholder.  Neither  Seller,  nor
          Shareholder, nor any of their assets or properties (including, without
          limitation,  the Purchased Assets No. 1 and/or Purchased Assets No. 2)
          is  subject  to  any  provision  of  any  mortgage,  lease,  contract,
          agreement,  instrument,  license, permit, approval,  authority, order,
          judgment, arbitration award or decree, or to any law, rule, ordinance,
          or  regulation,  or any other  restriction  of any kind or  character,
          which would prevent Seller or the Shareholder  from entering into this
          Agreement  or any of the Other Seller  Documents or from  consummating
          the transactions contemplated thereby.

     (b)  Neither  Seller nor  Shareholder is a party to, subject to or bound by
          any agreement,  judgment,  award, order, writ, injunction or decree of
          any court, governmental body or arbitrator which would prevent the use
          by Purchaser No. 1 of Purchased  Assets No. 1 or by Purchaser No. 2 of
          Purchased Assets No. 2 in accordance with present  practices of Seller
          after the Closing  Date or which,  by operation of law, or pursuant to
          its  terms,  would be  breached,  terminate,  lapse or be  subject  to
          termination  or default  under (in each case  whether  with or without
          notice,  the  passage  of time or both) upon the  consummation  of the
          transactions contemplated in this Agreement.

     (c)  No approval,  authority  or consent of, or filing by Seller  with,  or
          notification to, any foreign, federal, state or local court, authority
          or  governmental  or  regulatory  body  or  agency  or any  person  is
          necessary to authorize the execution and delivery of this Agreement or
          the Other  Seller  Documents by Seller or the  Shareholder,  the sale,
          transfer, conveyance,  assignment and delivery of the Purchased Assets
          No. 1 to Purchaser No. 1 or of Purchased Assets No. 2 to Purchaser No.
          2, or the consummation of the other transactions contemplated thereby,
          or to continue  the use and  operation  of  Purchased  Assets No. 1 by
          Purchaser No. 1 or Purchased Assets No. 2 by Purchaser No. 2 after the
          Closing Date.

                                       28
<PAGE>
9.5  Financial  Statements.
     ---------------------

     (a)  Copies of the  Financial  Statements  are  attached to the  Disclosure
          Schedule.  Each of the Financial  Statements  are true and complete in
          all material  respects and were prepared in accordance  with generally
          accepted accounting principles (except that the May 31, 2000 Pro Forma
          Balance Sheet No. 1 and the May 31, 2000 Pro Forma Balance Sheet No. 2
          do not contain any footnotes and are subject to normal  year-end audit
          adjustments as shall be reflected on the Pro Forma Balance Sheet No. 1
          and Pro Forma  Balance Sheet No. 2 of Seller which will be prepared as
          set forth in Section 5.1) applied on a consistent basis throughout the
          periods  indicated  and fairly  present in all  material  respects the
          financial  position and  condition of the Seller as of the  respective
          dates  thereof  and  the  results  of its  operation  and  changes  in
          financial position for the respective periods then ended.

     (b)  Except to the extent reflected,  reserved against, or disclosed on Pro
          Forma Balance Sheet No. 1 and/or Pro Forma Balance Sheet No. 2, or the
          Financial Statements,  or the Disclosure Schedule,  the Seller had, as
          of such date, no material  liabilities  or  obligations of any nature,
          whether accrued, absolute, contingent, or otherwise, including without
          limitation,  unfunded pension or other retirement plan liabilities and
          tax  liabilities  whether or not incurred in respect of or measured by
          the  Seller's  income,  for  any  period  prior  to the  date  of said
          Financial  Statements,  or arising out of transactions entered into or
          any  set of  facts  existing  prior  thereto.  Except  to  the  extent
          disclosed on the  Disclosure  Schedule,  there exists no basis for the
          assertion against Seller,  as of the date of the Financial  Statements
          or of Pro Forma Balance Sheet No. 1 and/or Pro Forma Balance Sheet No.
          2, of any material  liability of any nature or in any amount not fully
          reflected,  reserved against, or disclosed in the Financial Statements
          or in Pro Forma Balance Sheet No. 1 and/or Pro Forma Balance Sheet No.
          2.

9.6  Customers.
     ---------

     The Disclosure  Schedule  includes a correct list of the  twenty-five  (25)
     largest  customers  of the Seller by sales in dollars  for each of 1999 and
     January  through May of 2000 and the amount of business  done by the Seller
     with each such  customer for such periods.  Assuming  that  Purchaser No. 1
     continues to conduct  Business No. 1 and that  Purchaser No. 2 continues to
     conduct  Business No. 2 in the ordinary  course  consistent  with  Seller's
     prior practices generally and specifically with respect to Seller's current
     customers,  Seller has no  knowledge  that any of the current  customers of
     Seller will or intend to (a) cease doing  business with the Seller;  or (b)
     materially  alter the amount of business they are presently  doing with the
     Seller;  or (c) not do business with the  Purchaser No. 1 and/or  Purchaser
     No. 2, as applicable, after the Closing.

                                       29
<PAGE>
9.7     Intangible  Property.
        --------------------

     The Disclosure  Schedule includes an accurate list and summary  description
     of all patents, franchises,  distributorships,  registered and unregistered
     trademarks,  trade  names and  service  marks,  licenses,  brand  names and
     company  lists and all  applications  for the  foregoing,  presently  owned
     and/or held (as a licensee or otherwise) by the Seller. The Seller is not a
     licensor in respect to any patents, trade secrets, inventions, shop rights,
     know-how,  trademarks,  trade names, copyrights,  or applications therefor.
     The Disclosure  Schedule  contains an accurate and complete  description of
     such intangible property and the items of all licenses and other agreements
     relating  thereto.  All  of the  above-mentioned  intangibles  used  in the
     Seller's  Business  No.  1  and/or  Seller's  Business  No.  2 are the sole
     property  of the Seller and do not require the consent of or consent to any
     other  person as a condition to their use or the  transaction  provided for
     herein and do not infringe upon the rights of others.

9.8  Significant  Agreements.
     -----------------------

     The  Disclosure  Schedule  contains an accurate  and  complete  list of all
     contracts, agreements, licenses, instruments and understandings (whether or
     not in  writing)  to which  the  Seller is a party or is bound and that are
     material  to  Business  No. 1 and/or  Business  No.  2,  assets,  financial
     condition  or results of  operations  of the Seller.  Without  limiting the
     generality  of the  foregoing,  such  list  includes  all  such  contracts,
     agreements, licenses and instruments:

     (a)  Providing for payments of more than Five Thousand Dollars  ($5,000.00)
          per year,  other than purchase  orders incurred in the ordinary course
          of business;

     (b)  Providing  for the  extension  of credit  other than  consistent  with
          normal credit terms described in the Disclosure Schedule;

     (c)  Limiting  the ability of the Seller to conduct its  Business  No. 1 or
          its  Business No. 2 or any other  business or to otherwise  compete in
          its or any other business, including as to manner or place;

     (d)  Providing  for a guarantee or indemnity by the Seller,  including  but
          not limited to any  indemnification  provided under any asset purchase
          agreement,  stock purchase agreement, or other transaction that Seller
          is a party to;

                                       30
<PAGE>
     (e)  With any Affiliate of Seller;

     (f)  With any labor union or employees' association connected with Seller's
          Business No. 1 and/or Seller's Business No. 2;

     (g)  For the  employment or retention of any director,  officer,  employee,
          agent,  shareholder,  consultant,  broker or  advisor of Seller or any
          other  contract  between Seller and any director,  officer,  employee,
          agent,  shareholder,  consultant or advisor which does not provide for
          termination  at will  by the  Seller  without  further  cost or  other
          liability to the Seller as of or at any time after the Closing.

     (h)  In the nature of a profit sharing, bonus stock option, stock purchase,
          pension,     deferred     compensation,     retirement,     severance,
          hospitalization, insurance or other plan or contract providing benefit
          to  any  person  or  former  director,   officer,   employee,   agent,
          shareholder, consultant, broker or advisor of Seller, or such person's
          dependents, beneficiaries or heirs;

     (i)  In the nature of an  indenture,  mortgage,  promissory  note,  loan or
          credit agreement or other contract  relating to the borrowing of money
          or a line of  credit  by the  Seller  or  relating  to the  direct  or
          indirect  guarantee  or  assumption  by the Seller of  obligations  of
          others;

     (j)  Leases or subleases  with respect to any property,  real,  personal or
          mixed, in which the Seller is involved, as lessor or lessee; and

     (k)  Distributorship  Agreement(s) or License  Agreement(s) with respect to
          any property which Seller has entered into as licensor.

     True and  correct  copies  of all  items  so  disclosed  in the  Disclosure
     Schedule (if written) have been provided or made available to Purchaser No.
     1 and/or  Purchaser  No. 2. Each of such items  listed,  or  required to be
     listed,  is  a  valid  and  binding   obligation  of  the  parties  thereto
     enforceable in accordance with its terms,  subject to principles of equity,
     bankruptcy laws, and laws affecting creditors' rights generally,  and there
     have been no material  defaults or claims of material default by the Seller
     and  there  are no facts  or  conditions  that  have  occurred  or that are
     anticipated  to occur  which,  through the passage of time or the giving of
     notice,  or both, would constitute a default by the Seller,  or would cause
     the  acceleration of any obligation of any party thereto or the creation of
     an  Encumbrance  upon any asset of the Seller.  There are no material  oral
     contracts,  agreements or understandings made by any Shareholder,  material
     to Purchased  Assets No. 1 or  Purchased  Assets No. 2, except such as have
     been disclosed in the Disclosure Schedule and for which an accurate summary
     description has been provided.

                                       31
<PAGE>
9.9  Inventory.
     ---------

     Except as specifically  described on the Disclosure Schedule, all inventory
     is  reflected  on the May 31,  2000 Pro  Forma  Balance  Sheet,  and at the
     Closing Date will consist of items of quality and quantity which are usable
     or saleable in the ordinary  course of business of Seller in the conduct of
     its Business  No. 1 and/or its Business No. 2, and items of below  standard
     quality and items not usable or saleable in the ordinary course of Seller's
     business have been written down in value in  accordance  with good business
     practices to estimated  net  realizable  market value or adequate  reserves
     have been provided therefor.  The values at which the inventory are carried
     on the  list  attached  to  the  Disclosure  Schedule  reflect  the  normal
     valuation policy of Seller in setting inventory at the lower of cost or net
     realizable  market  values,  all  in  accordance  with  generally  accepted
     accounting  principles.  Except  as set forth on the  Disclosure  Schedule,
     since May 31, 2000,  the inventory of Seller has been  maintained at normal
     and  adequate  levels for the  continuation  of the  Business  No. 1 and/or
     Business  No. 2 in its  normal  course.  No  change  has  occurred  in such
     inventory which affects or will affect the usability or salability thereof,
     no  write-downs  or write-offs of the value of such  inventory has occurred
     and  no  additional  amounts  have  been  reserved  with  respect  to  such
     inventories  except in each case  those  adjustments  made in the  ordinary
     course of  business.  The  Disclosure  Schedule  lists the  location of all
     inventory  together with a brief description of the type and amount at each
     location.

9.10 Accounts  Receivable  and  Vendor  Receivables.
     ----------------------------------------------

     All accounts  receivable and vendor receivables of Seller which have arisen
     in connection  with  Business No. 1 and/or  Business No. 2 or otherwise and
     which are reflected on the Financial  Statements and all receivables  which
     have arisen since May 31, 2000  through the Closing  shall have arisen only
     from bonafide transactions in the ordinary course of business and represent
     valid,  collectible and existing claims, net of any reserve as reflected on
     the Pro Forma Balance Sheet No. 1 and/or the Pro Forma Balance Sheet No. 2.
     Subject  to  customer  credit,  the  payment  of each  account  and  vendor
     receivable will not be subject to any known defense, counterclaim condition
     (other  than  Seller's  performance  in the  ordinary  course of  business)
     whatsoever.  The Disclosure  Schedule  hereto  accurately  lists, as of the
     Closing Date, all receivables  arising out of or relating to Business No. 1
     and/or  Business  No.  2, the  amount  owing  and  aging  of such  accounts
     receivable,  the name of the party  from whom such  account  receivable  is
     owing,  any  security in favor of Seller for the  repayment of such account
     receivable  which  Seller  purports to have.  Seller has made  available to
     Purchaser  No. 1 and  Purchaser  No. 2 complete  and correct  copies of all
     instruments,  documents and agreements  evidencing such accounts receivable
     and of all instruments,  documents or agreements (if any) creating security
     therefor.

                                       32
<PAGE>
9.11 Taxes.
     -----

     Except  as to Taxes  not yet due and  payable,  and  except  for  Taxes the
     payment of which is being diligently  contested in good faith and by proper
     proceedings  and for  which  adequate  reserves  have been  established  in
     accordance with generally accepted accounting principles, and except as set
     forth in the Disclosure Schedule,  Seller has filed all returns and reports
     that are now  required to be filed by it in  connection  with any  federal,
     state or local tax, duty or charge levied,  assessed or imposed upon it, or
     its property,  including  unemployment,  social security and similar taxes;
     and all of such taxes have been either  paid or adequate  reserves or other
     provision has been made therefor. Seller and Shareholder shall pay, without
     right of reimbursement  from Purchaser No. 1 and/or Purchaser No. 2, all of
     Seller and  Shareholder's  income  Taxes  including  but not limited to any
     Taxes  attributable  to any gain under Section 1374 of the Code,  including
     any interest and penalties thereon, that relate to the activities of Seller
     through the Closing including this transaction, as due.

                                       33
<PAGE>
9.12 Title  to  Purchased  Assets;  Encumbrances.
     -------------------------------------------

     (a)  With  respect to  Purchased  Assets No. 1 and  Purchased  Assets No. 2
          sold, at the Closing Seller shall have good title to Purchased  Assets
          No. 1 and/or  Purchased Assets No. 2 being acquired by Purchaser No. 1
          and/or Purchaser No. 2, respectively, and except for matters expressly
          set forth in Section  3.1,  Section 3.2  Section  3.3 or Section  3.4,
          which  Encumbrances,  if any,  upon  Purchased  Assets  No.  1  and/or
          Purchased Assets No. 2 shall be removed at Closing,  free and clear of
          all  Encumbrances  whatsoever;   immediately  after  the  transfer  of
          Purchased  Assets No. 1 being  acquired by Purchaser No. 1 from Seller
          and  Purchased  Assets No. 2 being  acquired by  Purchaser  No. 2 from
          Seller,  Purchaser No. 1 will own all of said  Purchased  Assets No. 1
          and Purchaser No. 2 will own all of said Purchased  Assets No. 2, free
          and  clear  of  all  Encumbrances  whatsoever,  whether  perfected  or
          unperfected; and, by way of illustration but not limitation, there are
          not any unpaid taxes,  assessments or charges due or payable by Seller
          to  any  federal,  state  or  local  agency,  or  any  obligations  or
          liabilities or any unsatisfied  judgments against,  or, to the best of
          Seller's   knowledge,   any  litigation  or  proceedings   pending  or
          threatened against Seller by Seller's employees,  clients,  customers,
          creditors,  suppliers,  or any other party (nor state of facts for any
          such  obligation,  liability,  litigation or  proceeding),  that could
          become a claim,  obligation,  liability,  lien or other  charge  of or
          against Purchaser No. 1, Purchaser No. 2, or Purchased Assets No. 1 or
          Purchased  Assets No. 2. To the best of  knowledge  of Seller,  all of
          Seller's  tangible and other  operating  assets used in Business No. 1
          and/or  Business No. 2 which are being sold hereunder to Purchaser No.
          1 and/or Purchaser No. 2, respectively, are, in all material respects,
          in good  operating  condition  and  repair,  free  of all  structural,
          material or mechanical  defects and conform with all  applicable  laws
          and regulations.

     (b)  Except as otherwise  specifically  set forth  herein,  Seller is not a
          party to any  contract,  agreement,  lease or  commitment  that  would
          result  in any  claim,  obligation,  liability,  lien or other  charge
          against Purchaser No. 1 and/or Purchaser No. 2 or Purchased Assets No.
          1 or Purchased  Assets No. 2, and  Purchaser No. 1 and Purchaser No. 2
          are not  obligated  to assume  the  obligations  under  any  contract,
          agreement,  lease or commitment of Seller,  except as specifically set
          forth herein.

9.13 Pending  Actions.
     ----------------

     Seller has not been served with or received  notice of any actions,  suits,
     arbitrations,  OSHA,  EPA or other  governmental  violations,  or any other
     proceedings or investigations,  either administrative or judicial, strikes,
     lockouts or NLRB charges or  complaints  ("Actions and  Disputes").  To the
     best of Seller's  knowledge,  there are no Actions or  Disputes  pending or
     threatened against or affecting  (directly or indirectly) the Seller or its

                                       34
<PAGE>
     property or assets, nor are there any facts or conditions which exist which
     would  give rise to any such  Actions  or  Disputes  which,  if  determined
     adversely to Seller,  would have a material  adverse  effect upon  Seller's
     Business No. 1 and/or Seller's Business No. 2.

9.14  Insurance.
      ---------

     The Disclosure  Schedule contains an accurate and complete listing (showing
     type of insurance,  amount,  insurance company,  annual premium and special
     exclusions) of all policies of fire,  liability,  worker's compensation and
     other forms of insurance owned or held by the Seller. All such policies are
     in  full  force  and  effect;   are  sufficient  for  compliance  with  all
     requirements  of law and of all  agreements to which the Seller is a party;
     are valid, outstanding and enforceable policies; provide adequate insurance
     coverage  for the assets and  operations  of the Seller and will  remain in
     full  force and  effect  through  the  Closing.  There  are no  outstanding
     requirements  or  recommendations  by any  insurance  company that issued a
     policy with  respect to any of the  properties  and assets of the Seller by
     any Board of Fire  Underwriters or other body exercising  similar functions
     or by any  Governmental  Entity  requiring or  recommending  any repairs or
     other  work  to be done on or with  respect  to any of the  properties  and
     assets  of the  Seller  or  requiring  or  recommending  any  equipment  or
     facilities to be installed on or in connection  with any of the  properties
     or assets of the Seller.

9.15  Status  of  Business.
      --------------------

     (a)  Since  October 31,  1999,  Business  No. 1 and  Business  No. 2 of the
          Seller have been operated only in the ordinary course,  and, except as
          set forth in the  Disclosure  Schedule or permitted  under Section 2.4
          dealing  with  Excluded  Assets,  there has not been with  respect  to
          Business No. 1 and/or Business No. 2:

          (i)  Any  material  change  in its  condition  (financial  or  other),
               assets,  liabilities,  obligations,  business or earnings, except
               changes in the ordinary course of business,  none of which in the
               aggregate has been materially adverse;

          (ii) Any material liability or obligation  incurred or assumed, or any
               material contract,  agreement,  arrangement,  lease (as lessor or
               lessee),  or other commitment entered into or assumed,  on behalf
               of Business No. 1 and/or Business No. 2, whether written or oral,
               except in the ordinary course of business;

                                       35
<PAGE>
          (iii)Any purchase or sale of material  assets in  anticipation of this
               Agreement,  or any purchase,  lease,  sale,  abandonment or other
               disposition of material assets,  except in the ordinary course of
               business;

          (iv) Any waiver or release of any material  rights,  except for rights
               of nominal value;

          (v)  Any  cancellation  or  compromise  of any material  debts owed to
               Seller or material  claims known by Seller against another person
               or entity, except in the ordinary course of business;

          (vi) Any damage or  destruction  to or loss of any physical  assets or
               property of Seller which  materially  adversely  affects Business
               No.  1 and/or  Business  No.  2 or any of the  properties  of the
               Seller (whether or not covered by insurance);

          (vii)Any material  changes in the accounting  practices,  depreciation
               or  amortization  policy  or  rates  theretofore  adopted  by the
               Seller, or any material  revaluation or write-up or write-down of
               any of its assets;

          (viii)  Any  direct  or   indirect   redemption,   purchase  or  other
               acquisition  for  value  by  the  Seller  of its  shares,  or any
               agreement to do so;

          (ix) Any material increase in the compensation levels or in the method
               of determining the compensation of any of the Seller's  officers,
               directors,  agents or employees,  or any bonus payment or similar
               arrangement  with or for the  benefit  of any  such  person,  any
               increase in benefits expense to the Seller,  any payments made or
               declared into any  profit-sharing,  pension,  or other retirement
               plan for the benefit of  employees  of the Seller,  except in the
               ordinary course of business;

          (x)  Any loans or advances between the Seller and Shareholder,  or any
               family  member or any  associate or Affiliate of the Seller or of
               the Shareholder;

          (xi) Any material  contract  canceled or the terms thereof  amended or
               any notice received with respect to any such contract terminating
               or threatening termination or amendment of any such contract;

                                       36
<PAGE>
          (xii)Any  transfer or grant of any  material  rights under any leases,
               licenses,  agreements,  or with  respect to any trade  secrets or
               know-how;

          (xiii) Any labor trouble or employee controversy  materially adversely
               affecting Business No. 1 and/or Business No. 2 or assets; or

          (xiv)Any dividend or other  distribution on or in respect of shares of
               its capital stock,  except for any distributions made pursuant to
               the provisions of Section 2.4 relating to Excluded Assets.

     (b)  Seller is not

          (i)  in  violation of any  outstanding  judgment,  order,  injunction,
               award or decree  specifically  relating to Business  No. 1 and/or
               Business No. 2, or

          (ii) in  violation of any  federal,  state or local law,  ordinance or
               regulation  which is applicable to Business No. 1 and/or Business
               No. 2, except  where such  violation  does not have a  materially
               adverse effect on Business No. 1 and/or Business No. 2.

          Seller has all permits, licenses,  orders, approvals,  authorizations,
          concessions and franchises of any federal, state or local governmental
          or regulatory body that are material to or necessary in the conduct of
          Business No. 1 and/or  Business  No. 2, except  where  failure to have
          such permit,  license, order, approval,  authorization,  concession or
          franchise does not have a materially  adverse effect on Business No. 1
          and/or Business No. 2. All such permits,  licenses, orders, approvals,
          concessions  and franchises  are set forth on the Disclosure  Schedule
          and are in full force and effect and there is no proceeding, or to the
          knowledge of Seller, threatened to revoke or limit any of them.

     (c)  No claim, litigation,  action,  investigation or proceeding is pending
          or, to the knowledge of Seller,  threatened,  and no order, injunction
          or decree is outstanding, against or relating to Business No. 1 and/or
          Business  No.  2 or its  assets,  and  Seller  does  not  know  of any
          information  which could result in such a claim,  litigation,  action,
          investigation or proceeding, which, if determined adversely to Seller,
          would have a material  adverse  effect upon  Seller's  Business  No. 1
          and/or Business No. 2.

                                       37
<PAGE>
     (d)  At the  Closing,  Seller  shall have  accrued or paid in full,  to all
          employees  of  Business  No.  1 and/or  Business  No.  2,  all  wages,
          salaries,   commissions,   bonuses,   vacations   and   other   direct
          compensation  for all  services  performed  by  them.  To the  best of
          Seller's  Knowledge,  Seller is in compliance with all federal,  state
          and local laws,  ordinances and regulations relating to employment and
          employment  practices at Business No. 1 and/or Business No. 2, and all
          employee benefit plans and tax laws relating to employment at Business
          No.  1 and/or  Business  No.  2.  There is no  unfair  labor  practice
          complaint  against Seller  relating to Business No. 1 and/or  Business
          No. 2 pending  before the National  Labor  Relations  Board or similar
          agency or body and, to the best of Seller's  Knowledge,  no  condition
          exists that could give rise to any unfair  labor  practice  complaint.
          There is no labor  strike,  dispute,  slowdown  or  stoppage  actually
          pending  or,  to  the  Knowledge  of  Seller,  threatened  against  or
          involving  Business  No. 1 and/or  Business No. 2. Seller has no labor
          contracts or collective  bargaining  agreements with respect to any of
          its employees.

9.16 Environmental  Laws.
     -------------------

     (a)  To the best of Seller's  Knowledge,  the real  estate  located at 5051
          Highway 7, St. Louis Park, Minnesota 55416, which is leased by Seller,
          ("Real Estate") has not been used or operated in any fashion involving
          producing,  handling and  disposing of  chemicals,  toxic  substances,
          wastes and effluent materials, x-rays or other materials or devices in
          material  violation of any laws, rules,  regulations or orders, and to
          the  best of  Seller's  Knowledge,  the  Real  Estate  is in  material
          compliance with applicable laws, regulations,  ordinances, decrees and
          orders arising under or relating to health,  safety, and environmental
          laws  and  regulations,   including  without  limitation  the  Federal
          Occupation  and Safety  Health  Act, 29 U.S.C.  651, et seq.;  Federal
          Resource  Conservation and Recovery Act ("RCRA"),  42 U.S.C.  6901, et
          seq.; Federal Comprehensive  Environmental Response,  Compensation and
          Liability Act ("CERCLA"),  42 U.S.C.  9601, et seq.; the Federal Clean
          Air Act, 42 U.S.C.  2401,  et seq.;  the  Federal  Clean Water Act, 33
          U.S.C.  1251,  et seq.;  and all state and local laws that  correspond
          therewith or supplement such laws.

     (b)  To the  best of  Seller's  Knowledge,  the  Real  Estate  has not been
          operated,  in violation of any laws, rules,  regulations or orders, so
          as to involve or create any surface impoundments,  incinerators,  land
          fills,  waste  storage  tanks,  waste  piles,  or deep well  injection
          systems or for the  purpose of  storage,  treatment  or  disposal of a
          hazardous waste as defined by RCRA or hazardous  substance,  pollutant
          or  contaminate  as defined  by CERCLA  and,  to the best of  Seller's
          Knowledge, no acts have been committed that would make the Real Estate
          or any part thereof subject to remedial action under RCRA or CERCLA or
          corresponding state or local laws.

                                       38
<PAGE>
     (c)  To the best of Seller's  Knowledge,  there have not been,  are not now
          and as of the Closing  Date,  there will be no solid waste,  hazardous
          waste,   hazardous  substance,   toxic  substance,   toxic  chemicals,
          pollutants or  contaminants,  underground  storage  tanks,  purposeful
          dumps, or accidental  spills in, on or about the Real Estate or any of
          the assets of the Seller,  whether real or personal,  owned or leased,
          or stored on any real property owned or leased by the Seller or by the
          Seller's lessees, licensees, invites, or predecessors.

     (d)  Seller is not engaged in, and to the best of  Seller's  Knowledge  and
          belief,  is not threatened  with any  litigation,  or  governmental or
          other  proceeding  which may give rise to any claim  against  the Real
          Estate.  Specifically,  there are no pending suits, charges,  actions,
          governmental investigations, or other proceedings, involving, directly
          or indirectly without  limitation,  the laws, statutes and regulations
          set forth in subsection (a), above, whether initiated by a third party
          or by Seller and there are none,  to the best of  Seller's  Knowledge,
          threatened  against or relating to or involving the Real Estate or the
          transactions contemplated by this Agreement.  Seller is not in default
          with respect to any order, writ,  injunction or decree of any federal,
          state, local or foreign court, department, agency or instrumentality.

     (e)  The Disclosure Schedule will list all waste disposal sites, dump sites
          and  other  areas  either  on the  Real  Estate  or  offsite  at which
          hazardous or toxic waste generated by the Seller has been disposed (in
          each case  identifying such waste) and it will  specifically  identify
          each such site or area which is or has been  included in any published
          federal,  state or local (domestic or foreign) superfund or other list
          of  hazardous  or  toxic  waste  sites  or  areas.  (f) To the best of
          Seller's Knowledge,  Seller has obtained all permits, and licenses and
          other  authorizations  required by all environmental  laws; and all of
          such permits,  licenses and other authorizations are in full force and
          effect  as of the date  hereof.  A true and  correct  list of all such
          permits,  licenses  and  other  authorizations  is  set  forth  in the
          Disclosure Schedule.

9.17 Certain  Employees
     ------------------

     (a)  Each of the following is included in the list of agreements  set forth
          in the  Disclosure  Schedule:  all collective  bargaining  agreements,
          employment   and   consulting   agreements,   bonus  plans,   deferred
          compensation  plans,  employee  pension  plans  or  retirement  plans,
          employee  profit-sharing  plans,  employee  stock  purchase  and stock
          option  plans,   hospitalization   insurance,   and  other  plans  and
          arrangements  providing  for  employee  benefits of  employees  of the
          Seller.

                                       39
<PAGE>
     (b)  The Disclosures  Schedule contains a true,  complete and accurate list
          of the  following:  the  names,  positions,  and  compensation  of the
          present  employees  of the Seller,  together  with a statement  of the
          annual  salary  payable  to  salaried  employees  and a summary of the
          bonuses and description of agreements for additional  compensation and
          other like  benefits,  if any, paid or payable to such persons for the
          period set forth in the Disclosure  Schedule.  Except as listed in the
          Disclosure Schedule, to the best of Seller's Knowledge,  all employees
          of Seller are employees--at--will.

     (c)  Seller has no retired  employees  who are receiving or are entitled to
          receive any payments, health or other benefits from Seller.

9.18 Payments  to  Employees.
     -----------------------

     All  accrued  obligations  of Seller  relating to  employees  and agents of
     Seller,  whether  arising by  operation  of law,  by  contract,  or by past
     service,  for  payments  to  trusts or other  funds or to any  governmental
     agency, or to any individual employee or agent (or his heirs,  legatees, or
     legal representatives) with respect to unemployment  compensation benefits,
     profit sharing or retirement  benefits,  or social  security  benefits have
     been paid or accrued by Seller. All obligations of Seller as an employer or
     principal relating to employees or agents,  whether arising by operation of
     law, by  contract,  or by past  practice,  for  vacation  and holiday  pay,
     bonuses, and other forms of compensation which are or may become payable to
     such  employees  or  agents,  have been paid or will be paid or  accrued by
     Seller.

9.19 Change  of  Corporate  Name.
     ---------------------------

     At the  Closing,  Seller,  if requested  by either  Purchaser  No. 1 and/or
     Purchaser  No.  2,  will  adopt  and file  with the  Secretary  of State of
     Minnesota an Amendment to the Charter of Seller changing the name of Seller
     to a name substantially  dissimilar to DATASOURCE SYSTEMS CORPORATION,  dba
     DATASOURCE HAGEN and DATASOURCE  SYSTEMS  MARKETING  CORPORATION and Seller
     shall also execute a Consent for Use of Similar Name form,  as set forth in
     the Disclosure Schedule, granting to Purchaser No. 1 and/or Purchaser No. 2
     (as may be agreed by such parties) the use of the name  DATASOURCE  SYSTEMS
     CORPORATION,  dba  DATASOURCE  HAGEN and/or  DATASOURCE  SYSTEMS  MARKETING
     CORPORATION.

                                       40
<PAGE>
9.20 Brokers  and  Finders.
     ---------------------

     Except as set forth in the Disclosure Schedule,  no broker, finder or other
     person or entity acting in a similar capacity has participated on behalf of
     Seller in bringing about the transaction herein  contemplated,  or rendered
     any service with respect thereto or been in any way involved therewith.

9.21 Preservation  of  Organization.
     ------------------------------

     Except as set forth on the Disclosure Schedule, since October 31, 1999, the
     Seller  has  kept  intact   Business  No.  1  and/or  Business  No.  2  and
     organization  of the Seller;  retained  the  services  of all the  Seller's
     material employees and agents,  retained the Seller's arrangements with the
     manufacturers  of the products  distributed by Seller in the same manner as
     conducted  prior to such date, and engaged in no transaction  other than in
     the ordinary course of Seller's Business No. 1 and/or Business No. 2.

9.22 Absence  of  Certain  Business  Practices.
     -----------------------------------------

     Neither Seller, nor, to Seller's Knowledge, any officer,  employee or agent
     of the Seller, nor any other Person acting on its behalf,  has, directly or
     indirectly,  within the past five  years  given or agreed to give any gift,
     bribe,  rebate or kickback or otherwise  provide any similar benefit to any
     customer, supplier, governmental employee or any other Person who is or may
     be in a position to or hinder Seller or Business No. 1 and/or  Business No.
     2 (or assist Seller in connection  with any actual or proposed  transaction
     relating  to Business  No. 1 and/or  Business  No. 2 or any other  business
     previously  operated by Seller) (i) which subjected or might have subjected
     Seller to any  damage or penalty in any  civil,  criminal  or  governmental
     litigation or proceeding,  (ii) which if not given in the past,  might have
     had a material  adverse  effect on Business  No. 1 and/or  Business  No. 2,
     (iii) which if not continued in the future,  might have a material  adverse
     effect on Business No. 1 and/or Business No. 2 or subject Seller to suit or
     penalty in any private or governmental  litigation or proceeding,  (iv) for
     any of the purposes  described in Section 162(c) of the Code or (v) for the
     purpose of establishing or maintaining any concealed fund or concealed bank
     account.

                                       41
<PAGE>
9.23 Suppliers.
     ---------

     The  Disclosure  Statement  sets  forth  the  names of and  description  of
     contractual  arrangements  (whether or not binding or in writing)  with the
     ten (10)  largest  suppliers of the Seller by sales or services in dollars.
     Assuming  that  Purchaser  No.1  and/or  Purchaser  No.  2, as  applicable,
     continues to conduct  Business No. 1 and/or  Business No. 2 in the ordinary
     course consistent with Seller's prior practices  generally and specifically
     with respect to Seller's current suppliers,  Seller has no direct knowledge
     that any of the current  suppliers  of the Seller  will,  or intend to, (a)
     cease doing business with the Seller; or (b) materially alter the amount of
     business they are currently  doing with the Seller;  or (c) not do business
     with Purchaser No. 1 and/or Purchaser No. 2 after the Closing.

9.24 Product  Liability  Claims.
     --------------------------

     To the best of Seller's Knowledge,  there are no material product liability
     claims  against the Seller,  either  potential or  existing,  which are not
     fully covered by product  liability  insurance  coverage with a responsible
     company  which,  if determined  adversely to Seller,  would have a material
     adverse  effect upon  Seller's  Business No. 1 and/or  Business No. 2.

9.25 Employee Benefit Plans.
     -----------------------

     For the purposes of this Section 9.25,  "Seller"  shall include all persons
     who are  members of a  controlled  group,  a group of trades or  businesses
     under common control,  or an affiliated  service group (within the meanings
     of  Sections  414(b),  (c) or (m) of the  Code),  of which the  Seller is a
     member.

     (a)  The Employee  Benefit Plans  presently  maintained by the Seller or to
          which  the  Seller  has  contributed  within  the past six (6)  years,
          including   any   terminated  or  frozen  plans  which  have  not  yet
          distributed  all plan  assets,  are fully set forth in the  Disclosure
          Schedule.  For purposes of this provision,  the term "Employee Benefit
          Plan" shall mean:

          (i)  A Welfare Benefit Plan as defined in Section 3(1) of the Employee
               Retirement  Income  Security  Act of 1974,  as amended  ("ERISA")
               established for the purpose of providing for its  participants or
               their  beneficiaries,   through  the  purchase  of  insurance  or
               otherwise,  medical,  surgical,  or hospital care or benefits, or
               benefits in the event of sickness, accident, disability, death or
               unemployment (including any plan or program of severance pay), or
               vacation benefits,  apprenticeship or other training programs, or
               day care centers,  scholarship  funds, or prepaid legal services,
               or  any  benefit   described  in  Section  302(c)  of  the  Labor
               Management Relations Act of 1947;

                                       42
<PAGE>
          (ii) An Employee  Pension  Benefit  Plan as defined in Section 3(2) of
               ERISA  established or maintained by the Seller for the purpose of
               providing  retirement  income to  employees or for the purpose of
               providing  deferral of income by employees for periods  extending
               to the termination of covered employment or beyond; and

          (iii)Any other  plan or  arrangement  not  covered  by ERISA but which
               provides benefits to employees or former employees and results in
               an accrued liability on the part of the Seller either by contract
               or by operation of law.

     (b)  With respect to any such Employee Benefit Plans, the Seller represents
          and warrants that, to the best of Seller's Knowledge;

          (i)  The Seller has not, with respect to any Employee  Benefit  Plans,
               engaged in any prohibited transaction, as such term is defined in
               Section 4975 of the Code or Section 406 of ERISA.

          (ii) The Seller  has,  with  respect to any  Employee  Benefit  Plans,
               substantially   complied  with  all   reporting  and   disclosure
               requirements required by Title I, Subtitle B, Part 1 of ERISA.

          (iii)There  was no  accumulated  funding  deficiency  (as  defined  in
               section 302 of ERISA and Section 412 of the Code) with respect to
               any  Employee  Pension  Benefit  Plan which is a defined  benefit
               pension  plan,  whether or not waived,  as of the last day of the
               most recent  fiscal year of the plans ending prior to the date of
               this Agreement.

          (iv) Except as  described  on the  Disclosure  Schedule,  there are no
               contributions  due to any Employee  Pension  Benefit Plan for the
               most recent  fiscal year of the plans ending prior to the date of
               this Agreement and the Seller's Financial  Statements reflect any
               liability  of the Seller to make  contributions  to the  Employee
               Pension   Benefit   Plans,   and  a  pro  rata   portion  of  the
               contributions  (including  matching  contributions)  for the plan
               year on which the closing  date occurs shall have been made on or
               prior to the  Closing  Date for the period  ending on the Closing
               Date.

          (v)  No material liability to the Pension Benefit Guaranty Corporation
               ("PBGC") has been asserted  with respect to any Employee  Pension
               Benefit Plan which is a defined benefit pension plan.

          (vi) There  has been no  reportable  event  as  described  in  Section
               4043(b) of ERISA  since the  effective  date of  Section  4043 of
               ERISA with respect to any Employee  Pension Benefit Plan which is
               a defined benefit plan.

                                       43
<PAGE>
          (vii)Except for claims for benefits by participants and  beneficiaries
               in  the  normal  course  of  events,  to  the  best  of  Seller's
               knowledge,  there are no claims,  pending or  threatened,  by any
               individual or Governmental  Entity,  which, if decided adversely,
               would have a material adverse effect upon the financial condition
               of any  Employee  Benefit  Plan,  the plan  administrator  of any
               Employee Benefit Plan, or the Seller.

          (viii)The Seller has made available for  inspection all annual reports
               for the Seller  filed on Internal  Revenue  Service  ("IRS") Form
               5500 or 5500C,  all reports for the Seller prepared by an actuary
               for the last three plan years,  the plan and trust  documents and
               the  Summary  Plan  Description,  as amended,  for each  Employee
               Benefit  Plan and the last filed PBGC1 Form (if  applicable)  for
               each Employee  Benefit Plan, with respect to any Employee Benefit
               Plans  other than  multi-employer  plans  (within  the meaning of
               Section  3(37) of ERISA),  and other  reports filed with the PBGC
               during the last three plan years.

          (ix) All Employee  Pension  Benefit Plans are intended to be qualified
               retirement  plans  under the Code.  The IRS has  issued,  and the
               Seller  has  made   available   for   inspection,   one  or  more
               determination  letters with respect to the  qualification  of all
               Employee  Pension  Benefit  Plans stating that the IRS has made a
               favorable  determination  as to the  qualification  of such  Plan
               under   Section   401(a)   of  the  Code,   and  that   continued
               qualification  of the Plan in its  present  form will depend upon
               its effect in operation.  The time for adoption of any amendments
               required by changes in the Code since such determination  letters
               were issued,  or changes  required by the IRS as a condition  for
               continued qualification of such plans has not expired, or did not
               expire without such  amendments  being made.  Such plans are now,
               and always have been,  established  in writing and maintained and
               operated in accordance with the plan documents,  ERISA, the Code,
               and  all  other  applicable  laws.  Except  as  described  in the
               Disclosure  Schedule,  such Plans are now and  always  have been,
               established in writing and maintained and operated  substantially
               in accordance  with the plan documents,  ERISA,  the Code and all
               other applicable laws, in all material respects.

                                       44
<PAGE>
          (x)  There is no  liability  arising from the  termination  or partial
               termination of any Employee Benefit Plan,  except for liabilities
               as to which  adequate  reserves are  reflected  on the  Financial
               Statements,  and there exists no condition  presenting a material
               risk of such liability.

          (xi) The Seller has timely made any  contributions  it is obligated to
               make to any  multi-employer  plan  within the  meaning of Section
               3(37) of ERISA.  The Seller has no liability  arising as a result
               of withdrawal  from any  multi-employer  plan, no such withdrawal
               liability has been asserted and no such withdrawal liability will
               be asserted with regard to any  withdrawal or partial  withdrawal
               on or before the date of this Agreement.

9.26 Assets  Necessary  to  the  Business.
     ------------------------------------

     The Seller owns,  leases or holds under  license all assets and  properties
     (tangible  and  intangible)  necessary  to carry on its  Business No. 1 and
     Business No. 2 and  operations  as presently  conducted and as shown on the
     Financial Statements.  Such assets and properties are all of the assets and
     properties necessary to carry on Seller's Business No. 1 and Business No. 2
     as presently conducted and Shareholder (other than through his ownership of
     stock in the Seller and/or as set forth on the Disclosure Schedule) nor any
     member of his family  owns or leases or has any  interest  in any assets or
     properties  presently being used to carry on Business No. 1 or Business No.
     2 of Seller.

9.27 Transactions  with  Affiliates.
     ------------------------------

     Except  as  disclosed  on  the  Disclosure  Schedule,  there  is no  lease,
     sublease,  contract,  agreement or other arrangement of any kind whatsoever
     entered into by Seller and its Shareholder or Affiliate.

9.28 Territorial  Restrictions.
     -------------------------

     Except as described in the Disclosure Schedule, Seller is not restricted by
     any written agreement or understanding  with any other Person from carrying
     on the Business No. 1 and/or Business No. 2 anywhere in the world.  Neither
     Purchaser nor any of its Affiliates will, as a result of its acquisition of
     Purchased Assets No. 1 and/or  Purchased Assets No. 2 become  restricted in
     carrying on Business No. 1 and/or Business No. 2 anywhere in the world as a
     result of any contract or other  agreement to which Seller is a party or by
     which it is bound.

                                       45
<PAGE>
9.29 Full  Disclosure.
     ----------------

     None of the  representations  and warranties made by the Seller herein,  or
     made on its  behalf,  including  any  disclosures  made  in the  Disclosure
     Schedule,  contains or will contain, to the best of Seller's knowledge, any
     untrue statement of material fact or omits or will omit any material fact.

                                       10.
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------
                     OF PURCHASER NO. 1 AND PURCHASER NO. 2
                     --------------------------------------

Purchaser  No.  1  hereby  represents  and warrants to Seller that the following
statements  are  true  and  correct  as  of  the  date  hereof.

10.1 Organization,  Good  Standing  and  Power  of  Purchaser  No.  1.
     ----------------------------------------------------------------

     (a)  Purchaser No. 1 is a corporation duly  incorporated,  validly existing
          and in good  standing  under the laws of the State of Delaware and has
          full  corporate  power and lawful  authority  to execute,  deliver and
          perform this Agreement and conduct  Business No. 1 of Seller currently
          conducted  by  Seller  in each of the  jurisdictions  in which  Seller
          currently   conducts   its   Business   No.  1,  which  are  the  only
          jurisdictions  where the failure to be so qualified by Purchaser No. 1
          will have a  material  adverse  effect on the  business  prospects  or
          financial condition of Purchaser No. 1.

10.2 Status  of  Agreements.
     ----------------------

     (a)  All  requisite  corporate  action  (including  action  of its Board of
          Directors) to approve, execute, deliver and perform this Agreement and
          each of the other  agreements,  instruments  and other documents to be
          delivered by and on behalf of Purchaser No. 1 ("Other  Purchaser No. 1
          Documents") in connection  herewith has been taken by Purchaser No. 1.
          This  Agreement  has been duly and validly  executed and  delivered by
          Purchaser No. 1 and  constitutes  the valid and binding  obligation of
          Purchaser No. 1 enforceable  in accordance  with its terms.  All Other
          Purchaser No. 1 Documents in connection  herewith will,  when executed
          and  delivered,   constitute  the  valid  and  binding  obligation  of
          Purchaser No. 1 enforceable in accordance with their respective terms.

     (b)  No  authorization,  approval,  consent  or order of, or  registration,
          declaration or filing with, any court,  governmental body or agency or
          other public or private body, entity or person is required (except for
          Purchaser No. 1's primary lender, Deutsche Financial Services Company,
          whose consent shall be obtained  prior to Closing) in connection  with
          the execution,  delivery or performance of this Agreement or any Other
          Purchaser No. 1 Documents in connection herewith.

     (c)  Neither the execution,  delivery nor  performance of this Agreement or
          any of the Other Purchaser No. 1 Documents in connection herewith does
          or will:

          (i)  conflict  with,  violate or result in any breach of any judgment,
               decree, order, statute,  ordinance, rule or regulation applicable
               to Purchaser No. 1;

          (ii) conflict  with,  violate or result in any breach of any agreement
               or instrument to which Purchaser is a party or by which Purchaser
               No. 1 or any of  Purchaser's  assets or properties  is bound,  or
               constitute  a  default  thereunder  or give  rise  to a right  of
               acceleration of an obligation of Purchaser No. 1; or

          (iii)conflict  with  or  violate  any  provision  of the  Articles  of
               Incorporation or By-Laws of Purchaser No. 1.

10.3 Brokers  and  Finders.
     ---------------------

     No broker,  finder or other person or entity  acting in a similar  capacity
     has  participated  on  behalf  of  Purchaser  No. 1 in  bringing  about the
     transaction  herein  contemplated,  or rendered  any service  with  respect
     thereto or been in any way involved therewith.

Purchaser  No.  2  hereby  represents  and warrants to Seller that the following
statements  are  true  and  correct  as  of  the  date  hereof.

10.4 Organization,  Good  Standing  and  Power  of  Purchaser  No.  2.
     ----------------------------------------------------------------

     (a)  Purchaser No. 2 is a corporation duly  incorporated,  validly existing
          and in good  standing  under the laws of the State of Delaware and has
          full  corporate  power and lawful  authority  to execute,  deliver and
          perform this Agreement and conduct  Business No. 2 of Seller currently
          conducted  by  Seller  in each of the  jurisdictions  in which  Seller
          currently   conducts   its   Business   No.  2,  which  are  the  only
          jurisdictions  where the failure to be so qualified by Purchaser No. 2
          will have a  material  adverse  effect on the  business  prospects  or
          financial condition of Purchaser No. 2.

                                       46
<PAGE>
10.5 Status  of  Agreements.
     ----------------------

     (a)  All  requisite  corporate  action  (including  action  of its Board of
          Directors) to approve, execute, deliver and perform this Agreement and
          each of the other  agreements,  instruments  and other documents to be
          delivered by and on behalf of Purchaser No. 2 ("Other  Purchaser No. 2
          Documents") in connection  herewith has been taken by Purchaser No. 2.
          This  Agreement  has been duly and validly  executed and  delivered by
          Purchaser  No. 2and  constitutes  the valid and binding  obligation of
          Purchaser No. 2 enforceable  in accordance  with its terms.  All Other
          Purchaser No. 2 Documents in connection  herewith will,  when executed
          and  delivered,   constitute  the  valid  and  binding  obligation  of
          Purchaser No. 2 enforceable in accordance with their respective terms.

     (b)  No  authorization,  approval,  consent  or order of, or  registration,
          declaration or filing with, any court,  governmental body or agency or
          other public or private body, entity or person is required (except for
          Purchaser No. 2's primary lender, Deutsche Financial Services Company,
          whose consent shall be obtained  prior to Closing) in connection  with
          the execution,  delivery or performance of this Agreement or any Other
          Purchaser No. 2 Documents in connection herewith.

     (c)  Neither the execution,  delivery nor  performance of this Agreement or
          any of the Other Purchaser No. 2 Documents in connection herewith does
          or will:

          (i)  conflict  with,  violate or result in any breach of any judgment,
               decree, order, statute,  ordinance, rule or regulation applicable
               to Purchaser No. 2;

          (ii) conflict  with,  violate or result in any breach of any agreement
               or  instrument  to which  Purchaser  No. 2 is a party or by which
               Purchaser  No. 2 or any of  Purchaser's  assets or  properties is
               bound, or constitute a default thereunder or give rise to a right
               of acceleration of an obligation of Purchaser No. 2; or

          (iii)conflict  with  or  violate  any  provision  of the  Articles  of
               Incorporation or By-Laws of Purchaser No. 2.

10.6 Brokers  and  Finders.
     ---------------------

     No broker,  finder or other person or entity  acting in a similar  capacity
     has  participated  on  behalf  of  Purchaser  No. 2 in  bringing  about the
     transaction  herein  contemplated,  or rendered  any service  with  respect
     thereto or been in any way involved therewith.

                                       47
<PAGE>
10.7 Full  Disclosure
     ----------------

     None of the  representations  and warranties made by Purchaser No. 1 herein
     contains or will contain,  to the best of Purchaser No. 1's knowledge,  any
     untrue  statement of material fact or omits or will omit any material fact.
     None of the  representations  and warranties made by Purchaser No. 2 herein
     contains or will contain,  to the best of Purchaser No. 2's knowledge,  any
     untrue statement of material fact or omits or will omit any material fact.

                                       11.
                 SURVIVAL OF AND RELIANCE UPON REPRESENTATIONS,
                   WARRANTIES AND AGREEMENTS; INDEMNIFICATION
                   ------------------------------------------

11.1 Survival  of  Representations  and  Warranties.
     ----------------------------------------------

     The parties acknowledge and agree that all representat-ions, warranties and
     agreements  contained in this  Agreement or in any  agreement,  instrument,
     exhibit,  certificate,  schedule or other document  delivered in connection
     herewith,  shall  survive the Closing and  continue to be binding  upon the
     party giving such representation,  warranty or agreement and shall be fully
     enforceable to the extent provided for in Sections 11.3 and 11.4 hereof, at
     law or in equity,  for the  period  beginning  on the date of  Closing  and
     ending  three  (3)  years  thereafter,   except  for  the  representations,
     warranties and  agreements  designated and identified in Sections 3.1, 3.2,
     3.3, 3.4, 4.2,  9.3,  9.11,  9.12,  9.13,  9.16,  10.2 and 10.4 which shall
     survive the Closing and shall  terminate in accordance  with the statute of
     limitations  governing  written  contracts  in the State of  Minnesota  and
     Exhibit  D,  Exhibits  E,  E-1,  E-2 and E-3 and  Exhibit  F,  which  shall
     terminate as provided therein.

11.2 Reliance  Upon  and  Enforcement  of  Representations,  Warran-ties and
     -----------------------------------------------------------------------
     Agreements.
     ----------

     (a)  Seller hereby agrees that,  notwithstanding any right of Purchaser No.
          1 and/or  Purchaser No. 2 to fully  investigate the affairs of Seller,
          and  notwithstanding  knowledge of facts determined or determinable by
          Purchaser No. 1 and/or Purchaser No. 2 pursuant to such  investigation
          or right of  investigation,  Purchaser No. and/or Purchaser No. 2 have
          the  right to rely  fully  upon the  representations,  warranties  and
          agreements of Seller contained in this Agreement and upon the accuracy
          of  any  document,  certificate  or  exhibit  given  or  delivered  to
          Purchaser No. 1 and/or  Purchaser No. 2 pursuant to the  provisions of
          this Agreement.

                                       48
<PAGE>
     (b)  Purchaser   No.  1  and/or   Purchaser   No.  2  hereby   agree  that,
          notwithstanding  any right of Seller to fully  investigate the affairs
          of  Purchaser  No.  1 and/or  Purchaser  No.  2,  and  notwithstanding
          knowledge of facts  determined or  determinable  by Seller pursuant to
          such investigation or right of investigation, Seller have the right to
          rely fully upon the  representations,  warranties  and  agreements  of
          Purchaser No. 1 and/or Purchaser No. 2 contained in this Agreement and
          upon the accuracy of any  document,  certificate  or exhibit  given or
          delivered to Seller pursuant to the provisions of this Agreement.

11.3 Indemnification  by  Seller  and  Shareholder.
     ---------------------------------------------

     Provided  Purchaser  No. 1 and/or  Purchaser No. 2 make a written claim for
     indemnification  against  Seller and/or  Shareholder  within any applicable
     survival  period  specified in Section 11.1, and subject to the limitations
     set forth in Section 11.6, Seller and Shareholder  (jointly and severally),
     shall  indemnify  Purchaser  No. 1 and/or  Purchaser No. 2 against and hold
     them harmless from:

     (i)  any and all loss,  damage,  liability or deficiency  resulting from or
          arising  out of any  inaccuracy  in or breach  of any  representation,
          warranty, covenant, or obligation made or incurred by Seller herein or
          in any other  agreement,  instrument  or document  delivered  by or on
          behalf of Seller pursuant to the provisions of the Agreement;

     (ii) any imposition (including by operation of law) or attempted imposition
          by a third party upon  Purchaser  No. 1 and/or  Purchaser No. 2 of any
          liability of Seller which Purchaser No. 1 has not specifically  agreed
          to assume  pursuant  to Section  3.1 of this  Agreement  and/or  which
          Purchaser  No. 2 has not  specifically  agreed to assume  pursuant  to
          Section 3.2 of this Agreement;

     (iii)any  liability  (except for any Assumed  Liabilities  No. 1 or Assumed
          Liabilities No. 2 described in Sections 3.1 and 3.2,  respectively) or
          other  obligation  incurred by or imposed upon  Purchaser No. 1 and/or
          Purchaser  No. 2  resulting  from the failure of the parties to comply
          with the provisions of any law relating to bulk transfers which may be
          applicable to the transaction herein contemplated;

     (iv) any and  all  costs  and  expenses  (including  reasonable  legal  and
          accounting fees) related to any of the foregoing;

     (v)  any  deficiency  in the Net Asset Amount No. 1 and/or Net Asset Amount
          No. 2 set forth in Section 5.

                                       49
<PAGE>
     Except as  otherwise  provided in this  Agreement,  nothing in this Section
     11.3 shall be construed to limit the amount to which, or the time by which,
     by reason of offset or otherwise, that Purchaser No. 1 and/or Purchaser No.
     2 may  recover  from  Seller  or  Shareholder  pursuant  to this  Agreement
     resulting  from  Seller's  or  Shareholder's  breach  or  violation  of any
     representation, warranty, covenant or agreement contained herein.

     Any  amounts  to which  Purchaser  No.  1 and/or  Purchaser  No.  2,  their
     successors  or  assigns,  is entitled  to  indemnification  pursuant to the
     provisions  of this  Section,  shall  first be offset  against  the  amount
     payable to Seller under the promissory  notes set forth in Sections  4.3(a)
     and/or 4.4(a),  then against any payments due under Section 4.6.  Provided,
     however,  the offset in any one year may not exceed  the  aggregate  amount
     payable under Section 4.6, if any.

11.4 Indemnification  by  Purchaser  No.  1  and/or  Purchaser  No.  2.
     -----------------------------------------------------------------

     Provided  Shareholder  and Seller make a written claim for  indemnification
     against  Purchaser No. 1 and/or Purchaser No. 2, as applicable,  within any
     applicable  survival period specified in Section 12, Purchaser No. 1 and/or
     Purchaser No. 2, as  applicable,  shall  indemnify  Seller and  Shareholder
     against and hold it harmless  from any and all loss,  damage,  liability or
     deficiency resulting from or arising out of: (i) any Assumed Liabilities of
     Purchaser  No.  1 or  any  Assumed  Liabilities  of  Purchaser  No.  2 , as
     applicable;  (ii) any liability of Purchaser  No. 1 and/or  Purchaser No. 2
     arising  out of  Purchaser  No. 1's  and/or  Purchaser  No. 2's  operations
     subsequent  to the  Closing  (except to the extent  such  liability  is the
     result of a breach of a covenant or warranty  of Seller  hereunder);  (iii)
     any inaccuracy in or breach of any  representation,  warranty,  covenant or
     obligation  made or incurred by Purchaser No. 1 and/or  Purchaser No. 2, as
     applicable  herein  or in any  other  agreement,  instrument,  or  document
     delivered  by or on  behalf  of  Purchaser  No.  1 and/or  Purchaser  No. 2
     pursuant to the provisions of this Agreement;  and (iv) any and all related
     costs and expenses (including reasonable legal and accounting fees). Except
     as  otherwise  provided  herein,  nothing  in this  Section  11.4  shall be
     construed to limit the amount to which,  or the time by which, by reason of
     offset or  otherwise,  that Seller may recover from  Purchaser No. 1 and/or
     Purchaser  No. 2 pursuant to this  Agreement  resulting  from its breach or
     violation of any representation,  warranty, covenant or agreement contained
     herein.

                                       50
<PAGE>
11.5 Notification  of  and  Participation  in  Claims.
     ------------------------------------------------

     (a)  No claim for indemnification shall arise until notice thereof is given
          to the party from whom indemnity is sought.  Such notice shall be sent
          within ten (10) days after the party to be  indemnified  has  received
          notification  of such claim,  but  failure to notify the  indemnifying
          party  shall  in no  event  prejudice  the  right  of the  party to be
          indemnified under this Agreement,  unless the indemnifying party shall
          be  prejudiced  by such  failure  and then only to the  extent of such
          prejudice.  In the event that any legal proceeding shall be instituted
          or any claim or demand is  asserted  by any third  party in respect of
          which  Seller/Shareholder  on the one hand,  or Purchaser No. 1 and/or
          Purchaser  No.  2, as  applicable,  on the  other  hand,  may  have an
          obligation to indemnify the other,  the party  asserting such right to
          indemnity  (the "Party to be  Indemnified")  shall give or cause to be
          given to the party from whom  indemnity  is sought (the  "Indemnifying
          Party") written notice thereof and the  Indemnifying  Party shall have
          the right, at its option and expense, to participate in the defense of
          such  proceeding,  claim or demand,  but not to control  the  defense,
          negotiation  or settlement  thereof,  which control shall at all times
          rest with the Party to be Indemnified,  unless the Indemnifying  Party
          irrevocably  acknowledges in writing full and complete  responsibility
          for  and  agrees  to  provide  indemnification  of  the  Party  to  be
          Indemnified,  in which case such  Indemnifying  Party may assume  such
          control through counsel of its choice and at its expense. In the event
          the   Indemnifying   Party  assumes   control  of  the  defense,   the
          Indemnifying  Party shall not be  responsible  for the legal costs and
          expenses of the Party to be  Indemnified  in the event the Party to be
          Indemnified decides to join in such defense.  The parties hereto agree
          to  cooperate  fully with each other in  connection  with the defense,
          negotiation  or settlement  of any such third party legal  proceeding,
          claim or demand.

     (b)  If the  Party to be  Indemnified  is also the  party  controlling  the
          defense,  negotiation or settlement of any matter, and if the Party to
          be Indemnified  determines to compromise  the matter,  the Party to be
          Indemnified  shall  immediately  advise the Indemnifying  Party of the
          terms and conditions of the proposed  settlement.  If the Indemnifying
          Party  agrees to accept  such  proposal,  the Party to be  Indemnified
          shall  proceed to  conclude  the  settlement  of the  matter,  and the
          Indemnifying  Party  shall  immediately  indemnify  the  Party  to  be
          Indemnified pursuant to the terms of Sections 11.3 and 11.4 hereunder.
          If the Indemnifying  Party does not agree within fourteen (14) days to
          accept  the  settlement  (said  14-day  period  to begin on the  first
          business day following the date such party receives a complete copy of
          the settlement  proposal),  the Indemnifying  Party shall  immediately
          assume control of the defense,  negotia-tion or settlement thereof, at
          that  Indemnifying  Party's  expense.  Thereafter,  the  Party  to  be
          Indemnified  shall be  indemnified  in the entirety for any  liability
          arising out of the ultimate  defenses,  negotiation  or  settlement of
          such matter.

                                       51
<PAGE>
     (c)  If the  Indemnifying  Party  is the  party  controlling  the  defense,
          negotiation or settlement of any matter,  and the  Indemnifying  Party
          determines  to compromise  the matter,  the  Indemnifying  Party shall
          immediately  advise  the  Party to be  Indemnified  of the  terms  and
          conditions of the proposed settlement.  If the Party to be Indemnified
          agrees to accept such proposal,  the Indemnifying  Party shall proceed
          to conclude the settlement of the matter and immediately indemnify the
          Party to be Indemnified pursuant to the terms of Sections 11.3 or 11.4
          hereunder.  If the  Party  to be  Indemnified  does not  agree  within
          fourteen  (14) days to accept the  settlement  (said 14-day  period to
          begin on the first business day following the date such party receives
          a  complete  copy  of  the  settlement  proposal),  the  Party  to  be
          Indemnified   shall   immediately   assume  control  of  the  defense,
          negotiation or settlement  thereof,  at the Party to be  Indemnified's
          expense.  If the final  amount  paid to resolve the claim is less than
          the  amount  of  the  original   proposed   settlement   made  by  the
          Indemnifying  Party,  then the Party to be  Indemnified  shall receive
          such  indemnification  pursuant  to  Sections  11.3  or  11.4  hereof,
          including any and all expenses incurred by the Party to be Indemnified
          incurred in connection with the defense,  negotiation or settlement of
          such matter up to the maximum of the original proposed settlement.  If
          the amount  finally  paid to resolve  the claim is equal to or greater
          than the amount of the original  proposed  settlement  proposed by the
          Indemnifying   Party,  then  the  Indemnifying   Party  shall  provide
          indemnification  pursuant to Sections  11.3 and 11.4 for the amount of
          the original  settlement proposal submitted by the Indemnifying Party,
          and the Party to be Indemnified  shall be responsible  for all amounts
          in  excess  of  the  original  settlement  proposal  submitted  by the
          Indemnifying Party and all costs and expenses incurred by the Party to
          be  Indemnified  in  connection  with  such  defense,  negotiation  or
          settlement.

11.6 Limitation  on  Liability.
     -------------------------

     (a)  Notwithstanding  anything contained herein to the contrary,  no claims
          for indemnification  shall be made by Purchaser No. 1 and/or Purchaser
          No. 2 against the Seller and Shareholder until such time as all claims
          hereunder by Purchaser No. 1 and/or Purchaser No. 2 exceed  $10,000.00
          in the  aggregate and then  indemnification  shall be made only to the
          extent that such claim or claims exceed $10,000.00 in the aggregate.

     (b)  Notwithstanding  anything  herein  to  the  contrary,  no  claims  for
          indemnification  shall  be  made by  Seller  and  Shareholder  against
          Purchaser  No. 1 and/or  Purchaser No. 2 until such time as all claims
          hereunder  by Seller  and  Shareholder  exceed  Ten  Thousand  Dollars
          ($10,000.00) in the aggregate,  and then indemnification shall be made
          only to the extent that such claim or claims exceed  $10,000.00 in the
          aggregate.

11.7 Excluded  Liabilities.
     ---------------------

     (a)  Notwithstanding  anything  contained  herein to the  contrary,  in the
          event any Excluded  Liability  would attach to Purchased  Assets No. 1
          and/or Purchased Assets No. 2 under any successor liability statute or
          otherwise,  notwithstanding  the  fact  that  such  liability  was  an

                                       52
<PAGE>
          Excluded  Liability,  Seller  and  Shareholder  shall be  jointly  and
          severally  responsible for the payment of such Excluded  Liability and
          the lien on  Purchased  Assets  No. 1 and/or  Purchased  Assets  No. 2
          (which would represent a breach of certain  representations  under the
          Agreement) related to such liability.

                                       12.
     THE  CLOSING
     ------------

12.1 Date,  Time  and  Place  of  Closing.
     ------------------------------------

     Consummation of the transactions  contemplated hereby (the "Closing") shall
     take place on July 3, 2000 (the  "Closing  Date"),  effective at 12:01 a.m.
     EDT at the offices of Lindhorst & Dreidame,  312 Walnut Street, Suite 2300,
     Cincinnati,  Ohio 45202,  or on such other  Closing  Date, or at such other
     time and/or place as the parties may mutually agree upon.

12.2 Conditions  Precedent  to  Purchaser  No.  1's  and  Purchaser  No. 2's
     -----------------------------------------------------------------------
     obligations.
     -----------

     The  obligation  of Purchaser  No. 1 and/or  Purchaser  No. 2 to perform in
     accordance  with this Agreement and to consummate the  transactions  herein
     contemplated is subject to the satisfaction of the following  conditions at
     or before the Closing:

     (a)  Seller   shall  have   complied   with  and   performed   all  of  the
          representations,   warranties,   agreements  and  covenants  hereunder
          required to be performed by it prior to or at the Closing;

     (b)  There  shall be no  pending  or  threatened  legal  action  which,  if
          successful,   would  prohibit   consummation  or  require  substantial
          rescission of the transactions contemplated by this Agreement;

                                       53
<PAGE>
     (c)  The business,  aggregate properties and operations of Seller shall not
          have  been  materially  adversely  affected  as a result  of any fire,
          accident or other  casualty or any labor  disturbance or act of God or
          the public  enemy,  and there  shall  otherwise  have been no material
          adverse change to the business, aggregate properties, or operations of
          Seller since October 31, 1999;

     (d)  Seller shall have delivered to Purchaser No. 1 and/or Purchaser No. 2,
          as applicable,  at or before the Closing, the following documents, all
          of which  shall  be in form and  substance  reasonably  acceptable  to
          Purchaser No. 1 and Purchaser No. 2 and its counsel:

          (i)  The instruments of transfer required by Sections 2.6 and 2.7;
          (ii) Releases  (or  copies  thereof)  of all liens,  claims,  charges,
               encumbrances,  security  interests and  restrictions on Purchased
               Assets  No. 1 and  Purchased  Assets No. 2  necessary  to provide
               Purchaser No. 1 with good title to each of the  Purchased  Assets
               No. 1 at the  Closing  and to provide  Purchaser  No. 2 with good
               title to each of the Purchased Assets no. 2 at the Closing;

          (iii)Certified  copies of the corporate  actions taken by the Board of
               Directors and  Shareholder of Seller  authorizing  the execution,
               delivery and performance of this Agreement;

          (iv) Certificates  of Existence for Seller from the Secretary of State
               of  Minnesota  dated no earlier  than  fifteen (15) days prior to
               Closing;

          (v)  Opinion Letter of Siegel, Brill, Greupner,  Duffy & Foster, P.A.,
               containing the opinions set forth in Exhibit G;

          (vi) Seller   and   Shareholder    shall   have   entered   into   the
               non-competition  agreements  as set forth in Exhibits E, E-1, E-2
               and E-3;

          (vii)R. Lund shall have  entered  into the  Employment  Agreement  set
               forth in Exhibit D;

          (viii)Seller shall have entered into the Sublease Agreement set  forth
               in Exhibit F; and

     (e)  Seller  will adopt and file with the  Secretary  of States of Delaware
          and Minnesota an Amendment to the Charter of Seller  changing the name
          of Seller to a name  substantially  dissimilar to  DATASOURCE  SYSTEMS
          CORPORATION,  dba DATASOURCE HAGEN and/or DATASOURCE SYSTEMS MARKETING
          CORPORATION and Seller shall execute a Consent for Use of Similar Name
          form as set forth in Section 9.19.

                                       54
<PAGE>
     (f)  Purchaser No. 1 and Purchaser No. 2 shall have received  assurances in
          form and  substance  satisfactory  to it (that may  include  insurance
          certificates)  that  Seller has made all  provisions  necessary  under
          applicable law, with regard to an employer's obligation to provide for
          a continuation of health insurance and other benefits of any employee,
          who is not employed by Seller following termination of employment.

12.3 Conditions  Precedent  to  Seller's  Obligations.
     ------------------------------------------------

     The  obligation of Seller to perform in accordance  with this Agreement and
     to  consummate  the  transactions  herein  contemplated  is  subject to the
     satisfaction of the following conditions at or before the Closing:

     (a)  Performance  by  Purchaser  No.  1 and  Purchaser  No. 2 of all of the
          representa-tions, warranties, agreements and covenants to be performed
          by it at or before the Closing;

     (b)  There  shall be no  pending  or  threatened  legal  action  which,  if
          successful,   would  prohibit   consummation  or  require  substantial
          rescission of the transactions contemplated by this Agreement;

     (c)  Purchaser  No. 1 shall  deliver to Seller at or before the Closing the
          following  documents,  all of which  shall  be in form  and  substance
          acceptable to Seller and its counsel:

          (i)  A  Promissory  Note in the  amount  set forth in  Section  4.3(a)
               hereof, if any;

          (ii) An assumption of liability  agreement under which Purchaser No. 1
               assumes the liabilities set forth in Section 3.1;

          (iii)Certified copies of the corporate  actions taken by Purchaser No.
               1 authorizing  the  execution,  delivery and  performance of this
               Agreement;

          (iv) Certificate  of  Good  Standing  for  Purchaser  No.  1 from  the
               Secretary of State of Delaware dated no earlier than fifteen (15)
               days prior to the date of Closing; and

                                       55
<PAGE>
          (v)  Opinion Letter of Lindhorst & Dreidame, counsel for Purchaser No.
               1, addressed to Seller and dated the Closing Date, containing the
               opinions set forth in Exhibit H.

     (d)  Purchaser  No. 2 shall  deliver to Seller at or before the Closing the
          following  documents,  all of which  shall  be in form  and  substance
          acceptable to Seller and its counsel:

          (i)  A Promissory  Note payable to Seller at closing in the amount set
               forth in Section 4.4(a);

          (ii) An assumption of liability  agreement under which Purchaser No. 2
               assumes the liabilities set forth in Section 3.2;

          (iii)Certified copies of the corporate  actions taken by Purchaser No.
               2 authorizing  the  execution,  delivery and  performance of this
               Agreement;

          (iv) Certificate  of  Good  Standing  for  Purchaser  No.  2 from  the
               Secretary of State of Delaware dated no earlier than fifteen (15)
               days prior to the date of Closing; and

          (v)  Opinion  Letter of  Lindhorst & Dreidame  Co.,  LPA,  counsel for
               Purchaser No. 2,  addressed to Seller and dated the Closing Date,
               containing the opinions set forth in Exhibit I.

     (e)  Purchaser No. 1 shall have entered into the  Employment  Agreement set
          forth in Exhibit D with R. Lund.

     (f)  Purchaser No. 1 shall have entered into a Sublease Agreement set forth
          in Exhibit F with Seller.

                                       13.
                               GENERAL PROVISIONS
                               ------------------

13.1 Publicity.
     ---------

     All public  announcements  relating to this  Agreement or the  transactions
     contemplated  hereby will be made by Purchaser  No. 1 and  Purchaser  No. 2
     with  the  consent  of  Seller,  which  consent  will  not be  unreasonably
     withheld,  except  for any  disclosure  which may be  required  because  of
     Purchaser   No.   1's   being   a   publicly-traded   corporation   on  the
     over-the-counter market.

                                       56
<PAGE>
13.2 Expenses.
     --------

     Purchaser  No. 1 will  bear  and pay all of its  expenses  incident  to the
     transactions contemplated by this Agreement which are incurred by Purchaser
     No. 1 or its representatives,  Purchaser No. 2 will bear and pay all of its
     expenses incident to the transactions  contemplated by this Agreement which
     are incurred by Purchaser  No. 2 or its  representatives,  and Seller shall
     bear and pay all of the expenses incident to the transactions  contemplated
     by this  Agreement  which  are  incurred  by  Seller  or  their  respective
     representatives.

                                       57
<PAGE>
13.3 Notices.
     -------

     All notices and other communications required by this Agreement shall be in
     writing  and  shall be  deemed  given if  delivered  by hand or  mailed  by
     registered  mail  or  certified  mail,  return  receipt  requested,  to the
     appropriate  party at the following address (or at such other address for a
     party as shall be specified by notice pursuant hereto):

     (a)  If to Purchaser No. 1, to:

          Pomeroy  Computer  Resources,  Inc.
               1020  Petersburg  Road
               Hebron,  Kentucky  41048

     (b)  If to Purchaser No. 2, to

               Pomeroy  Select  Integration  Solutions,  Inc.
               1020  Petersburg  Road
               Hebron,  Kentucky  41048

          With  a  copy  to:

               James  H.  Smith  III,  Esq.
               Lindhorst  &  Dreidame
               312  Walnut  Street,  Suite  2300
               Cincinnati,  Ohio  45202

     (b)  If to Seller, to:

               Datasource  Systems  Corporation,
               dba  Datasource  Hagen  and
               Datasource  Systems  Marketing  Corporation
               6520  Nordic  Drive,  S.
               Edina,  Minnesota  55439

          With  a  copy  to:

               John  Watson,  Esq.
               Siegel,  Brill,  Greupner,  Duffy  &  Foster,  P.A.
               1300  Washington  Square
               100  Washington  Ave.  So.
               Minneapolis,  Minnesota  55401

                                       58
<PAGE>
     (c)  If to Shareholder, to:

               Roar  Lund
               6520  Nordic  Dr.  S.
               Edina,  Minnesota  55439

13.4 Binding  Effect.
     ---------------

     Except as may be otherwise  provided  herein,  this  Agreement  and all the
     provisions  hereof  shall be binding  upon and inure to the  benefit of the
     parties  hereto  and  their  respective   heirs,   legal   representatives,
     successors and assigns.

13.5 Headings.
     --------

     The headings in this  Agreement  are  intended  solely for  convenience  of
     reference   and  shall  be  given  no  effect   in  the   construction   or
     interpretation of this Agreement.

13.6 Exhibits.
     --------

     The  Exhibit  and  Disclosure   Schedule  referred  to  in  this  Agreement
     constitute an integral part of this Agreement as if fully rewritten herein.

13.7 Counterparts.
     ------------

     This  Agreement  may be executed in  multiple  counterparts,  each of which
     shall be deemed an original,  but all of which constitute  together one and
     the same document.

13.8 Governing  Law.
     --------------

     This  Agreement  shall be construed in accordance  with and governed by the
     laws of the  State of  Minnesota,  without  regard  to its  laws  regarding
     conflict of laws.

13.9 Severability.
     ------------

     If any provision of this Agreement shall be held unenforceable, invalid, or
     void to any extent for any reason, such provision shall remain in force and
     effect to the maximum extent allowable,  if any, and the  enforceability or
     validity  of the  remaining  provisions  of  this  Agreement  shall  not be
     affected thereby.

                                       59
<PAGE>
13.10 Waivers;  Remedies  Exclusive.
      -----------------------------

     No waiver of any right or option  hereunder by any party shall operate as a
     waiver of any  other  right or  option,  or the same  right or option  with
     respect to any  subsequent  occasion for its  exercise,  or of any right to
     damages.  No waiver by any party of any breach of this  Agreement or of any
     representation  or warranty  contained herein shall be held to constitute a
     waiver of any other breach or a continuation of the same breach.  No waiver
     of any of the provisions of this Agreement  shall be valid and  enforceable
     unless such waiver is in writing and signed by the party granting the same.
     Except as  otherwise  provided  in the  Escrow  Agreement,  the  Employment
     Agreement,  the Lease Agreement and the Covenant Not to Compete Agreements,
     the indemnification  provided for by Section 12 herein shall constitute the
     exclusive  remedy of any party with  respect to (i) the  matters  for which
     such indemnification is provided and (ii) any other matters arising out of,
     relating  to  or  connected  with  this   Agreement  or  the   transactions
     contemplated  hereby,  and whether any claims or causes of action  asserted
     with  respect to any such  matters are brought in  contract,  tort or other
     legal theory whatsoever.

13.11 Assignments.
      -----------

     Except as otherwise  provided in this Agreement,  no party shall assign its
     rights or obligations  hereunder prior to Closing without the prior written
     consent of the other party.

13.12 Entire  Agreement.
      -----------------

     This Agreement and the  agreements,  instruments  and other documents to be
     delivered  hereunder  constitute  the entire  understanding  and  agreement
     concerning the subject matter hereof. All negotiations  between the parties
     hereto are merged into this  Agreement,  and there are no  representations,
     warranties, covenants, understandings, or agreements, oral or otherwise, in
     relation thereto between the parties other than those  incorporated  herein
     and to be delivered hereunder.  Except as otherwise expressly  contemplated
     by this  Agreement,  nothing  expressed  or  implied in this  Agreement  is
     intended or shall be construed so as to grant or confer on any person, firm
     or  corporation  other than the  parties  hereto  any  rights or  privilege
     hereunder. No supplement, modification or amendment of this Agreement shall
     be binding unless executed in writing by the parties hereto.

                                       60
<PAGE>
13.13 Business  Records.
      -----------------

     Seller and  Shareholder  shall be permitted to retain  copies of such books
     and records  relating to Purchased Assets No. 1 and/or Purchased Assets No.
     2 and relating to the  accounting  and tax matters of Business No. 1 and/or
     Business  No. 2 and to have  access to all  original  copies of  records so
     delivered to Purchaser No. 1 and/or  Purchaser  No. 2 at reasonable  times,
     for any reasonable  business  purpose,  for a period of six (6) years after
     the Closing.

13.14 Dissolution  of  Seller.
      -----------------------

     Purchaser No. 1 and Purchaser No. 2 acknowledge that following the Closing,
     Seller  may adopt a plan of  liquidation  with the intent to  dissolve  the
     corporation.  Provided, however, Seller and Shareholder agree that the plan
     of liquidation  will not be effectuated and implemented by Seller until all
     the  conditions  set forth in  Section 2 of this  Agreement  regarding  the
     transfer of all the respective  purchased  assets have been  effectuated by
     Seller.  Seller  acknowledges that Purchaser No. 1 and Purchaser No. 2 will
     suffer  irreparable  harm in the event that Seller would liquidate prior to
     satisfying all of its obligations under the terms of this Agreement and the
     exhibits hereto.

13.15 Compliance  with  Bulk  Sales  Act.
      ----------------------------------

     Purchaser No. 1 and Purchaser No. 2 waive compliance with the provisions of
     any  applicable  bulk  sales law and Seller and  Shareholder,  jointly  and
     severally,  agree  to  indemnify  and  hold  harmless  Purchaser  No. 1 and
     Purchaser No. 2 from any  liability  incurred as a result of the failure to
     so comply, except to liabilities  explicitly assumed hereunder by Purchaser
     No. 1 and/or Purchaser No. 2.

                                      14.
                        SALE OF EQUIPMENT BY SHAREHOLDER
                        --------------------------------
                            DBA GEILO LEASING COMPANY
                           --------------------------

                                       61
<PAGE>
14.1 At Closing,  Shareholder  shall sell to Purchaser  No. 1 the  equipment set
     forth on Exhibit J attached hereto,  along with any and all leases relating
     thereto, for the sum of Thirty Thousand Dollars ($30,000.00). Such transfer
     shall be by bill of sale and assignment and incident  thereto,  Shareholder
     shall  represent  good  title  to  such  assets,  free  and  clear  of  all
     encumbrances  whatsoever,  whether perfected or unperfected,  and by way of
     illustration,  that there are not any unpaid taxes,  assessments or charges
     due or payable by Shareholder to any federal, state or local agency, or any
     obligations or liabilities or any unsatisfied  judgment(s)  against,  or to
     the best of Shareholder's  knowledge,  any litigation or proceeding pending
     or threatened  against  Shareholder by any party that could become a claim,
     obligation,  liability,  lien or other charge of or against Purchaser No. 1
     or such assets.

                                      15.
                                PLEDGE AGREEMENT
                                ----------------

15.1 To secure Shareholder's obligations under this Agreement, Shareholder shall
     pledge  to  Purchaser  No.  1 and  Purchaser  No.  2 all of his  membership
     interest  in Lund Real  Properties,  LLC,  a  Minnesota  limited  liability
     company.   A  copy  of  said  pledge   agreement  is  attached  hereto  and
     incorporated herein by reference as Exhibit K.

     The  parties hereto have executed this Agreement as of the date first above
written.

WITNESSES:                         DATASOURCE SYSTEMS CORPORATION dba DATASOURCE
HAGEN  and
                                   DATASOURCE  SYSTEMS
                                   MARKETING  CORPORATION
___________________________

___________________________          By:________________________________
                                        Roar  Lund,  President

                                   POMEROY  COMPUTER  RESOURCES,
___________________________          INC.

___________________________          By:________________________________
                                        Stephen  E.  Pomeroy
                                        Chief  Financial  Officer

                                       62
<PAGE>
                                     POMEROY  SELECT  INTEGRATION
___________________________          SOLUTIONS,  INC.

___________________________          By:________________________________
                                        Stephen  E.  Pomeroy
                                        CEO  and  President

___________________________          __________________________________
                                   ROAR  LUND

___________________________

                                       63
<PAGE>
                                                                         (jj)(2)

     EMPLOYMENT  AGREEMENT

THIS  AGREEMENT  made  as  of  the 3rd day of July, 2000, by and between POMEROY
COMPUTER  RESOURCES,  INC.,  a  Delaware  corporation ("Company"), and ROAR LUND
("Employee").

                              W I T N E S S E T H :

WHEREAS,  the  Company  entered  into  an  Asset  Purchase  Agreement ("Purchase
Agreement")  of  even  date pursuant to which it purchased substantially all the
assets  of  DataSource  Systems Corporation, dba DataSource Hagen ("DataSource")
used  in  its  business of marketing and selling a broad range of microcomputers
and  related  products  including  equipment  selection  procurement  and
configuration;  and

WHEREAS, Employee, as an inducement for and in consideration of Company entering
into  the  Purchase  Agreement,  has  agreed  to  enter  into  and  execute this
Employment  Agreement  pursuant  to  Section  6  thereof;  and

WHEREAS,  Company  desires  to  engage the services of Employee, pursuant to the
terms,  conditions  and  provisions  as  hereinafter  set  forth.

NOW,  THEREFORE,  in  consideration  of  the  foregoing  premises and the mutual
covenants  herein  set  forth, the parties hereby covenant and agree as follows:

1.   Employment.  The Company  agrees to employ the  Employee,  and the Employee
     ---------
     agrees  to be  employed  by the  Company,  upon  the  following  terms  and
     conditions.

2.   Term. The initial term of Employee's  employment pursuant to this Agreement
     ----
     shall begin on the 3rd day of July,  2000,  and shall continue for a period
     of five (5) years,  ending June 30, 2005 unless terminated earlier pursuant
     to the provisions of Section 10, provided that Sections 8, 9, 10(b) and 11,
     if applicable,  shall survive the termination of such employ-ment and shall
     expire in accordance with the terms set forth therein.

3.   Renewal Term. The term of Employee's  employment shall  automatically renew
     ------------
     for  additional  consecutive  renewal  terms of one (1) year unless  either
     party gives written notice of his/its intent not to renew the terms of this
     Agreement sixty (60) days prior to expiration of the then expiring term.

<PAGE>
4.   Duties.  Employee  shall serve as Manager of the Company's  Minneapolis/St.
     ------
     Paul Division.  Employee shall be responsible to and report directly to the
     officers  of  Company.  Employee  shall at all time  have such  powers  and
     authorities as shall be reasonably  required to discharge such duties in an
     efficient  manner  together  with  such  facilities  and  services  as  are
     appropriate  to his  position.  Employee  shall devote his best efforts and
     substantially  all his time during normal  business  hours to the diligent,
     faithful and loyal  discharge of the duties of his  employment  and towards
     the proper,  efficient and  successful  conduct of the  Company's  affairs.
     Employee  further  agrees to refrain during the term of this Agreement from
     making any sales of competing  services or products or from  profiting from
     any  transaction  involving  computer  services or products for his account
     without the express written consent of Company.

5.   Compensation.  For  all  services  rendered  by  the  Employee  under  this
     ------------
     Agreement  (in  addition to other  monetary or other  benefits  referred to
     herein), compensation shall be paid to Employee as follows:

     (a)  Base  Salary:  During each  fiscal  year of the  initial  term of this
          Agreement, Employee shall be paid an annual base salary of One Hundred
          Thirty-Two Thousand Dollars  ($132,000.00).  Said base salary shall be
          payable in accordance  with the  historical  payroll  practices of the
          Company.

6.   Fringe  Benefits.  During  the term of this  Agreement,  Employee  shall be
     ----------------
     entitled to the following benefits:

     (a)  Health Insurance - Employee shall be provided with the standard family
          medical  health and  insurance  coverage  maintained by Company on its
          employees.  Company and Employee shall each pay fifty percent (50%) of
          the cost of such coverage.

     (b)  Vacation - Employee shall be entitled each year to a vacation of three
          (3) weeks  during which time his  compensa-tion  will be paid in full.
          Provided,  however,  such weeks may not be taken consecutively without
          the written consent of Company.

     (c)  Retirement   Plan  -  Employee   shall   participate,   after  meeting
          eligibility  requirements,  in any qualified  retirement  plans and/or
          welfare  plans  maintained  by the  Company  during  the  term of this
          Agreement.

     (d)  Automobile  -  Company  shall  provide  Employee  with  an  automobile
          allowance of $500.00 per month.  Employee shall be responsible for all
          insurance, maintenance and repairs to such vehicle.

     (e)  Other Company  Programs - Employee shall be eligible to participate in
          any other plans or programs  implemented by the Company for all of its
          employees with duties and responsibilities similar to Employee.

                                        2
<PAGE>
     (f)  Employee shall be  responsible  for any and all taxes owed, if any, on
          the fringe benefits provided to him pursuant to this Section 6.

7.   Expenses. During the term of this Agreement,  Employee shall be entitled to
     ---------
     receive prompt  reimbursement  for all reasonable and customary  travel and
     entertainment expenses or other out-of-pocket business expenses incurred by
     Employee  in  fulfilling   the  Employee's   duties  and   responsibilities
     hereunder, including, all expenses of travel and living expenses while away
     from  home on  business  or at the  request  of and in the  service  of the
     Company,  provided  that such  expenses are incurred and  accounted  for in
     accordance with the reasonable  policies and procedures  established by the
     Company.

8.   Non-Competition.  Employee expressly acknowledges the provisions of Section
     ---------------
     7 of the Purchase Agreement relating to Employee's  Covenant Not to Compete
     with Company and also  Employee's  Covenant  Not to Compete with  Company's
     wholly-owned  subsidiary,   Pomeroy  Select  Integration  Solutions,   Inc.
     Accordingly,  such  provisions  of  Section  7 are  incorporated  herein by
     reference to the extent as if restated in full  herein.  In addition to the
     consideration received under this Agreement,  Employee acknowledges that as
     the sole  shareholder  of the common stock of  DataSource,  he has received
     substantial  consideration  pursuant to such Purchase Agreement and that as
     an  inducement  for, and in  consideration  of,  Company  entering into the
     Purchase  Agreement and Company entering into this Agreement,  Employee has
     agreed  to be  bound  by such  provisions  of  Section  7 of the  Pur-chase
     Agreement.  Accordingly,  such provisions of Section 7 and Exhibits I-2 and
     I-3 and the  restrictions on Employee thereby imposed shall apply as stated
     therein.

9.   Non-Disclosure  and Assignment of  Confidential  Information.  The Employee
     ------------------------------------------------------------
     acknowledges   that  the  Company's  trade  secrets  and  confidential  and
     proprietary information, including without limitation:

     (a)     unpublished  information  concerning  the  Company's:

          (i)     research  activities  and  plans,
          (ii)    marketing  or  sales  plans,
          (iii)   pricing  or  pricing  strategies,
          (iv)    operational  techniques,
          (v)     customer  and  supplier  lists,  and
          (vi)    strategic  plans;

     (b)     unpublished  financial  information,  including  unpublished
             information concerning revenues, profits and profit margins;

                                        3
<PAGE>
     (c)     internal  confidential  manuals;  and

     (d)     any  "material  inside  information"  as  such  phrase  is used for
             purposes  of  the  Securities  Exchange  Act  of  1934,  as
             amended;

all  constitute  valuable,  special  and  unique  proprietary  and  trade secret
information  of  the  Company.  In recognition of this fact, the Employee agrees
that  the  Employee  will not disclose any such trade secrets or confidential or
proprietary information (except (i) information which becomes publicly available
without  violation of this Agreement, (ii) information of which the Employee did
not know and should not have known was disclosed to the Employee in violation of
any  other person's confidentiality obligation, and (iii) disclosure required in
connection  with any legal process), nor shall the Employee make use of any such
information  for  the  benefit  of  any  person, firm, operation or other entity
except  the  Company  and  its  subsidiaries  or  affiliates.  The  Employee's
obligation  to  keep  all  of  such  information confidential shall be in effect
during  and  for  a  period  of  five  (5)  years  after  the termination of his
employment; provided, however, that the Employee will keep confidential and will
not  disclose  any  trade  secret  or similar information protected under law as
intangible  property  (subject  to  the  same  exceptions  set  forth  in  the
parenthetical  clause  above)  for  so  long  as  such  protection  under law is
extended.

10.  Termination.
     ------------

(a)  The Employee's employment with the Company may be terminated at any time as
     follows:

          (i)  By Employee's death;

          (ii) By  Employee's   physical  or  mental  disability  which  renders
               Employee unable to perform his duties hereunder;

          (iii)By the Company,  for cause upon three (3) day's written notice to
               Employee. For purposes of this Agreement,  the term "cause" shall
               mean  termination  upon:  (i) the engaging by Employee in conduct
               which is  demonstrably  and materially  injurious to the Company,
               monetarily  or  otherwise,  including  but  not  limited  to  any
               material  misrepresentation  related  to the  performance  of his
               duties;  (ii) the  conviction  of  Employee  of a felony or other
               crime involving theft or fraud,  (iii)  Employee's gross neglect,
               gross  misconduct  or gross  insubordination  in carrying out his
               duties hereunder  resulting,  in either case, in material harm to
               the  Company;  or (iv) any  material  breach by  Employee of this
               Agreement;  or (v) by either the  Employee or Company upon ninety
               (90)  days'  written  notice at any time  after  thirty-six  (36)
               months of employment.  Company's right to terminate shall only be
               applicable if it has closed its Minneapolis/St. Paul Division.

                                        4
<PAGE>
     (b)  Compensation  upon  Termination:   In  the  event  of  termination  of
          employment,  the Employee or his estate, in the event of death,  shall
          be  entitled to his annual  base  salary and other  benefits  provided
          hereunder to the date of his termination.

11.  Disability.  In the event that Employee becomes temporarily disabled and/or
     -----------
     totally and permanently disabled, physically or mentally, which renders him
     unable to perform his duties hereunder,  Employee shall receive one hundred
     percent  (100%) of his base  annual  salary  (in effect at the time of such
     disability) for a period of one (1) year following the initial date of such
     disability  (offset by any  payments to the Employee  received  pursuant to
     disability benefit plans, if any, maintained by the Company.) Such payments
     shall be payable in twelve consecutive equal monthly installments and shall
     commence thirty (30) days after the determination by the physicians of such
     disability as set forth below.

     For purposes of this Agreement,  Employee shall be deemed to be temporarily
     disabled  and/or  totally  and  permanently  disabled if attested to by two
     qualified  physicians,  (one to be  selected  by  Company  and the other by
     Employee) competent to give opinions in the area of the disabled Employee's
     physical  and/or mental  condition.  If the two physicians  disagree,  they
     shall select a third physician, whose opinion shall control. Employee shall
     be  deemed  to be  temporarily  disabled  and/or  totally  and  permanently
     disabled  if  he  shall  become  disabled  as a  result  of  any  medically
     determinable  impairment of mind or body which  renders it  impossible  for
     such  Employee  to perform  satisfactorily  his duties  hereunder,  and the
     qualified physician(s) referred to above certify that such disability does,
     in fact, exist. The opinion of the qualified physician(s) shall be given by
     such physician(s),  in writing directed to the Company and to Employee. The
     physician(s)  decision  shall include the date that  disability  began,  if
     possible, and the 12th month of such disability,  if possible. The decision
     of such  physician(s)  shall be final and  conclusive  and the cost of such
     examination shall be paid by Company.

12.  Severability.  In case any one (1) or more of the  provisions  or part of a
     ------------
     provision contained in this Agreement shall be held to be invalid,  illegal
     or   unenforceable  in  any  respect,   such   invalidity,   illegality  or
     unenforceability  shall  not  affect  any  other  provision  or  part  of a
     provision of this Agreement.  In such a situation,  this Agreement shall be
     reformed  and  construed  as if  such  invalid,  illegal  or  unenforceable
     provision,  or part of a provision,  had never been contained  herein,  and
     such  provision  or part shall be reformed so that it will be valid,  legal
     and enforceable to the maximum extent possible.

                                        5
<PAGE>
13.  Governing  Law. This  Agreement  shall be governed and construed  under the
     --------------
     laws of the State of Minnesota and shall not be modified or discharged,  in
     whole or in part, except by an agreement in writing signed by the parties.

14.  Notices. All notices,  requests,  demands and other communications relating
     -------
     to this Agreement shall be in writing and shall be deemed to have been duly
     given if delivered  personally or mailed by certified or  registered  mail,
     return receipt  re-quested,  postage prepaid to the following addresses (or
     to such other address for a party as shall be specified by notice  pursuant
     hereto):

     If  to  Company,  to:    Pomeroy  Computer  Resources,  Inc.
                              1020  Petersburg  Road
                              Hebron,  Kentucky  41048

     With  a  copy  to:       James  H.  Smith  III,  Esq.
                              Lindhorst  &  Dreidame  Co.,  L.P.A.
                              312  Walnut  Street,  Suite  2300
                              Cincinnati,  Ohio  45202

     If  to  Employee, to:    the  Employee's  residential  address,  as
                              set  forth  in  the  Company's  records

     With  a  copy  to:       John  Watson,  Esq.
                              Siegel,  Brill, Greupner,  Duffy  &  Foster,  P.A.
                              1300  Washington  Square
                              100  Washington  Ave.  So.
                              Minneapolis,  Minnesota  55401

15.  Enforcement of Rights.  The parties expressly  recognize that any breach of
     ---------------------
     this Agreement by either party is likely to result in irrevocable injury to
     the other party and agree that such other party shall be entitled, if it so
     elects,  to institute and prosecute  proceedings  in any court of competent
     jurisdiction in Hennepin County, Minnesota,  either at law or in equity, to
     obtain damages for any breach of this Agreement, or to enforce the specific
     performance  of this  Agreement  by each  party or to enjoin any party from
     activities  in violation of this  Agreement.  Should either party engage in
     any activities prohibited by this Agreement,  such party agrees to pay over
     to the other party all  compensation,  remuneration,  monies or property of
     any sort received in connection  with such  activities.  Such payment shall
     not impair any rights or remedies of any non-breaching party or obligations
     or  liabilities  of any breaching  party  pursuant to this Agreement or any
     applicable law.

                                        6
<PAGE>
16.  Entire  Agreement.  This Agreement and the Purchase  Agreement  referred to
     -----------------
     herein contain the entire  understanding of the parties with respect to the
     subject matter contained  herein and may be altered,  amended or superseded
     only  by an  agreement  in  writing,  signed  by  the  party  against  whom
     enforcement of any waiver, change, modification,  extension or discharge is
     sought.

17.  Parties in Interest.
     --------------------

     (a)  This Agreement is personal to each of the parties hereto. No party may
          assign or delegate any rights or obligations  hereunder  without first
          obtaining  the written  consent of the other party  hereto;  provided,
          however,  that nothing in this Section 17 shall  preclude (i) Employee
          from   designating  a  beneficiary  to  receive  any  benefit  payable
          hereunder upon his death, or (ii) executors,  administrators, or legal
          representatives  of Employee or his estate from  assigning  any rights
          hereunder to person or persons entitled thereto.  Notwithstanding  the
          foregoing,  this  Agreement  shall be  binding  upon and  inure to the
          benefit of any successor corporation of Company

     (b)  The Company will require any successor (whether direct or indirect, by
          purchase, merger,  consolidation or otherwise) to all or substantially
          all of the assets of the Company or the business with respect to which
          the duties and  responsibilities of Employee are principally  related,
          to expressly  assume and agree to perform  this  Agreement in the same
          manner and to the same extent that Company would have been required to
          perform  it if no such  succession  had taken  place.  As used in this
          Agreement "Company" shall mean the Company as hereinbefore defined and
          any  successor  to its  business  and/or  assets  as  aforesaid  which
          executes and delivers the  assumption  agreement  provided for in this
          Section  17 or which  otherwise  becomes  bound by all the  terms  and
          provisions of this Agreement by operation of law.

18.  Representations  of Employee.  Employee  represents and warrants that he is
     -----------------------------
     not  party to or bound by any  agreement  or  contract  or  subject  to any
     restrictions  including  without  limitation  any  restriction  imposed  in
     connection with previous  employment which prevents  Employee from entering
     into and performing his obligations under this Agreement.

19.  Counterparts.  This  Agreement may be executed  simulta-neously  in several
     ------------
     counterparts,  each of which  shall  be  deemed  an  original  part,  which
     together shall constitute one and the same instrument.

                                        7
<PAGE>
IN  WITNESS  WHEREOF,  this Agreement has been executed effec-tive as of the day
and  year  first  above  written.

WITNESSES:                              COMPANY:
                                        POMEROY  COMPUTER  RESOURCES,  INC.
__________________________

__________________________          By:_________________________________
                                        Stephen  E.  Pomeroy
                                        Chief  Financial  Officer

                                   EMPLOYEE:
__________________________

__________________________             _________________________________
                                        Roar  Lund

                                        8
<PAGE>
                                                                         (jj)(3)

     AGREEMENT
--------------

This  Agreement made and entered into this _____ day of ______________, 2000, by
and  between  DATASOURCE  SYSTEMS  CORPORATION,  dba  DATASOURCE  HAGEN  and dba
DATASOURCE  SYSTEMS  MARKETING  CORPORATION, a Delaware corporation (hereinafter
referred  to  as  "Seller"),  and  POMEROY  COMPUTER RESOURCES, INC., a Delaware
corporation  (hereinafter  referred  to  as  "Purchaser").

                              W I T N E S S E T H :

WHEREAS,  Seller is a full-service provider of a variety of computer service and
support solutions, including installation, training, setup and consultation,  to
large  and medium size commercial, governmental and other professional customers
throughout  the  Minneapolis/St.  Paul,  Minnesota  Metropolitan  area;  and

WHEREAS,  simultaneously  with  the  execution  of  this  Agreement,  Seller and
Purchaser  have  entered  into  an  Asset  Purchase  Agreement  ("Asset Purchase
Agreement") whereby Seller has sold to Purchaser substantially all of the assets
of  Seller  relating to Seller's Business of marketing and selling a broad range
of  microcomputers  and  related  products  including  equipment  selection,
procurement  and  configuration;  and

WHEREAS,  the Purchaser would not have entered into the Asset Purchase Agreement
with  Seller  without  the  consent of Seller to enter into this Covenant Not to
Compete  Agreement;  and

WHEREAS, pursuant to Section 7.1 and Exhibit E of said Asset Purchase Agreement,
Seller  agreed  to  enter  into  this  Agreement.

NOW,  THEREFORE,  in  consideration  of the mutual promises and covenants herein
contained  and  in  consideration  of  the  execution  and  closing of the Asset
Purchase  Agreement,  the  parties  hereto  agree  as  follows:

1.   In  consideration of the payments to be made by Purchaser to Seller for its
     assets,  Seller  covenants  and agrees that for a period  equal to five (5)
     years from the closing of the Asset Purchase Agreement of even date, Seller
     will not,  or with any other  person,  corporation  or entity,  directly or
     indi-rectly,   by  stock  or  other  ownership,   investment,   management,
     employment or otherwise, or in any relation-ship whatsoever:

     (a)  Solicit,  divert or take away or  attempt to  solicit,  divert or take
          away,  any  of  the  business,  clients,  customers  or  patronage  of
          Purchaser  or any  affiliate  or  subsidiary  thereof  relating to the
          Business of Purchaser, as defined below; or

     (b)  Attempt to seek or cause any clients or  customers of Purchaser or any
          such  affiliate  or  subsidiary   relating  thereto  to  refrain  from
          continuing their patronage of the Business of Purchaser; or

<PAGE>
     (c)  Engage in the Business of Purchaser in any state in which Purchaser or
          its subsidiaries  has an office and conducts  Business during the term
          of this  Agreement.  A list of the states in which  Purchaser  and its
          subsidiaries currently transact business is attached hereto as Exhibit
          A; or

     (d)  Knowingly  employ or engage,  or  attempt to employ or engage,  in any
          capacity,  any person in the employ of the  Purchaser or any affiliate
          or subsidiary.

     (e)  Nothing  in this  Agreement  shall  prohibit  Seller  from  owning  or
          purchasing less than five percent (5%) of the outstanding stock of any
          publicly-traded  company  whose  stock is  traded on a  nationally  or
          regionally recognized stock exchange or is quoted on NASDAQ or the OTC
          bulletin board.

     (f)  Nothing in this Agreement shall prohibit Seller from being  affiliated
          with DS Capital,  LLC, a company engaged in the leasing business which
          is owned by Seller's Shareholder, solely for the purposes of servicing
          any  existing  leases of such  company as of the date  hereof,  or any
          renewal or extensions thereof for such equipment.  Seller acknowledges
          that any new  leasing  business  that may be  generated  from the date
          hereof  shall  be   originated   through   Purchaser's   wholly  owned
          subsidiary, Technology Integration Financial Services, Inc.

      For purposes of this Section, the "Business of Purchaser" shall  mean  any
      person, corporation,  partnership or other legal entity engaged,  directly
      or indirectly, through  subsidiaries  or  affiliates,  in  the   following
      line  of  business:

     (i)  Distributing of computer hardware,  software,  peripheral devices, and
          related  products and services to other entities or persons engaged in
          any  manner  in the  business  of the  distribution,  sale,  resale or
          servicing,  whether at the  wholesale or retail  level,  or leasing or
          renting, of computer hardware, software, peripheral devices or related
          products;

     (ii) Sale or  servicing,  whether  at the  wholesale  or retail  level,  or
          leasing or renting, of computer hardware, software, peripheral devices
          or related products;

     (iii)Sale,   servicing,    or   supporting   of   microcomputer   products,
          microcomputer  support  solutions and computer  integration  products,
          peripheral  devices and related  products  and the sale of  networking
          services; and

     (iv) Any other  business  activity which can reasonably be determined to be
          competitive with the principal  business  activity being engaged in by
          Purchaser or any of its subsidiaries.

                                        2
<PAGE>
     Notwithstanding  anything  herein  to  the  contrary,  the  "Business  of
Purchaser"  shall  only include business activity that is reasonably related to,
and  is  directly  competitive with, the business engaged in by Purchaser during
the  term  of  this  Agreement.

     Seller has carefully  read all the terms and conditions of this Paragraph 1
     and has given  careful  consideration  to the  covenants  and  restrictions
     imposed upon Seller herein,  and agrees that the same are necessary for the
     reasonable and proper protection of Seller's Business acquired by Purchaser
     and have been  separately  bargained for and agrees that Purchaser has been
     induced  to  enter  into  the  Asset   Purchase   Agree-ment  and  pay  the
     consideration  described  in Paragraph 2 by the  represen-tation  of Seller
     that  it  will  abide  by  and be  bound  by  each  of  the  covenants  and
     restrictions  herein;  and Seller  agrees  that  Purchaser  is  entitled to
     injunctive relief in the event of any breach of any covenant or restriction
     contained  herein in  addition  to all other  remedies  provided  by law or
     equity.  Seller  hereby  acknowledges  that  each  and  every  one of  said
     covenants  and  restrictions  is  reasonable  with  respect to the  subject
     matter, the length of time and geographic area embraced therein, and agrees
     that  irrespec-tive  of  when  or in  what  manner  this  agreement  may be
     terminated,  said covenants and restrictions  shall be operative during the
     full  period or periods  hereinbefore  mentioned  and  throughout  the area
     hereinbefore described.

     The parties  acknowledge that this Agreement,  which Agreement is ancillary
     to the main thrust of the Asset Purchase  Agreement,  is being entered into
     to protect the legitimate business interests of Purchaser,  including,  but
     not limited to, (i) trade secrets;  (ii) valuable  confidential business or
     professional  information that otherwise does not qualify as trade secrets;
     (iii)  substantial  relationships  with  specific  prospective  or existing
     customers or clients;  (iv) client or customer good will associated with an
     on-going  business  by way of trade name,  trademark,  or service  mark,  a
     specific  geographic  location,  or a specific marketing or trade area; and
     (v) extraordinary or specialized  training. In the event that any provision
     or  portion  of  Paragraph  1 shall  for any  reason  be  held  invalid  or
     unenforceable,  it is agreed that the same shall not affect the validity or
     enforceability of any other provision of Paragraph 1 of this Agreement, but
     the remaining  pro-visions of Paragraph 1 of this Agreement  shall continue
     in force and effect; and that if such invalidity or unenforceability is due
     to the  reason-ableness of the line of business,  time or geographical area
     covered by certain  covenants  and  restrictions  contained in Paragraph 1,
     said covenants and  restrictions  shall  nevertheless be effective for such
     line of business, period of time and for such area as may be deter-mined by
     arbitration or by a Court of competent jurisdiction to be reasonable.

2.   The  consideration for Seller's covenant not to compete shall be One Dollar
     ($1.00) and other valuable consideration,  including the consideration paid
     by the Purchaser to Seller pursuant to an Asset Purchase Agreement to which
     Seller and Purchaser are parties of even date herewith.

                                        3
<PAGE>
3.   The terms and conditions of this Agreement shall be binding upon the Seller
     and Purchaser, and their successors, heirs and assigns.

4.   This  Agreement  shall be construed in accordance  with and governed by the
     laws of the State of Minnesota.

IN  WITNESS WHEREOF, the parties hereto have executed this Agree-ment on the day
and  year  first  above  written.

                              SELLER:
                              ---------

                              DATASOURCE  SYSTEMS  CORPORATION,
                              dba  DATASOURCE  HAGEN  and  dba
                              DATASOURCE  SYSTEMS  MARKETING
                              CORPORATION

                              By:  __________________________________
                                    Roar  Lund,  President

                              PURCHASER:
                              ----------

                              POMEROY  COMPUTER  RESOURCES,  INC.

                              By:  ___________________________________
                                   Stephen  E.  Pomeroy, Chief Financial Officer

                                        4
<PAGE>
     EXHIBIT  A
----------------

                        STATES IN WHICH PURCHASER AND/OR
                       ITS SUBSIDIARIES TRANSACT BUSINESS

     1.           Alabama
     2.           Arkansas
     3.           California
     4.           Florida
     5.           Georgia
     6.           Indiana
     7.           Illinois
     8.           Iowa
     9.           Kentucky
     10.          Maryland
     11.          Massachusetts
     12.          Michigan
     13.          Minnesota
     14.          Mississippi
     15.          North  Carolina
     16.          Ohio
     17.          Oklahoma
     18.          Pennsylvania
     19.          South  Carolina
     20.          Tennessee
     21.          Texas
     22.          Virginia
     23.          West  Virginia

                                        5
<PAGE>
                                                                         (jj)(4)

     AGREEMENT
--------------

This  Agreement made and entered into this _____ day of ______________, 2000, by
and  between  DATASOURCE  SYSTEMS  CORPORATION,  dba  DATASOURCE  HAGEN  and dba
DATASOURCE  SYSTEMS  MARKETING  CORPORATION, a Delaware corporation (hereinafter
referred  to  as  "Seller"),  and  POMEROY SELECT INTEGRATION SOLUTIONS, INC., a
Delaware  corporation  (hereinafter  referred  to  as  "Purchaser").

                              W I T N E S S E T H :

WHEREAS,  Seller is a full-service provider of a variety of computer service and
support solutions, including installation, training, setup and consultation,  to
large  and medium size commercial, governmental and other professional customers
throughout  the  Minneapolis/St.  Paul,  Minnesota  Metropolitan  area;  and

WHEREAS,  simultaneously  with  the  execution  of  this  Agreement,  Seller and
Purchaser  have  entered  into  an  Asset  Purchase  Agreement  ("Asset Purchase
Agreement") whereby Seller has sold to Purchaser substantially all of the assets
of  Seller  relating to Seller's Business of marketing and selling a broad range
of  microcomputers  and  related  products  including  equipment  selection,
procurement  and  configuration;  and

WHEREAS,  the Purchaser would not have entered into the Asset Purchase Agreement
with  Seller  without  the  consent of Seller to enter into this Covenant Not to
Compete  Agreement;  and

WHEREAS,  pursuant  to  Section  7.1  and  Exhibit  E-1  of  said Asset Purchase
Agreement,  Seller  agreed  to  enter  into  this  Agreement.

NOW,  THEREFORE,  in  consideration  of the mutual promises and covenants herein
contained  and  in  consideration  of  the  execution  and  closing of the Asset
Purchase  Agreement,  the  parties  hereto  agree  as  follows:

1.   In  consideration of the payments to be made by Purchaser to Seller for its
     assets,  Seller  covenants  and agrees that for a period  equal to five (5)
     years from the closing of the Asset Purchase Agreement of even date, Seller
     will not,  or with any other  person,  corporation  or entity,  directly or
     indi-rectly,   by  stock  or  other  ownership,   investment,   management,
     employment or otherwise, or in any relation-ship whatsoever:

     (a)  Solicit,  divert or take away or  attempt to  solicit,  divert or take
          away,  any  of  the  business,  clients,  customers  or  patronage  of
          Purchaser  or any  affiliate  or  subsidiary  thereof  relating to the
          Business of Purchaser, as defined below; or

     (b)  Attempt to seek or cause any clients or  customers of Purchaser or any
          such  affiliate  or  subsidiary   relating  thereto  to  refrain  from
          continuing their patronage of the Business of Purchaser; or

<PAGE>
     (c)  Engage in the Business of Purchaser in any state in which Purchaser or
          its subsidiaries  has an office and conducts  Business during the term
          of this  Agreement.  A list of the states in which  Purchaser  and its
          subsidiaries currently transact business is attached hereto as Exhibit
          A; or

     (d)  Knowingly  employ or engage,  or  attempt to employ or engage,  in any
          capacity,  any person in the employ of the  Purchaser or any affiliate
          or subsidiary.

     (e)  Nothing  in this  Agreement  shall  prohibit  Seller  from  owning  or
          purchasing less than five percent (5%) of the outstanding stock of any
          publicly-traded  company  whose  stock is  traded on a  nationally  or
          regionally recognized stock exchange or is quoted on NASDAQ or the OTC
          bulletin board.

     (f)  Nothing in this Agreement shall prohibit Seller from being  affiliated
          with DS Capital,  LLC, a company engaged in the leasing business which
          is owned by Seller's Shareholder, solely for the purposes of servicing
          any  existing  leases of such  company as of the date  hereof,  or any
          renewals or extensions thereof for such equipment.  Owner acknowledges
          that any new  leasing  business  that may be  generated  from the date
          hereof shall be originated through Purchaser's  affiliate,  Technology
          Integration Financial Services, Inc.

     For purposes of this Section,  the  "Business of Purchaser"  shall mean any
     person, corporation, partnership or other legal entity engaged, directly or
     indirectly,  through  subsidiaries or affiliates,  in the following line of
     business:

     (i)  Distributing of computer hardware,  software,  peripheral devices, and
          related  products and services to other entities or persons engaged in
          any  manner  in the  business  of the  distribution,  sale,  resale or
          servicing,  whether at the  wholesale or retail  level,  or leasing or
          renting, of computer hardware, software, peripheral devices or related
          products;

     (ii) Sale or  servicing,  whether  at the  wholesale  or retail  level,  or
          leasing or renting, of computer hardware, software, peripheral devices
          or related products;

     (iii)Sale,   servicing,    or   supporting   of   microcomputer   products,
          microcomputer  support  solutions and computer  integration  products,
          peripheral  devices and related  products  and the sale of  networking
          services; and

                                        2
<PAGE>
     (iv) Any other  business  activity which can reasonably be determined to be
          competitive with the principal  business  activity being engaged in by
          Purchaser or any of its subsidiaries.

     Notwithstanding  anything  herein  to  the  contrary,  the  "Business  of
Purchaser"  shall  only include business activity that is reasonably related to,
and  is  directly  competitive with, the business engaged in by Purchaser during
the  term  of  this  Agreement.

     Seller has carefully  read all the terms and conditions of this Paragraph 1
     and has given  careful  consideration  to the  covenants  and  restrictions
     imposed upon Seller herein,  and agrees that the same are necessary for the
     reasonable and proper protection of Seller's Business acquired by Purchaser
     and have been  separately  bargained for and agrees that Purchaser has been
     induced  to  enter  into  the  Asset   Purchase   Agree-ment  and  pay  the
     consideration  described  in Paragraph 2 by the  represen-tation  of Seller
     that  it  will  abide  by  and be  bound  by  each  of  the  covenants  and
     restrictions  herein;  and Seller  agrees  that  Purchaser  is  entitled to
     injunctive relief in the event of any breach of any covenant or restriction
     contained  herein in  addition  to all other  remedies  provided  by law or
     equity.  Seller  hereby  acknowledges  that  each  and  every  one of  said
     covenants  and  restrictions  is  reasonable  with  respect to the  subject
     matter, the length of time and geographic area embraced therein, and agrees
     that  irrespec-tive  of  when  or in  what  manner  this  agreement  may be
     terminated,  said covenants and restrictions  shall be operative during the
     full  period or periods  hereinbefore  mentioned  and  throughout  the area
     hereinbefore described.

     The parties  acknowledge that this Agreement,  which Agreement is ancillary
     to the main thrust of the Asset Purchase  Agreement,  is being entered into
     to protect the legitimate business interests of Purchaser,  including,  but
     not limited to, (i) trade secrets;  (ii) valuable  confidential business or
     professional  information that otherwise does not qualify as trade secrets;
     (iii)  substantial  relationships  with  specific  prospective  or existing
     customers or clients;  (iv) client or customer good will associated with an
     on-going  business  by way of trade name,  trademark,  or service  mark,  a
     specific  geographic  location,  or a specific marketing or trade area; and
     (v) extraordinary or specialized  training. In the event that any provision
     or  portion  of  Paragraph  1 shall  for any  reason  be  held  invalid  or
     unenforceable,  it is agreed that the same shall not affect the validity or
     enforceability of any other provision of Paragraph 1 of this Agreement, but
     the remaining  pro-visions of Paragraph 1 of this Agreement  shall continue
     in force and effect; and that if such invalidity or unenforceability is due
     to the  reason-ableness of the line of business,  time or geographical area
     covered by certain  covenants  and  restrictions  contained in Paragraph 1,
     said covenants and  restrictions  shall  nevertheless be effective for such
     line of business, period of time and for such area as may be deter-mined by
     arbitration or by a Court of competent jurisdiction to be reasonable.

                                        3
<PAGE>
2.   The  consideration for Seller's covenant not to compete shall be One Dollar
     ($1.00) and other valuable consideration,  including the consideration paid
     by the Purchaser to Seller pursuant to an Asset Purchase Agreement to which
     Seller and Purchaser are parties of even date herewith.

3.   The terms and conditions of this Agreement shall be binding upon the Seller
     and Purchaser, and their successors, heirs and assigns.

4.   This  Agreement  shall be construed in accordance  with and governed by the
     laws of the State of Minnesota.

IN  WITNESS WHEREOF, the parties hereto have executed this Agree-ment on the day
and  year  first  above  written.

                              SELLER:
                              --------

                              DATASOURCE  SYSTEMS  CORPORATION,
                              dba  DATASOURCE  HAGEN  and  dba
                              DATASOURCE  SYSTEMS  MARKETING
                              CORPORATION

                              By:  __________________________________
                                    Roar  Lund,  President

                              PURCHASER:
                              ------------

                              POMEROY  SELECT  INTEGRATION
                              SOLUTIONS,  INC.

                              By:  ___________________________________
                                   Stephen  E.  Pomeroy,  President

                                        4
<PAGE>

     EXHIBIT  A
----------------

                            STATES IN WHICH PURCHASER
                          AND/OR ITS PARENT CORPORATION
                          AND/OR SUBSIDIARIES OR OTHER
                          AFFILIATES TRANSACT BUSINESS

     1.          Alabama
     2.          Arkansas
     3.          California
     4.          Florida
     5.          Georgia
     6.          Indiana
     7.          Illinois
     8.          Iowa
     9.          Kentucky
     10.         Maryland
     11.         Massachusetts
     12.         Michigan
     13.         Minnesota
     14.         Mississippi
     15.         North  Carolina
     16.         Ohio
     17.         Oklahoma
     18.         Pennsylvania
     19.         South  Carolina
     20.         Tennessee
     21.         Texas
     22.         Virginia
     23.         West  Virginia

                                        5
<PAGE>
                                                                         (jj)(5)

     AGREEMENT
--------------

This Agreement made and entered into this _____ day of ___________, 2000, by and
between  ROAR  LUND  (hereinafter  referred  to as "Owner") and POMEROY COMPUTER
RESOURCES,  INC.,  a  Delaware  corporation  (hereinafter  referred  to  as
"Purchaser").

                              W I T N E S S E T H :

WHEREAS, simultaneously with the execution of this Agreement,  Purchaser entered
into  an  Asset  Purchase Agreement ("Asset Purchase Agreement") with DATASOURCE
SYSTEMS  CORPORATION,  dba DATASOURCE HAGEN and dba DATASOURCE SYSTEMS MARKETING
CORPORATION,  a Delaware corporation ("Company"), for the acquisition of certain
of  its  assets  (the  "Business");  and

WHEREAS,  Owner  owns  One  Hundred  Percent  (100%) of the outstanding stock of
Company;  and

WHEREAS, Purchaser would not have entered into the Asset Purchase Agreement with
Company  without the consent of Owner to enter into this covenant not to compete
agreement;  and

WHEREAS,  pursuant  to  Section  7.1  and  Exhibit  E-2  of  said Asset Purchase
Agreement,  Owner  agreed  to  enter  into  this  Agreement.

NOW,  THEREFORE,  in  consideration  of the mutual promises and covenants herein
contained  and  in  consideration  of  the  execution  and  closing of the Asset
Purchase  Agreement,  the  parties  hereto  agree  as  follows:

1.   As an inducement for Purchaser to enter into the Asset  Purchase  Agreement
     with  Company  (100% of the  stock of  which  is  owned  by  Owner),  Owner
     covenants and agrees that for a period equal to the later of five (5) years
     from the closing of the Asset  Purchase  Agreement  of even date or one (1)
     year after the termination of Owner's employment with Purchaser pursuant to
     the terms of an Employment  Agreement of even date, Owner will not, or with
     any other person, corporation or entity, directly or indi-rectly,  by stock
     or other ownership, investment,  management, employment or otherwise, or in
     any relation-ship whatsoever:

     (a)  Solicit,  divert or take away or  attempt to  solicit,  divert or take
          away,  any  of  the  business,  clients,  customers  or  patronage  of
          Purchaser  or any  affiliate  or  subsidiary  thereof  relating to the
          Business of Purchaser, as defined below; or

<PAGE>
     (b)  Attempt to seek or cause any clients or  customers of Purchaser or any
          such  affiliate  or  subsidiary   relating  thereto  to  refrain  from
          continuing their patronage of the Business of Purchaser; or

                                        2
<PAGE>
     (c)  Engage in the Business of Purchaser in any state in which Purchaser or
          its subsidiaries  has an office and conducts  Business during the term
          of this  Agreement.  A list of the states in which  Purchaser  and its
          subsidiaries currently transact business is attached hereto as Exhibit
          A; or

     (d)  Knowingly  employ or engage,  or  attempt to employ or engage,  in any
          capacity,  any person in the employ of the  Purchaser or any affiliate
          or subsidiary.

     (e)  Nothing  in  this  Agreement  shall  prohibit  Owner  from  owning  or
          purchasing less than five percent (5%) of the outstanding stock of any
          publicly-traded  company  whose  stock is  traded on a  nationally  or
          regionally recognized stock exchange or is quoted on NASDAQ or the OTC
          bulletin board.

     (f)  Nothing  in  this  Agreement  shall  prohibit  Owner  from  owning  or
          purchasing any stock,  or serving as an officer,  director or employee
          of DS Capital,  LLC, a  corporation  engaged in the  leasing  business
          solely for the  purposes  of  servicing  any  existing  leases of such
          company as of the date hereof,  or any renewals or extensions  thereof
          for such equipment.  Owner  acknowledges that any new leasing business
          that may be generated from the date hereof shall be originated through
          Purchaser's wholly owned subsidiary,  Technology Integration Financial
          Services,  Inc.  Nothing in this  Agreement  shall prohibit Owner from
          owning 25% of the outstanding stock of Electronic Media Group, Inc., a
          web development company.

     For purposes of this Section,  the  "Business of Purchaser"  shall mean any
     person, corporation, partnership or other legal entity engaged, directly or
     indirectly,  through  subsidiaries or affiliates,  in the following line of
     business:

     (i)  Distributing of computer hardware,  software,  peripheral devices, and
          related  products and services to other entities or persons engaged in
          any  manner  in the  business  of the  distribution,  sale,  resale or
          servicing,  whether at the  wholesale or retail  level,  or leasing or
          renting, of computer hardware, software, peripheral devices or related
          products;

     (ii) Sale or  servicing,  whether  at the  wholesale  or retail  level,  or
          leasing or renting, of computer hardware, software, peripheral devices
          or related products;

     (iii)Sale,   servicing  or   supporting  of   microcomputer   products  and
          microcomputer  support  solutions and computer  integration  products,
          peripheral  devices and related  products,  and the sale of networking
          services; and

                                        3
<PAGE>
     (iv) Any other  business  activity which can reasonably be determined to be
          competitive with the principal  business  activity being engaged in by
          Purchaser or any of its subsidiaries.

     Notwithstanding  anything  herein  to  the  contrary,  the  "Business  of
Purchaser"  shall  only include business activity that is reasonably related to,
and  is  directly  competitive with, the business engaged in by Purchaser during
the  term  of  this  Agreement.

     Owner has carefully  read all the terms and  conditions of this Paragraph 1
     and has given  careful  consideration  to the  covenants  and  restrictions
     imposed upon Owner  herein,  and agrees that the same are necessary for the
     reasonable and proper  protection of Owner's Business acquired by Purchaser
     and have been  separately  bargained for and agrees that Purchaser has been
     induced  to  enter  into  the  Asset   Purchase   Agree-ment  and  pay  the
     consideration described in Paragraph 2 by the represen-tation of Owner that
     he will  abide by and be bound by each of the  covenants  and  restrictions
     herein; and Owner agrees that Purchaser is entitled to injunctive relief in
     the event of any breach of any covenant or restriction  contained herein in
     addition  to all other  remedies  provided by law or equity.  Owner  hereby
     acknowledges  that each and every one of said covenants and restrictions is
     reasonable  with  respect  to the  subject  matter,  the length of time and
     geographic area embraced therein,  and agrees that irrespec-tive of when or
     in what  manner  this  agreement  may be  terminated,  said  covenants  and
     restrictions   shall  be  operative  during  the  full  period  or  periods
     hereinbefore mentioned and throughout the area hereinbefore described.

     The parties  acknowledge that this Agreement,  which Agreement is ancillary
     to the main thrust of the Asset Purchase  Agreement,  is being entered into
     to protect the legitimate business interests of Purchaser,  including,  but
     not limited to, (i) trade secrets;  (ii) valuable  confidential business or
     professional  information that otherwise does not qualify as trade secrets;
     (iii)  substantial  relationships  with  specific  prospective  or existing
     customers or clients;  (iv) client or customer good will associated with an
     on-going  business  by way of trade name,  trademark,  or service  mark,  a
     specific  geographic  location,  or a specific marketing or trade area; and
     (v) extraordinary or specialized  training. In the event that any provision
     or  portion  of  Paragraph  1 shall  for any  reason  be  held  invalid  or
     unenforceable,  it is agreed that the same shall not affect the validity or
     enforceability of any other provision of Paragraph 1 of this Agreement, but
     the remaining  pro-visions of Paragraph 1 of this Agreement  shall continue
     in force and effect; and that if such invalidity or unenforceability is due
     to the  reason-ableness of the line of business,  time or geographical area
     covered by certain  covenants  and  restrictions  contained in Paragraph 1,
     said covenants and  restrictions  shall  nevertheless be effective for such
     line of business, period of time and for such area as may be deter-mined by
     arbitration or by a Court of competent jurisdiction to be reasonable.

                                        4
<PAGE>
2.   The  consideration  for Owner's covenant not to compete shall be One Dollar
     ($1.00) and other valuable consideration,  including the consideration paid
     by the  Purchaser  to Company  pursuant to an Asset  Purchase  Agreement to
     which Owner is a party of even date herewith.

3.   The terms and conditions of this Agreement  shall be binding upon the Owner
     and Purchaser, and their successors, heirs and assigns.

4.   This  Agreement  shall be construed in accordance  with and governed by the
     laws of the State of Minnesota.

IN  WITNESS WHEREOF, the parties hereto have executed this Agree-ment on the day
and  year  first  above  written.

                              __________________________________
                              ROAR  LUND

                              POMEROY  COMPUTER  RESOURCES  ,  INC.

                              By:________________________________
                                   STEPHEN  E.  POMEROY
                                   Chief  Financial  Officer

                                        5
<PAGE>
     EXHIBIT  A
----------------

                        STATES IN WHICH PURCHASER AND/OR
                       ITS SUBSIDIARIES TRANSACT BUSINESS

     1.           Alabama
     2.           Arkansas
     3.           California
     4.           Florida
     5.           Georgia
     6.           Indiana
     7.           Illinois
     8.           Iowa
     9.           Kentucky
     10.          Maryland
     11.          Massachusetts
     12.          Michigan
     13.          Minnesota
     14.          Mississippi
     15.          North  Carolina
     16.          Ohio
     17.          Oklahoma
     18.          Pennsylvania
     19.          South  Carolina
     20.          Tennessee
     21.          Texas
     22.          Virginia
     23.          West  Virginia

                                        6
<PAGE>
                                                                         (jj)(6)

     AGREEMENT
--------------

This Agreement made and entered into this _____ day of ___________, 2000, by and
between  ROAR  LUND  (hereinafter  referred  to  as  "Owner") and POMEROY SELECT
INTEGRATION  SOLUTIONS, INC., a Delaware corporation (hereinafter referred to as
"Purchaser").

                              W I T N E S S E T H :

WHEREAS, simultaneously with the execution of this Agreement,  Purchaser entered
into  an  Asset  Purchase Agreement ("Asset Purchase Agreement") with DATASOURCE
SYSTEMS  CORPORATION,  dba DATASOURCE HAGEN and dba DATASOURCE SYSTEMS MARKETING
CORPORATION,  a Delaware corporation ("Company"), for the acquisition of certain
of  its  assets  (the  "Business");  and

WHEREAS,  Owner  owns  One  Hundred  Percent  (100%) of the outstanding stock of
Company;  and

WHEREAS, Purchaser would not have entered into the Asset Purchase Agreement with
Company  without the consent of Owner to enter into this covenant not to compete
agreement;  and

WHEREAS,  pursuant  to  Section  7.1  and  Exhibit  E-3  of  said Asset Purchase
Agreement,  Owner  agreed  to  enter  into  this  Agreement.

NOW,  THEREFORE,  in  consideration  of the mutual promises and covenants herein
contained  and  in  consideration  of  the  execution  and  closing of the Asset
Purchase  Agreement,  the  parties  hereto  agree  as  follows:

1.   As an inducement for Purchaser to enter into the Asset  Purchase  Agreement
     with  Company  (100% of the  stock of  which  is  owned  by  Owner),  Owner
     covenants and agrees that for a period equal to the later of five (5) years
     from the closing of the Asset  Purchase  Agreement  of even date or one (1)
     year after the termination of Owner's employment with Purchaser pursuant to
     the terms of an Employment  Agreement of even date, Owner will not, or with
     any other person, corporation or entity, directly or indi-rectly,  by stock
     or other ownership, investment,  management, employment or otherwise, or in
     any relation-ship whatsoever:

     (a)  Solicit,  divert or take away or  attempt to  solicit,  divert or take
          away,  any  of  the  business,  clients,  customers  or  patronage  of
          Purchaser  or any  affiliate  or  subsidiary  thereof  relating to the
          Business of Purchaser, as defined below; or

<PAGE>
     (b)  Attempt to seek or cause any clients or  customers of Purchaser or any
          such  affiliate  or  subsidiary   relating  thereto  to  refrain  from
          continuing their patronage of the Business of Purchaser; or

                                        2
<PAGE>
     (c)  Engage in the Business of Purchaser in any state in which Purchaser or
          its subsidiaries  has an office and conducts  Business during the term
          of this  Agreement.  A list of the states in which  Purchaser  and its
          subsidiaries currently transact business is attached hereto as Exhibit
          A; or

     (d)  Knowingly  employ or engage,  or  attempt to employ or engage,  in any
          capacity,  any person in the employ of the  Purchaser or any affiliate
          or subsidiary.

     (e)  Nothing  in  this  Agreement  shall  prohibit  Owner  from  owning  or
          purchasing less than five percent (5%) of the outstanding stock of any
          publicly-traded  company  whose  stock is  traded on a  nationally  or
          regionally recognized stock exchange or is quoted on NASDAQ or the OTC
          bulletin board.

     (f)  Nothing  in  this  Agreement  shall  prohibit  Owner  from  owning  or
          purchasing any stock,  or serving as an officer,  director or employee
          of DS Capital,  LLC, a  corporation  engaged in the  leasing  business
          solely for the  purposes  of  servicing  any  existing  leases of such
          company as of the date hereof,  or any renewals or extensions  thereof
          for such equipment.  Owner  acknowledges that any new leasing business
          that may be generated from the date hereof shall be originated through
          Purchaser's affiliate, Technology Integration Financial Services, Inc.
          Nothing in this Agreement  shall prohibit Owner from owning 25% of the
          outstanding  stock of Electronic Media Group,  Inc., a web development
          company.

     For purposes of this Section,  the  "Business of Purchaser"  shall mean any
     person, corporation, partnership or other legal entity engaged, directly or
     indirectly,  through  subsidiaries or affiliates,  in the following line of
     business:

     (i)  Distributing of computer hardware,  software,  peripheral devices, and
          related  products and services to other entities or persons engaged in
          any  manner  in the  business  of the  distribution,  sale,  resale or
          servicing,  whether at the  wholesale or retail  level,  or leasing or
          renting, of computer hardware, software, peripheral devices or related
          products;

     (ii) Sale or  servicing,  whether  at the  wholesale  or retail  level,  or
          leasing or renting, of computer hardware, software, peripheral devices
          or related products;

     (iii)Sale,   servicing  or   supporting  of   microcomputer   products  and
          microcomputer  support  solutions and computer  integration  products,
          peripheral  devices and related  products,  and the sale of networking
          services; and

                                        3
<PAGE>
     (iv) Any other  business  activity which can reasonably be determined to be
          competitive with the principal  business  activity being engaged in by
          Purchaser or any of its subsidiaries.

     Notwithstanding  anything  herein  to  the  contrary,  the  "Business  of
Purchaser"  shall  only include business activity that is reasonably related to,
and  is  directly  competitive with, the business engaged in by Purchaser during
the  term  of  this  Agreement.

     Owner has carefully  read all the terms and  conditions of this Paragraph 1
     and has given  careful  consideration  to the  covenants  and  restrictions
     imposed upon Owner  herein,  and agrees that the same are necessary for the
     reasonable and proper  protection of Owner's Business acquired by Purchaser
     and have been  separately  bargained for and agrees that Purchaser has been
     induced  to  enter  into  the  Asset   Purchase   Agree-ment  and  pay  the
     consideration described in Paragraph 2 by the represen-tation of Owner that
     he will  abide by and be bound by each of the  covenants  and  restrictions
     herein; and Owner agrees that Purchaser is entitled to injunctive relief in
     the event of any breach of any covenant or restriction  contained herein in
     addition  to all other  remedies  provided by law or equity.  Owner  hereby
     acknowledges  that each and every one of said covenants and restrictions is
     reasonable  with  respect  to the  subject  matter,  the length of time and
     geographic area embraced therein,  and agrees that irrespec-tive of when or
     in what  manner  this  agreement  may be  terminated,  said  covenants  and
     restrictions   shall  be  operative  during  the  full  period  or  periods
     hereinbefore mentioned and throughout the area hereinbefore described.

     The parties  acknowledge that this Agreement,  which Agreement is ancillary
     to the main thrust of the Asset Purchase  Agreement,  is being entered into
     to protect the legitimate business interests of Purchaser,  including,  but
     not limited to, (i) trade secrets;  (ii) valuable  confidential business or
     professional  information that otherwise does not qualify as trade secrets;
     (iii)  substantial  relationships  with  specific  prospective  or existing
     customers or clients;  (iv) client or customer good will associated with an
     on-going  business  by way of trade name,  trademark,  or service  mark,  a
     specific  geographic  location,  or a specific marketing or trade area; and
     (v) extraordinary or specialized  training. In the event that any provision
     or  portion  of  Paragraph  1 shall  for any  reason  be  held  invalid  or
     unenforceable,  it is agreed that the same shall not affect the validity or
     enforceability of any other provision of Paragraph 1 of this Agreement, but
     the remaining  pro-visions of Paragraph 1 of this Agreement  shall continue
     in force and effect; and that if such invalidity or unenforceability is due
     to the  reason-ableness of the line of business,  time or geographical area
     covered by certain  covenants  and  restrictions  contained in Paragraph 1,
     said covenants and  restrictions  shall  nevertheless be effective for such
     line of business, period of time and for such area as may be deter-mined by
     arbitration or by a Court of competent jurisdiction to be reasonable.

                                        4
<PAGE>
2.   The  consideration  for Owner's covenant not to compete shall be One Dollar
     ($1.00) and other valuable consideration,  including the consideration paid
     by the  Purchaser  to Company  pursuant to an Asset  Purchase  Agreement to
     which Owner is a party of even date herewith.

3.   The terms and conditions of this Agreement  shall be binding upon the Owner
     and Purchaser, and their successors, heirs and assigns.

4.   This  Agreement  shall be construed in accordance  with and governed by the
     laws of the State of Minnesota.

IN  WITNESS WHEREOF, the parties hereto have executed this Agree-ment on the day
and  year  first  above  written.

                              __________________________________
                              ROAR  LUND

                              POMEROY  SELECT  INTEGRATION
                              SOLUTIONS,  INC.

                              By:________________________________
                                   STEPHEN  E.  POMEROY
                                   President

                                        5
<PAGE>
     EXHIBIT  A
---------------

                           STATES IN WHICH PURCHASER
                          AND/OR ITS PARENT  COMPANIES
                         AND/OR  SUBSIDIARIES  OR  OTHER
                          AFFILIATES TRANSACT BUSINESS

     1.          Alabama
     2.          Arkansas
     3.          California
     4.          Florida
     5.          Georgia
     6.          Indiana
     7.          Illinois
     8.          Iowa
     9.          Kentucky
     10.         Maryland
     11.         Massachusetts
     12.         Michigan
     13.         Minnesota
     14.         Mississippi
     15.         North  Carolina
     16.         Ohio
     17.         Oklahoma
     18.         Pennsylvania
     19.         South  Carolina
     20.         Tennessee
     21.         Texas
     22.         Virginia
     23.         West  Virginia

                                        6
<PAGE>EXHIBIT 10.21

                      OLYMPIC CASCADE FINANCIAL CORPORATION

                              EMPLOYMENT AGREEMENT

         This Employment  Agreement  ("Agreement") is made and entered into this
12TH day of June, 2000, by and between OLYMPIC CASCADE FINANCIAL CORPORATION,  a
Delaware  corporation  (the  "Company"),  and  MARK  GOLDWASSER,  an  individual
("Executive").

                                    RECITALS

         A.    The Company desires to be assured of the association and services
          of Executive for the Company.

         B.    Executive  is willing and desires to be employed by the  Company,
          and the  Company  is  willing  to employ  Executive,  upon the  terms,
          covenants and conditions hereinafter set forth.

                                    AGREEMENT

         NOW,  THEREFORE,  in consideration  of the mutual terms,  covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:

1.  EMPLOYMENT.  The Company  hereby employs  Executive as "Managing  Director",
subject to the  supervision  and  direction  of the  Company's  Chief  Executive
Officer and Board of Directors. The Company anticipates that within 90 days from
the date of this Agreement,  Executive will be elected President of the Company.
Upon such election,  Executive's  employment  shall continue under the terms and
conditions of this Agreement.

2. TERM. The term  of  this  Agreement  shall be for a period of three (3) years
commencing on the date hereof,  unless terminated  earlier pursuant to Section 6
below.

3.       COMPENSATION: REIMBURSEMENT.
         ---------------------------

3.1 BASE SALARY.  For all services  rendered by Executive  under this Agreement,
and  commencing  June 12, 2000,  the Company  shall pay  Executive a base salary
("Base  Salary") of $400,000 per annum.  The Base Salary is subject to increases
from time to time at the discretion of the Board of Directors of the Company.

3.2  ADDITIONAL  BENEFITS.  In addition to the Base Salary,  Executive  shall be
entitled to all other  benefits of employment  now or hereafter  provided to the
other  executives  of the Company,  its  operating  divisions  or  subsidiaries,
including but not limited to individual  health  insurance,  life  insurance and
on-premises parking. Executive shall be based in the City of New York in offices
to be established for him by the Company.

3.3 BONUSES.  It is  contemplated  that from time to time Executive will be paid
bonuses based upon the Company's and Executive's performance.

<PAGE>

3.4 OPTIONS.  Executive shall be granted an option to purchase 150,000 shares of
common stock of the Company at an exercise  price equal to the closing price for
such stock on or near the effective date of this  Agreement.  Such options shall
be 100%  vested upon the  effective  date of this  Agreement.  In the event that
Executive's  employment  terminates,  his rights with  respect to these  options
shall be governed by the Company's 2000 Stock Option Plan.

3.5      CONTINUING  OBLIGATIONS.  All of the Company's compensation obligations
under this paragraph shall continue through the term of this Agreement.

3.6   REIMBURSEMENT.   Executive   shall  be  reimbursed   for  all   reasonable
out-of-pocket  business expenses for business travel and business  entertainment
incurred in connection  with the performance of his duties under this Agreement.
The  reimbursement  of  Executive's  business  expenses  shall  be  upon  weekly
presentation  to and  approval  by the  Company  of  valid  receipts  and  other
appropriate documentation for such expenses.

4.       SCOPE OF DUTIES.
         ---------------

4.1 ASSIGNMENT OF DUTIES. Executive shall have such duties as may be assigned to
him from time to time by the Company's Board of Directors  commensurate with his
experience  and  responsibilities  in the  position  for  which  he is  employed
pursuant  to Section 1 above.  Such  duties  shall be  exercised  subject to the
control and supervision of the Board of Directors of the Company.

4.2  EXECUTIVE'S  DEVOTION  OF TIME.  Executive  hereby  agrees  to  devote  his
professional full time,  abilities and energy to the faithful performance of the
duties  assigned to him and to the  promotion  and  forwarding  of the  business
affairs of the Company,  and not to divert any business  opportunities  from the
Company to himself or to any other person or business entity. Executive shall be
entitled to not less than four (4) weeks of paid  vacation and not less than two
(2) weeks of paid sick leave during each fiscal year of the Company.

4.3 CONFLICTING ACTIVITIES.  For the term of this Agreement or until Executive's
employment hereunder terminates, whichever occurs first, Executive hereby agrees
to promote and develop all  business  opportunities  that come to his  attention
relating to current or anticipated  future business of the Company,  in a manner
consistent  with the best interest of the Company and with his duties under this
Agreement.  If  Executive  becomes  aware of a business  opportunity  during the
performance of his Company duties,  through the use of the Company's property or
information,  or under  circumstances  that would  reasonably  lead Executive to
believe that the business  opportunity was intended by the offeror to be offered
to the Company, he shall first offer such opportunity to the Company. Should the
Chief Executive Officer of the Company,  on behalf of the Company,  not exercise
its right to pursue this  business  opportunity  within a  reasonable  period of
time,  not to exceed  thirty  (30) days,  Executive  may  develop  the  business
opportunity for himself; provided,  however, that such development may in no way
conflict or interfere  with the duties owed by  Executive  to the Company  under
this Agreement.  Further, Executive may develop such business opportunities only
on his own time, and may not use any service,  personnel,  equipment,  supplies,
facility, or trade secrets of the Company in their development.  As used herein,
the  term  "business  opportunity"  shall  not  include  business  opportunities
involving  investment in publicly traded stocks,  bonds or other securities,  or
other investments of a personal nature.

                                       2

<PAGE>

5.  CONFIDENTIALITY  OF TRADE  SECRETS  AND OTHER  MATERIALS.  Other than in the
performance of his duties  hereunder,  Executive agrees not to disclose,  either
during the term of his employment by the Company or at any time  thereafter,  to
any person, firm or corporation any information concerning the business affairs,
the trade secrets or the customer  lists or similar  information of the Company.
Any technique,  method, process, technology or customer compilation or list used
by the Company  shall be  considered  a "trade  secret" for the purposes of this
Agreement.  Notwithstanding  the  foregoing,  the names  and  other  information
relating to the retail  brokerage  customers of Executive who have been assigned
Executive's A/E number shall not be considered as "confidential information" for
purposes of this Section 5 or any other provision of this Agreement.

6.  SEVERANCE.  So long as this  Agreement  is in effect,  in the event that the
Company terminates  Executive's employment under any circumstances not specified
as a basis for  termination  in Section 7.1  hereof,  Executive  or  Executive's
designees or heirs shall be entitled to 12 equal monthly  payments  equal in the
aggregate  to one  year of  Executive's  Base  Salary  as then  in  effect  (the
"Severance Payment").

7.       TERMINATION.
         -----------

7.1      BASES FOR TERMINATION.
         ---------------------

          (a) Executive's  employment hereunder may be terminated at any time by
          mutual agreement of the parties.

          (b) Executive's employment hereunder shall automatically  terminate on
          the  last  day of the  month in which  Executive  dies.  If  Executive
          becomes  permanently  disabled and is unable to perform the  essential
          duties  defined in paragraph 4 hereof (the  "Duties")  with or without
          accommodation,   then   Executive's   employment   hereunder   may  be
          terminated. "Permanent disability" as used herein shall mean mental or
          physical disability or both, evidenced by:

               (i) a consecutive six month period of time during which Executive
          is unable to perform the Duties with or without accommodation; and

               (ii) medical  documentation from Executive's  attending physician
          or a duly  licensed  independent  physician  selected by the Company's
          Board of  Directors,  stating  that  Executive  is  physically  and/or
          mentally disabled from performing the essential Duties with or without
          accommodation  and that the disabling  condition is permanent and will
          not substantially change or improve.

          (c) Executive may  terminate  his  employment  hereunder by giving the
          Company 60 days  prior  written  notice,  which  termination  shall be
          effective on the 60th day following such notice.

                                       3
<PAGE>

          (d)  Executive's  employment  may  not be  terminated  by the  Company
          against his will without a finding,  by an  impartial  third person or
          panel, of fraud, theft or defalcation.

          (e) Executive's  employment hereunder may be terminated by the Company
          or by  Executive  at any  time  within  ninety  (90)  days  after  the
          occurrence  of a Change  in  Control  (as  defined  below).  Upon such
          termination:

               (i) the Company  shall pay to Executive as a lump-sum  payment an
          amount  equal to two (2) years'  Base  Salary in effect at the time of
          termination;

               (ii) the Company shall provide  Executive with a continuation  of
          health  insurance   coverage,   existing  office  space  and  existing
          secretarial  and  telephone  services,  in each  case for a period  of
          eighteen (18) months after the date of termination; and

               (iii) all stock options issued by the Company to Executive  shall
          immediately  vest and become  exercisable for a period of at least two
          (2) years after the date of termination, notwithstanding any provision
          to the  contrary in the  Company's  stock  option plan or in any stock
          option agreement between the Company and Executive.

For purposes of this Agreement,  a "Change in Control" shall mean the occurrence
of any of the following events:

               (x) the  acquisition by any  individual,  entity or group (within
               the meaning of Section  13(d)(3)  or  14(d)(2) of the  Securities
               Exchange   Act  of  1934,   as  amended  (the   "Exchange   Act")
               (collectively,  a "person") of Beneficial ownership (as such term
               is defined in Rule 13d-3  promulgated  under the  Exchange  Act),
               directly or indirectly,  of twenty-five  percent (25%) or more of
               the then  outstanding  shares of common  stock of the  Company or
               National Securities Corporation  (collectively,  the "Outstanding
               Common Stock");  provided,  however, that the following shall not
               constitute  a  Change  of  Control:  (i)  any  acquisition  by an
               Underwriter  (as such term is  defined  in  Section  2(11) of the
               Securities  Act of 1933,  as amended) for the purpose of making a
               public offering;  or (ii) any acquisition by any employee benefit
               plan (or related trust) sponsored or maintained by the Company or
               National Securities  Corporation or any corporation controlled by
               the Company or National Securities Corporation;

               (y) the sale or  liquidation of all or  substantially  all of the
               assets of the Company or National Securities Corporation; or

                                       4
<PAGE>

               (z) any  transaction  or series of  transactions  which result in
               Steven A. Rothstein  directly or indirectly  owning less than ten
               percent (10%) of the Outstanding Common Stock.

          (f)  Notwithstanding  anything  contained  herein,  or  in  any  other
          agreement   between  the  Company   and   Executive,   or  benefit  or
          compensation  plan  under  which the  Executive  participates,  to the
          contrary,  in the event  that any  amounts  due  Executive  under this
          Section  7.1,  or under any other plan or  program  of the  Company or
          other  agreement   between  the  Company  and  Executive,   constitute
          "parachute  payments,"  within  the  meaning  of  section  280G of the
          Internal Revenue Code of 1986, as amended (the "Code"), and the amount
          of such parachute  payments,  when reduced by the federal excise taxes
          due and owing on such  parachute  payments,  if any,  is less than the
          amount  Executive  would  receive if he were paid only three (3) times
          his "base  amount,"  as that term is defined  in  section  280G of the
          Code,  then,  in lieu of all payments  hereunder  which are  parachute
          payments,  Executive  shall be paid, in cash, an amount equal to three
          (3) times his base amount less one dollar ($1.00).  The determinations
          to be made with  respect to this  Section  7.1(f)  shall be made by an
          independent auditor jointly selected by the parties."

8.  NONCOMPETE.  Executive  covenants  and agrees  that  during the terms of his
employment  hereunder  and  for  a  period  of  one  (1)  year  thereafter  (the
"Noncompetition  Period"),  Executive shall not, directly or indirectly recruit,
solicit or otherwise induce any customer,  officer or employee of the Company or
its affiliates, or any independent contractor associated with the Company or its
affiliates, to discontinue such relationship with the Company or its affiliates.
During the Noncompetition  Period,  Executive shall hold in confidence and shall
not disclose to anyone,  or use or otherwise  exploit for his own benefit or the
benefit of any person or entity, any confidential or proprietary  information of
the Company, including, without limitation, customer and vendor lists, financial
statements and information,  trade secrets or marketing  arrangements and plans,
unless  directed  to do so by order of any court;  provided,  however,  that the
terms of this  paragraph  8 shall not  restrict  Executive  with  respect to any
Company customer who has been assigned Executive's A/E number.

9.       MISCELLANEOUS.
         -------------

9.1  TRANSFER AND  ASSIGNMENT.  This  Agreement is personal as to Executive  and
shall not be assigned or  transferred  by  Executive  without the prior  written
consent of the Company.  This  Agreement  shall be binding upon and inure to the
benefit of all of the  parties  hereto  and their  respective  permitted  heirs,
personal representatives, successors and assigns.

9.2  SEVERABILITY.  Nothing  contained  herein shall be construed to require the
commission of any act contrary to law. Should there by any conflict  between any
provisions hereof and any present or future statute, law, ordinance, regulation,
or other  pronouncement  having the force of law, the latter shall prevail,  but
the provision of this Agreement  affected thereby shall be curtailed and limited
only to the extent necessary to bring it within the requirements of the law, and
the  remaining  provisions  of this  Agreement  shall  remain in full  force and
effect.

                                       5

<PAGE>

9.3  GOVERNING  LAW.  This  Agreement  is made under and shall be  construed  in
accordance with the laws of the State of Illinois, without regard to conflict of
laws  principles.  The  Company  and  Executive  hereby  consent and agree to be
subject to the  jurisdiction  of the  federal  and state  courts of the State of
Illinois sitting in Chicago, Illinois, in any suit, action or proceeding arising
out of this Agreement or the transactions contemplated hereby.

9.4 COUNTERPARTS. This Agreement may be executed in several counterparts and all
documents so executed  shall  constitute  one  agreement,  binding on all of the
parties  hereto,  notwithstanding  that  all of the  parties  did not  sign  the
original or the same counterparts.

9.5 ENTIRE  AGREEMENT.  This  Agreement  constitutes  the entire  agreement  and
understanding  of the  parties  with  respect to the subject  matter  hereof and
supersedes   all  prior   oral  or   written   agreements,   arrangements,   and
understandings  with respect thereto.  No representation,  promise,  inducement,
statement  or  intention  has been made by any party hereto that is not embodied
herein,   and  not  party   shall  be  bound  by  or  liable  for  any   alleged
representation, promise, inducement or statement not so set forth herein.

9.6  MODIFICATION.  This  Agreement  may be modified,  amended,  superseded,  or
cancelled,  and any of the  terms,  covenants,  representations,  warranties  or
conditions hereof may be waived,  only by a written  instrument  executed by the
party or parties to be bound by any such modification,  amendment, supersession,
cancellation, or waiver.

9.7 ATTORNEYS'  FEES AND COSTS.  In the event of any dispute  arising out of the
subject  matter of this  Agreement,  the  prevailing  party  shall  recover,  in
addition to any other  damages  assessed,  its  attorneys'  fees and court costs
incurred in litigating or otherwise  settling or resolving such dispute  whether
or not an action is  brought or  prosecuted  to  judgment.  In  construing  this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.

9.8 WAIVER.  The waiver by either of the  parties,  express or  implied,  of any
right under this Agreement or any failure to perform under this Agreement by the
other party,  shall not  constitute  or be deemed as a waiver of any other right
under this Agreement, or of any other failure to perform under this Agreement by
the other party, whether of a similar or dissimilar nature.

9.9  CUMULATIVE  REMEDIES.  Each  and all of the  several  rights  and  remedies
provided in this Agreement, or by law or in equity, shall be cumulative,  and no
one of them shall be exclusive of any other night or remedy, and the exercise of
any one of such  rights  or  remedies  shall  not be  deemed a waiver  of, or an
election to exercise, any other such right or remedy.

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

9.11  NOTICES.  Any  notice  under this  Agreement  must be in  writing,  may be
telecopied,  sent by express 24-hour guaranteed courier,  or hand-delivered,  or
may be served by depositing the same in the United States mail, addressed to the
party to be notified,  postage-prepaid and registered or certified with a return
receipt requested.  The addresses of the parties for the receipt of notice shall
be as follows:

                                       6

<PAGE>

         If to the Company:               Olympic Cascade Financial Corporation
                                          875 North Michigan Avenue
                                          Suite 1560
                                          Chicago, Illinois  60611
                                          Attn: Steven A. Rothstein

         If to Executive:                 Mark Goldwasser
                                          2 Cornell Street
                                          Scarsdale, New York 10583

Each notice given by registered or certified mail shall be deemed  delivered and
effective  on the date of  delivery  as shown on the  return  receipt,  and each
notice  delivered  in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.

         IN WITNESS  WHEREOF,  the parties  hereto  have caused this  Employment
Agreement to be executed as of the date first set forth above.

EXECUTIVE                                          OLYMPIC CASCADE FINANCIAL
CORPORATION

                                                   By:
--------------------------------------------
Mark Goldwasser                                    Steven A. Rothstein, Chairman

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