Document:

RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.

                                  as Purchaser,

                                       and

                         RESIDENTIAL FUNDING CORPORATION

                                    as Seller

                          HOME LOAN PURCHASE AGREEMENT

                            Dated as of June 1, 2000

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<TABLE>
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                                      TABLE OF CONTENTS
                                                                                          Page

                                          ARTICLE I

                                         DEFINITIONS

<S>     <C>                                                                                 <C>
Section 1.1.   Definitions...................................................................1

                                          ARTICLE II

                          SALE OF HOME LOANS AND RELATED PROVISIONS

Section 2.1.   Sale of Home Loans............................................................2

Section 2.2.   Payment of Purchase Price.....................................................4

                                         ARTICLE III

                               REPRESENTATIONS AND WARRANTIES;
                                     REMEDIES FOR BREACH

Section 3.1.   Seller Representations and Warranties.........................................4

                                          ARTICLE IV

                                      SELLER'S COVENANTS

Section 4.1.   Covenants of the Seller......................................................12

                                          ARTICLE V

                                          SERVICING

Section 5.1.   Servicing....................................................................12

                                          ARTICLE VI

                            LIMITATION ON LIABILITY OF THE SELLER

Section 6.1.   .............................................................................12

Limitation on Liability of the Seller.......................................................12

                                            -i-

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                                                                                          Page

                                         ARTICLE VII

                                         TERMINATION

Section 7.1.   Termination..................................................................13

                                         ARTICLE VIII

                                   MISCELLANEOUS PROVISIONS

Section 8.1.   Amendment....................................................................13

Section 8.2.   GOVERNING LAW................................................................13

Section 8.3.   Notices......................................................................13

Section 8.4.   Severability of Provisions...................................................14

Section 8.5.   Relationship of Parties......................................................14

Section 8.6.   Counterparts.................................................................14

Section 8.7.   Further Agreements...........................................................14

Section 8.8.   Intention of the Parties.....................................................14

Section 8.9.   Successors and Assigns; Assignment of This Agreement.........................15

Section 8.10.  Survival.....................................................................15

</TABLE>

Exhibits

Exhibit 1             Home Loan Schedule

                                            -ii-

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                                            -1-

               This HOME LOAN PURCHASE AGREEMENT (this "Agreement" or "Home Loan
Purchase  Agreement"),  dated as of June 1, 2000,  is made  between  Residential
Funding  Corporation (the "Seller") and Residential  Funding Mortgage Securities
II, Inc. (the "Purchaser").

                                     W I T N E S S E T H :

               WHEREAS, the Seller owns Home Loans and the Related Documents for
the Home Loans indicated on the Home Loan Schedule  attached as Exhibit 1 hereto
(collectively,  the "Home Loans"), including rights to (a) any property acquired
by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds
of any insurance policies covering the Home Loans;

               WHEREAS,  the parties hereto desire that the Seller sell the Home
Loans to the Purchaser pursuant to the terms of this Agreement together with the
Related Documents on the Closing Date;

               WHEREAS,  pursuant  to the  terms  of the  Trust  Agreement,  the
Purchaser  will  sell the Home  Loans to the  Issuer  in  exchange  for the cash
proceeds of the Securities;

               WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer
will  issue  and  transfer  to  or  at  the  direction  of  the  Depositor,  the
Certificates;

     WHEREAS,  pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes; and

               WHEREAS,  pursuant to the terms of the Servicing  Agreement,  the
Master  Servicer  will  service  the Home Loans  directly or through one or more
Subservicers.

               NOW,  THEREFORE,  in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

               Section  1.1.  Definitions.  For all  purposes  of this Home Loan
Purchase Agreement,  except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall
have the  meanings  assigned  to such  terms  in the  Definitions  contained  in
Appendix A to the Indenture dated June 28, 2000 (the "Indenture"),  between Home
Loan Trust  2000-HI3,  as issuer,  and The Chase  Manhattan  Bank,  as indenture
trustee,  which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.

<PAGE>

                                            -2-

                                   ARTICLE II

                    SALE OF HOME LOANS AND RELATED PROVISIONS

               Section 2.1.  Sale of Home Loans.

               (a) The Seller,  by the execution and delivery of this Agreement,
does hereby sell,  assign,  set over,  and  otherwise  convey to the  Purchaser,
without  recourse,  all of its right,  title and  interest  in, to and under the
following,  and wherever  located:  (i) the Home Loans,  all  interest  accruing
thereon and all collections in respect thereof  received on or after the Cut-off
Date;  (ii)  property  which  secured a Home Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure;  (iii) the interest of the Seller in
any  insurance  policies in respect of the Home Loans;  and (iv) all proceeds of
the foregoing.  Such conveyance  shall be deemed to be made, with respect to the
Cut-off Date Loan  Balances,  as of the Closing Date,  subject to the receipt by
the Seller of  consideration  therefor as provided  herein  under  clause (b) of
Section 2.2.

               (b) In  connection  with  such  conveyance,  the  Seller  further
agrees,  at its own expense,  on or prior to the Closing Date to indicate in its
books and records that the Home Loans have been sold to the  Purchaser  pursuant
to this Agreement and to deliver to the Purchaser true and complete lists of all
of the Home Loans  specifying for each Home Loan (i) its account number and (ii)
its Cut-off  Date Loan  Balance.  Such  lists,  which form part of the Home Loan
Schedule,  shall  be  marked  as  Exhibit  1 to this  Agreement  and are  hereby
incorporated into and made a part of this Agreement.

               (c) In connection with such conveyance by the Seller,  the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Custodian,  on
or before the Closing Date, the following  documents or instruments with respect
to each Home Loan:

                    (i) the original  Mortgage Note endorsed without recourse to
        the Indenture  Trustee and showing an unbroken chain of endorsement from
        the  originator  thereof to the Person  endorsing it or, with respect to
        any  Home  Loan  as  to  which  the  original  Mortgage  Note  has  been
        permanently  lost or destroyed  and has not been  replaced,  a Lost Note
        Affidavit together with a copy of such Note;

                   (ii)  the  original   Mortgage  with  evidence  of  recording
        thereon,  or a copy of the  original  Mortgage  certified  by the public
        recording office in which such original Mortgage has been recorded;

                  (iii)  assignments  (which  may be  included  in  one or  more
        blanket  assignments if permitted by applicable  law) of the Mortgage in
        recordable form to "The Chase  Manhattan Bank as indenture  trustee" c/o
        the Seller at an address specified by the Seller;

<PAGE>

                                            -3-

                   (iv)  originals  of  any   intervening   assignments  of  the
        Mortgage, with evidence of recording thereon, or a copy of such original
        intervening assignment certified by the public recording office in which
        such original intervening assignment has been recorded; and

                    (v)  a  true   and   correct   copy  of   each   assumption,
        modification,  consolidation or substitution agreement, if any, relating
        to the Home Loan.

               Within the time period for the review of each  Mortgage  File set
forth in Section 2.3 of the Custodial Agreement,  if a defect or omission in any
Mortgage File is discovered  which may materially and adversely affect the value
of the related Home Loan, or the interests of the Indenture  Trustee (as pledgee
of the Home  Loans),  the  Noteholders,  the  Certificateholders  or the  Credit
Enhancer  in such Home Loan,  including  the  Seller's  failure  to deliver  any
document  required to be delivered to the  Custodian on behalf of the  Indenture
Trustee  (provided  that a Mortgage  File will not be deemed to contain a defect
for an  unrecorded  assignment  under  clause  (iii)  above  if the  Seller  has
submitted such assignment for recording or if such assignment is not required to
be recorded pursuant to the terms of the following paragraph),  the Seller shall
cure such defect,  repurchase the related Home Loan at the  Repurchase  Price or
substitute an Eligible  Substitute  Loan for the related Home Loan upon the same
terms  and   conditions  set  forth  in  Section  3.1  hereof  for  breaches  of
representations and warranties as to the Home Loans.

               Within 60 days after the  receipt by the Master  Servicer  of the
recording  information,  the Seller at its own expense shall complete and submit
for recording in the appropriate public office for real property records each of
the assignments  referred to in clause (iii) above.  While such assignment to be
recorded is being  recorded,  the  Custodian  shall  retain a photocopy  of such
assignment.  If any  assignment is lost or returned  unrecorded to the Custodian
because of any defect  therein,  the Seller is required to prepare a  substitute
assignment  or cure such defect,  as the case may be, and the Seller shall cause
such assignment to be recorded in accordance with this paragraph.

               In the event that the Seller  delivers to the Custodian on behalf
of the Indenture  Trustee any Mortgage  Note or assignment in blank,  the Seller
shall, or shall cause the Custodian to, complete the endorsement of the Mortgage
Note and the assignment within 45 days after the Closing Date.

               In  instances   where  an  original   Mortgage  or  any  original
intervening  assignment of Mortgage was not, in  accordance  with clause (ii) or
(iv) above,  delivered  by the Seller to the  respective  Custodian  prior to or
concurrently with the execution and delivery of this Agreement,  the Seller will
deliver  or  cause to be  delivered  the  originals  of such  documents  to such
Custodian promptly upon receipt thereof.

               The Purchaser  hereby  acknowledges  its acceptance of all right,
title and interest to the property, conveyed to it pursuant to this Section 2.1.

<PAGE>

                                            -4-

               (d) The parties  hereto  intend that the  transactions  set forth
herein  constitute  a sale by the Seller to the  Purchaser  of all the  Seller's
right,  title and interest in and to the Home Loans and other property as and to
the extent  described  above. In the event the transactions set forth herein are
deemed not to be a sale,  the Seller  hereby  grants to the Purchaser a security
interest in all of the Seller's  right,  title and interest in, to and under the
Home Loans and such other  property,  to secure all of the Seller's  obligations
hereunder,  and this  Agreement  shall  constitute  a security  agreement  under
applicable  law. The Seller agrees to take or cause to be taken such actions and
to  execute  such  documents,  including  without  limitation  the filing of all
necessary  UCC-1  financing  statements  filed in the State of Minnesota  (which
shall have been submitted for filing as of the Closing Date),  any  continuation
statements with respect thereto and any amendments thereto required to reflect a
change in the name or  corporate  structure  of the  Seller or the filing of any
additional UCC-1 financing  statements due to the change in the principal office
of the Seller, as are necessary to perfect and protect the Purchaser's interests
in each Home Loan and the proceeds thereof.

               Section 2.2.  Payment of Purchase Price.

               (a) The  "Purchase  Price" for the Home Loans  shall be an amount
equal to  $600,226,185.53  in  immediately  available  funds  together  with the
Certificates.

               (b) In  consideration  of the  sale of the  Home  Loans  from the
Seller to the  Purchaser on the Closing  Date,  the  Purchaser  shall pay to the
Seller on the Closing Date by wire transfer of immediately  available funds to a
bank account designated by the Seller, the amount specified above in clause (a);
provided,  that  such  payment  may be on a net  funding  basis if agreed by the
Seller and the Purchaser.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES;
                               REMEDIES FOR BREACH

     Section 3.1. Seller  Representations and Warranties.  The Seller represents
and warrants to the Purchaser, as of the Closing Date (or if otherwise specified
below, as of the date so specified):

        (a)    As to the Seller:

                    (i) The  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  to own its  assets  and to  transact  the
        business in which it is currently engaged.  The Seller is duly qualified
        to do business as a foreign  corporation and is in good standing in each
        jurisdiction in which the character of the business  transacted by it or
        properties owned or leased by it

<PAGE>

                                            -5-

        requires such qualification and in which the failure to so qualify would
        have a material  adverse effect on the business,  properties,  assets or
        condition (financial or other) of the Seller;

                   (ii) The Seller has the power and authority to make, execute,
        deliver and perform its obligations  under this Agreement and all of the
        transactions  contemplated  under  this  Agreement,  and has  taken  all
        necessary  corporate  action to authorize  the  execution,  delivery and
        performance  of  this  Agreement.  When  executed  and  delivered,  this
        Agreement will constitute the legal, valid and binding obligation of the
        Seller  enforceable in accordance with its terms,  except as enforcement
        of such terms may be limited by  bankruptcy,  insolvency or similar laws
        affecting  the  enforcement  of creditors'  rights  generally and by the
        availability of equitable remedies;

                  (iii) The Seller is not  required to obtain the consent of any
        other Person or any consent, license, approval or authorization from, or
        registration or declaration with, any governmental authority,  bureau or
        agency in connection with the execution, delivery, performance, validity
        or enforceability of this Agreement, except for such consents, licenses,
        approvals or authorizations,  or registrations or declarations, as shall
        have been obtained or filed, as the case may be;

                   (iv) The  execution  and delivery of this  Agreement  and the
        performance of the transactions  contemplated  hereby by the Seller will
        not violate any provision of any existing law or regulation or any order
        or decree of any court  applicable to the Seller or any provision of the
        Certificate of  Incorporation  or Bylaws of the Seller,  or constitute a
        material breach of any mortgage,  indenture, contract or other agreement
        to which the Seller is a party or by which the Seller may be bound;

                    (v) No litigation or administrative  proceeding of or before
        any court, tribunal or governmental body is currently pending, or to the
        knowledge  of the Seller  threatened,  against  the Seller or any of its
        properties or with respect to this Agreement or the  Certificates  which
        in the opinion of the Seller has a reasonable likelihood of resulting in
        a  material  adverse  effect on the  transactions  contemplated  by this
        Agreement;

                   (vi) This  Agreement  constitutes a legal,  valid and binding
        obligation of the Seller,  enforceable  against the Seller in accordance
        with its terms,  except as  enforceability  may be limited by applicable
        bankruptcy, insolvency, reorganization, moratorium or other similar laws
        now or hereafter  in effect  affecting  the  enforcement  of  creditors'
        rights in general  and except as such  enforceability  may be limited by
        general principles of equity (whether  considered in a proceeding at law
        or in equity);

     (vii) This  Agreement  constitutes a valid  transfer and  assignment to the
Purchaser  of all right,  title and  interest of the Seller in, to and under the
Home Loans, all

<PAGE>

                                            -6-

        monies due or to become due with  respect  thereto,  and all proceeds of
        such Cut-off Date Loan  Balances with respect to the Home Loans and such
        funds  as are  from  time to time  deposited  in the  Custodial  Account
        (excluding any investment  earnings  thereon) as assets of the Trust and
        all other property  specified in the definition of "Trust" as being part
        of the corpus of the Trust conveyed to the Purchaser by the Seller;

                 (viii) The Seller is not in default  with  respect to any order
        or  decree  of any  court or any  order,  regulation  or  demand  or any
        federal,  state,  municipal or governmental  agency, which default might
        have  consequences  that  would  materially  and  adversely  affect  the
        condition  (financial  or  other)  or  operations  of the  Seller or its
        properties or might have  consequences  that would materially  adversely
        affect its performance hereunder; and

                     (The  Seller  has not  transferred  the  Home  Loans to the
         Purchaser  with any  intent  to  hinder,  delay or  defraud  any of its
         creditors.

        (b)    As to the Home Loans:

                    (i) The information set forth in the Home Loan Schedule with
        respect  to each Home Loan or the Home  Loans  that  compose  either the
        Group I Loans or Group II Loans,  as applicable,  is true and correct in
        all  material  respects  as of the date or dates  respecting  which such
        information is furnished;

                   (ii)      [Reserved];

                  (iii) The related Mortgage Note and the Mortgage have not been
        assigned or pledged,  the Seller has good and  marketable  title thereto
        and the  Seller is the sole  owner and  holder of the Home Loan free and
        clear  of  any  and  all  liens,  claims,  encumbrances,   participation
        interests,  equities,  pledges,  charges or  security  interests  of any
        nature  and has full right and  authority,  under all  governmental  and
        regulatory  bodies  having   jurisdiction  over  the  ownership  of  the
        applicable  Home  Loans to sell and  assign  the same  pursuant  to this
        Agreement;

               (iv) To the best of Seller's knowledge, there is no valid offset,
          defense or counterclaim of any obligor under any Mortgage;

               (v) To the best of  Seller's  knowledge,  there is no  delinquent
          recording or other tax or fee or  assessment  lien against any related
          Mortgaged Property;

               (vi) To the best of Seller's  knowledge,  there is no  proceeding
          pending or  threatened  for the total or partial  condemnation  of the
          related Mortgaged Property;

<PAGE>

                                            -7-

                  (vii)  To  the  best  of  Seller's  knowledge,  there  are  no
        mechanics'  or similar  liens or claims  which have been filed for work,
        labor or material affecting the related Mortgaged Property which are, or
        may be liens  prior or equal to, or  subordinate  with,  the lien of the
        related  Mortgage,  except liens which are fully insured  against by the
        title insurance policy referred to in clause (xi);

               (viii) As of the Cut-off  Date,  no Home Loan was 30 days or more
          delinquent;

               (ix) For each Home Loan, the related  Mortgage File contains each
          of the documents and instruments specified to be included therein;

                    (x) The related  Mortgage  Note and the related  Mortgage at
        the time it was made complied in all material  respects with  applicable
        local, state and federal laws;

                   (xi) A policy  of  title  insurance  in the  form and  amount
        required by the Program  Guide was  effective  as of the closing of each
        Home Loan and each such  policy is valid and  remains  in full force and
        effect,  and a title search or other assurance of title customary in the
        relevant  jurisdiction was obtained with respect to each Home Loan as to
        which no title insurance policy or binder was issued;

                  (xii) None of the  Mortgaged  Properties is a mobile home that
        is  permanently  attached to its  foundation  and none of the  Mortgaged
        Properties  are  manufactured  housing  units  that are not  permanently
        attached to their foundation;

                 (xiii)  Approximately  11.5% and 39.3% of the Group I Loans and
        Group II Loans, respectively, in each case by Cut-off Date Loan Balance,
        are secured by Mortgaged Properties located in California;

                  (xiv) 90.4% and 83.8% of the Group I Loans and Group II Loans,
        respectively, by Cut-Off Date Loan Balance, had a Combined Loan-to-Value
        Ratio in excess of 100%;

                   (xv)      [Reserved];

                  (xvi)      [Reserved];

               (xvii) None of the proceeds of any Home Loan were used to finance
          the purchase of single premium credit insurance policies;

                (xviii)  The  Seller  will  submit  for  filing  or  cause to be
        submitted for filing UCC-1  financing  statements in accordance with the
        terms of this Agreement;

<PAGE>

                                            -8-

               (xix) Each Mortgage is substantially similar one to the other and
          is an enforceable obligation of the related Mortgagor;

               (xx) To the best of Seller's  knowledge,  the  physical  property
          subject to each  Mortgage  is free of  material  damage and is in good
          repair;

                  (xxi) The Seller  has not  received a notice of default of any
        senior mortgage loan related to a Mortgaged  Property which has not been
        cured by a party other than the related Subservicer;

               (xxii) No Group I Loan has a prepayment penalty term that extends
          beyond five years after the date of origination;

                 (xxiiNone of the Home Loans are reverse Home Loans;

                 (xxiv) No Group I Loan has a remaining term to stated  maturity
        of less than 27 months.  All of the Group I Loans are fixed rate and are
        fully amortizing,  except for 0.6% that are Balloon Payment loans. As of
        the  Cut-off  Date,  the Loan Rates on the Group I Loans  range  between
        8.15% per annum and 18.75% per annum and the weighted  average Loan Rate
        is approximately 13.9421% per annum. The weighted average remaining term
        to  stated  maturity  of the  Group I Loans  as of the  Cut-off  Date is
        approximately 230 months;

                  (xxv) No Group II Loan has a remaining term to stated maturity
        of less than 59 months. All of the Group II Loans are fixed rate and are
        fully amortizing,  except for 6.9% that are Balloon Payment Loans. As of
        the Cut-off  Date,  the Loan Rates on the Group II Loans  range  between
        9.50% per annum and 18.25% per annum and the weighted  average Loan Rate
        is approximately 13.3169% per annum. The weighted average remaining term
        to  stated  maturity  of the  Group II Loans as of the  Cut-off  Date is
        approximately 241 months;

                 (xxvi) (A) Each Mortgaged  Property with respect to the Group I
        Loans and Group II Loans  consists of a single  parcel of real  property
        with a single family residence erected thereon,  manufactured housing or
        an individual  condominium  unit.  (B) With respect to the Group I Loans
        and Group II Loans, respectively,  (i) approximately 3.27% and 2.89% (by
        Cut-off  Date Loan  Balance)  are secured by real  property  improved by
        individual  condominium units and (ii)  approximately  89.97% and 77.64%
        (by Cut-off Date Loan  Balance) of the Group I Loans and Group II Loans,
        respectively,  are  secured  by  real  property  with  a  single  family
        residence erected thereon;

                (xxvii)  Approximately  99.85% and 100% of the Group I Loans and
        Group II Loans, respectively,  by Cut-off Date Loan Balance, are secured
        by second  mortgages  or deeds of trust and  approximately  0.15% of the
        Group I Loans,  by  Cut-off  Date Loan  Balance,  are  secured  by first
        mortgages or deeds of trust;

<PAGE>

                                            -9-

               (xxviii)  If any of the Home  Loans are  secured  by a  leasehold
        interest,  with respect to each leasehold interest, the use of leasehold
        estates for residential  properties is an accepted  practice in the area
        where the related Mortgaged Property is located; residential property in
        such area  consisting of leasehold  estates is readily  marketable;  the
        lease is recorded and no party is in any way in breach of any  provision
        of such  lease;  the  leasehold  is in full  force and effect and is not
        subject to any prior lien or encumbrance by which the leasehold could be
        terminated;  and the remaining term of the lease does not terminate less
        than five years after the maturity date of such Home Loan.

                 (xxix) Each Subservicer meets all applicable requirements under
        the Servicing Agreement, is properly qualified to service the Home Loans
        and has been  servicing  the Home  Loans  prior to the  Cut-off  Date in
        accordance with the terms of the Program Guide;

                  (xxx) For each Home Loan, if required, as of the Cut-off Date,
        flood   insurance   has  been  obtained   which  meets  all   applicable
        requirements of Section 3.04 of the Servicing  Agreement.  For each Home
        Loan,  hazard  insurance  has been obtained  which meets all  applicable
        requirements of Section 3.04 of the Servicing Agreement;

                 (xxxi) There is no material default, breach, violation or event
        of  acceleration  existing  under  the  terms  of any  Mortgage  Note or
        Mortgage and no event which,  with notice and expiration of any grace or
        cure period, would constitute a material default,  breach,  violation or
        event of acceleration  under the terms of any Mortgage Note or Mortgage,
        and no such material default, breach, violation or event of acceleration
        has been  waived  by the  Seller  or by any  other  entity  involved  in
        originating or servicing a Home Loan;

                (xxxii) No  instrument of release or waiver has been executed in
        connection with the Home Loans,  and no Mortgagor has been released,  in
        whole or in part from its obligations in connection with a Home Loan;

               (xxxiii)  With  respect to each Home Loan that is a second  lien,
        either (i) no consent  for the Home Loan was  required  by the holder of
        the related  prior lien or liens or (ii) such consent has been  obtained
        and is contained in the Mortgage File;

                (xxxiv) With respect to each Home Loan, either (i) the Home Loan
        is  assumable  pursuant to the terms of the Mortgage  Note,  or (ii) the
        Home Loan  contains a customary  provision for the  acceleration  of the
        payment  of the unpaid  principal  balance of the Home Loan in the event
        the related Mortgaged  Property is sold without the prior consent of the
        mortgagee thereunder; and

                 (xxxv)  Each  Mortgage  File  either  contains  (a) an original
        Mortgage  Note or (b)  with  respect  to any Home  Loan as to which  the
        original Mortgage Note has been

<PAGE>

                                            -10-

        permanently  lost or destroyed  and has not been  replaced,  a Lost Note
        Affidavit together with a copy of such Mortgage Note.

        (c) Upon  discovery  by Seller or upon  notice from the  Purchaser,  the
Credit Enhancer,  the Issuer,  the Owner Trustee,  the Indenture  Trustee or any
Custodian,  as  applicable,  of a breach of any  representation  or  warranty in
clause (a) above which  materially  and  adversely  affects the interests of the
Securityholders  or the  Credit  Enhancer  in any Home Loan,  the Seller  shall,
within 45 days of its discovery or its receipt of notice of such breach,  either
(i) cure such  breach in all  material  respects or (ii) to the extent that such
breach  is  with  respect  to a Home  Loan or a  Related  Document,  either  (A)
repurchase  such  Home  Loan  from the  Trust at the  Repurchase  Price,  or (B)
substitute  one or more  Eligible  Substitute  Loans for such Home Loan, in each
case in the  manner and  subject to the  conditions  and  limitations  set forth
below.

               Upon  discovery by the Seller or upon notice from the  Purchaser,
the Credit Enhancer, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian,  as  applicable,  of a breach of any  representation  or  warranty in
clause (b) above with  respect to any Home  Loan,  or upon the  occurrence  of a
Repurchase  Event,  that  materially and adversely  affects the interests of the
Securityholders  or the Credit  Enhancer or of the  Purchaser  in such Home Loan
(notice of which shall be given to the Purchaser by the Seller,  if it discovers
the same),  notwithstanding  the Seller's lack of knowledge  with respect to the
substance of such representation and warranty,  the Seller shall, within 90 days
after the earlier of its  discovery  or receipt of notice  thereof,  either cure
such  breach  or  Repurchase  Event  in all  material  respects  or  either  (i)
repurchase  such  Home  Loan from the  Trust at the  Repurchase  Price,  or (ii)
substitute  one or more  Eligible  Substitute  Loans for such Home Loan, in each
case in the manner and subject to the conditions set forth below. The Repurchase
Price for any such Home Loan  repurchased  by the Seller  shall be  deposited or
caused  to be  deposited  by  the  Master  Servicer  in  the  Custodial  Account
maintained by it pursuant to Section 3.02 of the Servicing Agreement.

               The Seller may only  substitute  an Eligible  Substitute  Loan or
Loans for a Deleted Loan pursuant to this Section  3.1(c) if the Seller  obtains
an Opinion of  Counsel  generally  to the  effect  that the  substitution  of an
Eligible  Substitute  Loan or Loans for a Deleted  Loan will not cause an entity
level  federal or state income tax to be imposed on the Trust.  The Seller shall
also  deliver  to the  Custodian  on behalf of the Trust,  with  respect to such
Eligible  Substitute  Loan or Loans,  the original  Mortgage  Note and all other
documents and  agreements as are required by Section  2.1(c),  with the Mortgage
Note endorsed as required by Section 2.1(c). No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Eligible Substitute Loans in the month of substitution shall not
be part of the Trust and will be retained by the Master Servicer and remitted by
the Master Servicer to the Seller on the next succeeding Payment Date,  provided
that a  payment  at  least  equal to the  applicable  Monthly  Payment  has been
received by the Trust,  for such month in respect of the Deleted  Loan.  For the
month of substitution,  distributions  to the Custodial  Account pursuant to the
Servicing  Agreement will include the Monthly  Payment due on a Deleted Loan for
such month and thereafter the Seller shall be

<PAGE>

                                            -11-

entitled to retain all amounts  received in respect of such  Deleted  Loan.  The
Master  Servicer  shall amend or cause to be amended  the Home Loan  Schedule to
reflect the removal of such  Deleted Loan and the  substitution  of the Eligible
Substitute  Loan or Loans and the Master Servicer shall deliver the amended Home
Loan Schedule to the Indenture  Trustee.  Upon such  substitution,  the Eligible
Substitute Loan or Loans shall be subject to the terms of this Agreement and the
Servicing Agreement in all respects, the Seller shall be deemed to have made the
representations  and  warranties  with respect to the Eligible  Substitute  Loan
contained  herein set forth in clauses  (iii) through  (xxxv) of Section  3.1(b)
(other than clauses (viii), (xiii), (xiv), (xxiv), (xxv), (xxvi)(B) and (xxvii))
as of the date of substitution,  and the Seller shall be obligated to repurchase
or substitute for any Eligible  Substitute  Loan as to which a Repurchase  Event
has occurred as provided  herein.  In connection with the substitution of one or
more  Eligible  Substitute  Loans  for one or more  Deleted  Loans,  the  Master
Servicer  will  determine the amount (such amount,  a  "Substitution  Adjustment
Amount"),  if any, by which the aggregate principal balance of all such Eligible
Substitute  Loans  as of the date of  substitution  is less  than the  aggregate
principal balance of all such Deleted Loans (after  application of the principal
portion of the Monthly Payments due in the month of substitution  that are to be
distributed to the Custodial Account in the month of  substitution).  The Seller
shall deposit the amount of such shortfall into the Custodial Account on the day
of substitution, without any reimbursement therefor.

               Upon receipt by the Indenture  Trustee on behalf of the Trust and
the Custodian of written  notification,  signed by a Servicing  Officer,  of the
deposit  of  such  Repurchase  Price  or of  such  substitution  of an  Eligible
Substitute Loan (together with the complete  related  Mortgage File) and deposit
of  any  applicable  Substitution  Adjustment  Amount  as  provided  above,  the
Custodian,  on behalf of the  Indenture  Trustee shall release to the Seller the
related Mortgage File for the Home Loan being repurchased or substituted for and
the  Indenture  Trustee on behalf of the Trust shall  execute  and deliver  such
instruments of transfer or assignment  prepared by the Master Servicer,  in each
case  without  recourse,  as shall be  necessary  to vest in the  Seller  or its
designee such Home Loan released  pursuant  hereto and thereafter such Home Loan
shall not be an asset of the Trust.

               It is understood  and agreed that the obligation of the Seller to
cure any breach,  or to repurchase or substitute  for, any Home Loan as to which
such a breach has occurred and is continuing  shall  constitute  the sole remedy
respecting   such  breach   available  to  the   Purchaser,   the  Issuer,   the
Certificateholders  (or the Owner  Trustee on behalf of the  Certificateholders)
and the  Noteholders  (or the  Indenture  Trustee on behalf of the  Noteholders)
against the Seller.

               It  is  understood  and  agreed  that  the   representations  and
warranties  set  forth  in  this  Section  3.1  shall  survive  delivery  of the
respective Mortgage Files to the Indenture Trustee, or the Custodian.

<PAGE>

                                            -12-

                                          ARTICLE IV

                                      SELLER'S COVENANTS

               Section 4.1. Covenants of the Seller. The Seller hereby covenants
that,  except for the  transfer  hereunder,  the Seller  will not sell,  pledge,
assign or transfer to any other Person,  or grant,  create,  incur or assume any
Lien on any Home Loan,  or any  interest  therein.  The Seller  will  notify the
Indenture  Trustee,  as assignee of the Purchaser,  of the existence of any Lien
(other  than as  provided  above) on any Home Loan  immediately  upon  discovery
thereof; and the Seller will defend the right, title and interest of the Issuer,
as assignee of the Purchaser, in, to and under the Home Loans against all claims
of third parties claiming through or under the Seller;  provided,  however, that
nothing in this Section 4.1 shall be deemed to apply to any Liens for  municipal
or  other  local  taxes  and  other  governmental   charges  if  such  taxes  or
governmental  charges  shall not at the time be due and payable or if the Seller
shall currently be contesting the validity  thereof in good faith by appropriate
proceedings.

                                    ARTICLE V

                                    SERVICING

               Section  5.1.  Servicing.  The Seller will service the Home Loans
pursuant to the terms and conditions of the Servicing Agreement and will service
the Home  Loans  directly  or through  one or more  subservicers  in  accordance
therewith.

                                          ARTICLE VI

                      LIMITATION ON LIABILITY OF THE SELLER

               Section 6.1.  Limitation on Liability of the Seller.  None of the
directors,  officers,  employees  or  agents  of the  Seller  shall be under any
liability  to the  Purchaser,  it  being  expressly  understood  that  all  such
liability  is  expressly   waived  and  released  as  a  condition  of,  and  as
consideration for, the execution of this Agreement.  Except as and to the extent
expressly provided herein or in the Servicing Agreement, the Seller shall not be
under any liability to the Trust,  the Owner Trustee,  the Indenture  Trustee or
the Securityholders.  The Seller and any director, officer, employee or agent of
the  Seller  may rely in good  faith on any  document  of any kind  prima  facie
properly  executed and submitted by any Person  respecting  any matters  arising
hereunder.

<PAGE>

                                            -13-

                                   ARTICLE VII

                                   TERMINATION

               Section  7.1.   Termination.   The  respective   obligations  and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the  Seller's  indemnity  obligations  as provided  herein,  upon the
termination of the Owner Trust pursuant to the terms of the Trust Agreement.

                                         ARTICLE VIII

                                   MISCELLANEOUS PROVISIONS

               Section 8.1.  Amendment.  This Agreement may be amended from time
to time by the  Seller and the  Purchaser  by  written  agreement  signed by the
Seller and the Purchaser, with the consent of the Credit Enhancer (which consent
shall not be unreasonably withheld).

               Section 8.2.  GOVERNING LAW. THIS AGREEMENT  SHALL BE GOVERNED BY
AND  CONSTRUED  IN  ACCORDANCE  WITH THE  LAWS OF THE  STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

               Section 8.3.  Notices.  All demands,  notices and  communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:

               (i)    if to the Seller:

                      Residential Funding Corporation
                      8400 Normandale Lake Boulevard
                      Suite 700
                      Minneapolis, Minnesota  55437
                      Attention:  Managing Director, Structured Finance

or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.

<PAGE>

                                            -14-

               (ii)   if to the Purchaser:

                      Residential Funding Mortgage Securities II, Inc.
                      8400 Normandale Lake Boulevard
                      Suite 700
                      Minneapolis, Minnesota 55437
                      Attention:  Managing Director, Structured Finance

               (iii)  if to the Custodian:

                      Norwest Bank Minnesota, N.A.
                      1015 10th Avenue S.E.
                      Minneapolis, Minnesota  55414
                      Attention: MDC -- Account Manager

or such other  address as may hereafter be furnished to the Seller in writing by
the Purchaser.

               Section 8.4.  Severability  of Provisions.  If any one or more of
the covenants,  agreements,  provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants,  agreements,  provisions
or terms shall be deemed  severable  from the remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.

               Section 8.5.  Relationship of Parties.  Nothing herein  contained
shall be deemed or construed to create a partnership  or joint  venture  between
the  parties  hereto,  and the  services  of the Seller  shall be rendered as an
independent contractor and not as agent for the Purchaser.

               Section 8.6. Counterparts.  This Agreement may be executed in one
or  more   counterparts  and  by  the  different   parties  hereto  on  separate
counterparts, each of which, when so executed, shall be deemed to be an original
and such counterparts, together, shall constitute one and the same agreement.

               Section 8.7.  Further  Agreements.  The  Purchaser and the Seller
each  agree to execute  and  deliver  to the other  such  additional  documents,
instruments  or agreements as may be necessary or  appropriate to effectuate the
purposes of this Agreement.

               Section 8.8. Intention of the Parties. It is the intention of the
parties that the Purchaser is  purchasing,  and the Seller is selling,  the Home
Loans,  rather than a loan by the  Purchaser  to the Seller  secured by the Home
Loans. Accordingly,  the parties hereto each intend to treat the transaction for
federal  income tax  purposes  as a sale by the  Seller,  and a purchase  by the
Purchaser,  of the Home Loans.  The Purchaser  will have the right to review the
Home Loans and the Related  Documents to determine  the  characteristics  of the
Home Loans which will affect the federal

<PAGE>

                                            -15-

income tax  consequences  of owning the Home Loans and the Seller will cooperate
with all reasonable requests made by the Purchaser in the course of such review.

               Section  8.9.   Successors   and  Assigns;   Assignment  of  This
Agreement.  This  Agreement  shall  bind  and  inure  to the  benefit  of and be
enforceable  by the  Seller,  Purchaser  and  their  respective  successors  and
assigns.  The obligations of the Seller under this Agreement  cannot be assigned
or delegated to a third party without the consent of the Credit Enhancer and the
Purchaser,  which consent shall be at the Credit  Enhancer's and the Purchaser's
sole discretion,  except that the Purchaser and the Credit Enhancer  acknowledge
and agree that the Seller may assign its obligations  hereunder to any Affiliate
of the Seller,  to any Person  succeeding to the business of the Seller,  to any
Person  into which the Seller is merged  and to any  Person  resulting  from any
merger,  conversion or consolidation to which the Seller is a party. The parties
hereto  acknowledge  that the  Purchaser  is  acquiring  the Home  Loans for the
purpose of contributing  them to the Issuer.  Pursuant to the terms of the Trust
Agreement,  the Issuer  will issue and  transfer to or at the  direction  of the
Purchaser,  the  Certificates  and pursuant to the terms of the  Indenture,  the
Issuer will issue and  transfer to or at the  direction  of the  Purchaser,  the
Notes  secured by the Home Loans.  As an inducement to the Purchaser to purchase
the Home Loans,  the Seller  acknowledges  and consents to (i) the assignment by
the Purchaser to the Issuer of all of the Purchaser's  rights against the Seller
pursuant  to  this  Agreement  insofar  as such  rights  relate  to  Home  Loans
transferred  to the Issuer and to the  enforcement  or  exercise of any right or
remedy  against the Seller  pursuant to this  Agreement by the Issuer,  (ii) the
enforcement  or exercise of any right or remedy  against the Seller  pursuant to
this  Agreement by or on behalf of the Issuer and (iii) the  Issuer's  pledge of
its interest in this Agreement to the Indenture  Trustee and the  enforcement by
the Indenture  Trustee of any such right or remedy against the Seller  following
an Event of Default under the Indenture.  Such  enforcement of a right or remedy
by the Issuer or the Indenture Trustee, as applicable, shall have the same force
and  effect as if the right or remedy  had been  enforced  or  exercised  by the
Purchaser directly.

     Section 8.10.  Survival.  The representations and warranties made herein by
the Seller and the provisions of Article VI hereof shall survive the purchase of
the Home Loans hereunder.

<PAGE>

                                            -16-

               IN WITNESS  WHEREOF,  the Seller and the  Purchaser  have  caused
their  names  to be  signed  to this  Home  Loan  Purchase  Agreement  by  their
respective officers thereunto duly authorized as of the day and year first above
written.

                                            RESIDENTIAL FUNDING MORTGAGE
                                            SECURITIES II, INC.
                                                   as Purchaser

                                            By:    /s/ Lisa Lundsten
                                            Name:  Lisa Lundsten
                                            Title: Vice President

                                            RESIDENTIAL FUNDING CORPORATION
                                                   as Seller

                                            By:    /s/ Randy Van Zee
                                            Name:      Randy Van Zee
                                            Title:     Director

<PAGE>

                                            -1-

               IN WITNESS  WHEREOF,  the Seller and the  Purchaser  have  caused
their  names  to be  signed  to this  Home  Loan  Purchase  Agreement  by  their
respective officers thereunto duly authorized as of the day and year first above
written.

                                            RESIDENTIAL FUNDING MORTGAGE
                                            SECURITIES II, INC.
                                                   as Purchaser

                                            By:
                                            Name:      Lisa Lundsten
                                            Title:        Vice President

                                            RESIDENTIAL FUNDING CORPORATION
                                                   as Seller

                                            By:
                                            Name:      Randy Van Zee
                                            Title:     Director

<PAGE>

                                    Exhibit 1

                               HOME LOAN SCHEDULE

                           TO BE PROVIDED UPON REQUESTAGREEMENT AND PLAN OF MERGER
                              AND REORGANIZATION

     AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of June 19,
2000 (the "Agreement"), among SAN Holdings, Inc., a corporation organized and
existing under the laws of the State of Colorado ("Parent"), Value Tech
Acquisition Corporation, a corporation organized and existing under the laws
of the State of Colorado ("Merger Sub") and a direct wholly owned subsidiary
of Parent, and Value Technology, Inc., a corporation organized and existing
under the laws of the State of Colorado (the "Company");

                             W I T N E S S E T H:

     WHEREAS, the boards of directors of Parent, Merger Sub and the Company
have each determined that it is consistent with and in furtherance of their
respective long-term business strategies and fair to and in the best interests
of their respective stockholders to combine the respective businesses of
Parent and the Company by means of a merger (the "Merger") of Merger Sub with
and into the Company upon the terms and subject to the conditions set forth
herein and in accordance with the Colorado Business Corporation Act (the
"Colorado Corporation Law"); and

     WHEREAS, for United States Federal income tax purposes, it is intended
that the Merger qualify as a tax-free reorganization under the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended (together with
the rules and regulations promulgated thereunder, the "Code");

     NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:

                                   ARTICLE I
                                  THE MERGER

     1.1     The Merger.  Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Colorado Corporation Law,
at the Effective Time, Merger Sub shall be merged with and into the Company.
As a result of the Merger, the separate corporate existence of Merger Sub
shall cease and the Company shall continue as the surviving corporation of the
Merger (the "Surviving Corporation").

     1.2     Closing.   Unless this Agreement shall have been terminated and
the Merger shall have been abandoned pursuant to Section 7.1 and subject to
the satisfaction or waiver of the conditions set forth in Article VI, the
consummation of the Merger shall take place as promptly as practicable (and in
any event within three business days) after satisfaction or waiver of the
conditions set forth in Article VII, at a closing (the "Closing") to be held
at the offices of Krys Boyle Freedman & Sawyer, P.C., 600 17th Street, Suite
2700 South, Denver, Colorado 80202, unless another date, time or place is
agreed to by the Company and Parent.

<PAGE>

     1.3     Effective Time.  At the time of the Closing, the parties shall
cause the Merger to be consummated by filing articles of merger (the "Articles
of Merger") with the Secretary of State of the State of Colorado in such form
as required by, and executed in accordance with the relevant provisions of,
the Colorado Corporation Law (the date and time of such filing, or such later
time as may be agreed by the parties hereto and specified in the Articles of
Merger, being the "Effective Time").

     1.4     Effect of the Merger.  At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the Colorado
Corporation Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation, and the Parent shall own all of the
issued and outstanding stock of the Surviving Corporation and shall have full
legal control over the Surviving Corporation.

     1.5    Articles of Incorporation; Bylaws; Directors and Officers of
Surviving Corporation.  Unless otherwise agreed by the Company and Parent
prior to the Effective Time, at the Effective Time:

            (a)     the articles of incorporation and bylaws of the Company,
as in effect immediately prior to the Effective Time, shall be the articles of
incorporation and bylaws of the Surviving Corporation until thereafter amended
as provided by any applicable law, rule or regulation (collectively, "Law")
and such articles of incorporation or bylaws;

            (b)     the officers of Merger Sub immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation
until their successors are elected or appointed and qualified or until their
resignation or removal; and

            (c)     the directors of Merger Sub immediately prior to the
Effective Time shall be the  directors of the Surviving Corporation.

                                 ARTICLE II
                           CONVERSION OF SECURITIES;
                     EXCHANGE OF CERTIFICATES; CASH PAYMENT

     2.1     Conversion of Securities.  At the Effective Time, by virtue of
the Merger and without any action on the part of Merger Sub, the Company or
the holders of any capital stock of the Company:

            (a)     Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any Dissenting Shares) and
all rights in respect thereof shall forthwith cease to exist and shall be
converted into and become exchangeable for 100.05 shares (the "Common Exchange
Ratio") of Parent Common Stock.

            (b)     Each share of common stock, no par value, of Merger Sub
issued and outstanding immediately prior to the Effective Time and all rights
in respect thereof shall forthwith cease to exist and shall be converted into
and become exchangeable for one newly and validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.

                                       2
<PAGE>

     2.2     Exchange of Shares.  Subject to the terms and conditions hereof,
at or prior to the Effective Time, Parent shall appoint an exchange agent to
effect the exchange of shares of Company Common Stock (other than Dissenting
Shares) for Parent Common Stock in accordance with the provisions of this
Article II (the "Exchange Agent").  From time to time after the Effective
Time, Parent shall deposit, or cause to be deposited, certificates
representing Parent Common Stock for conversion of shares of Company Common
Stock (other than Dissenting Shares) in accordance with the provisions of
Section 2.1 (such certificates being herein referred to as the "Exchange
Fund"); provided, however, that all certificates representing Parent Common
Stock to be issued pursuant to Section 2.1(a) shall be deposited within ten
(10) Business Days following the Effective Time.  Commencing immediately after
the Effective Time and until the appointment of the Exchange Agent shall be
terminated, each holder of a certificate or certificates theretofore
representing shares of Company Common Stock (other than Dissenting Shares) may
surrender the same to the Exchange Agent and, after the appointment of the
Exchange Agent shall be terminated, any such holder may surrender any such
certificate to Parent.  Such holder shall be entitled upon such surrender to
receive in exchange therefor a certificate or certificates representing the
number of full shares of Parent Common Stock into which the shares of Company
Common Stock theretofore represented by the certificate or certificates so
surrendered shall have been converted in accordance with the provisions of
Section 2.1, and all such shares of Parent Common Stock shall be deemed to
have been issued at the Effective Time. Until so surrendered and exchanged,
each outstanding certificate which, prior to the Effective Time, represented
issued and outstanding shares of Company Common Stock shall be deemed for all
corporate purposes of Parent to evidence ownership of the number of full
shares of Parent Common Stock into which the shares of Company Common Stock
theretofore represented thereby shall have been converted at the Effective
Time.  Notwithstanding the foregoing provisions of this Section 2.2, risk of
loss and title to such certificates representing shares of Company Common
Stock shall pass only upon proper delivery of such certificates to the
Exchange Agent, and neither the Exchange Agent nor any party hereto shall be
liable to a holder of shares of Company Common Stock for any Parent Common
Stock or dividends or distributions thereon delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law or to a
transferee pursuant to Section 2.2.

     2.3     Stock Transfer Books.  At the Effective Time, the stock transfer
books of the Company with respect to shares of Company Common Stock shall be
closed, and there shall be no further registration of transfers of shares of
Company Common Stock thereafter on the records of any such stock transfer
books.  In the event of a transfer of ownership of shares of Company Common
Stock that is not registered in the stock transfer records of the Company, at
the Effective Time, a certificate or certificates representing the number of
full shares of Parent Common Stock into which such shares of Company Common
Stock shall have been converted shall be issued to the transferee in
accordance with Section 2.2, if the certificate or certificates representing
such shares of Company Common Stock is or are surrendered as provided in
Section 2.2, accompanied by all documents required to evidence and effect such
transfer and by evidence of payment of any applicable stock transfer tax.

     2.4     No Fractional Share Certificates.  Unless Parent otherwise
determines, no scrip or fractional share certificates for Parent Common Stock
shall be issued upon the surrender for exchange of certificates evidencing
shares of Company Common Stock.  In lieu of fractional shares, each holder of
shares of Company Common Stock who would be entitled to receive a fractional
share of Parent Common Stock shall, upon surrender of the certificate or

                                       3
<PAGE>

certificates representing shares of Company Common Stock, be entitled to
receive one full share of Parent Common Stock for any fractional share
interest.

     2.5     Dissenting Shares.  Notwithstanding any provision of Section 2.1
hereof to the contrary, shares of Company Common Stock which are held by
holders of such shares who have not voted in favor of the Merger, who are
entitled to dissent and who have delivered a written notice of intent to
demand payment for such shares in the manner provided in Section 7-113-102 of
the Colorado Corporation Law ("Dissenting Shares"), shall not be converted
into or exchanged for or represent the right to receive any shares of Parent
Common Stock, unless such holder fails to perfect or effectively withdraws or
loses such rights to payment.  If, after the Effective Time, such holder fails
to perfect or effectively withdraws or loses such right to payment, then such
Dissenting Shares shall thereupon be deemed to have been converted into and
exchanged pursuant to Section 2.1 hereof, as of the Effective Time, for the
right to receive shares of Parent Common Stock issued in the Merger to which
the holder of such shares of Company Common Stock is entitled, without any
interest thereon.  The Company shall give Parent prompt notice of any notices
and demands received by the Company for payment for shares of Company Common
Stock, and Parent shall have the right to participate in all negotiations and
proceedings with respect to such notices and demands. The Company shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands.  Prior to the Effective
Time, the Company shall establish an escrow account with a financial
institution and the Company shall fund such escrow account with cash or cash
equivalents in an amount sufficient to make all payments to holders of
Dissenting Shares. Such escrow account shall survive the Merger. All payments
to holders of Dissenting Shares shall be made out of such escrow account, and
no such payments shall be made or otherwise funded by Parent.

     2.6     Protection Against Dilution as to Common Exchange Ratio.  In the
event that Parent subdivides or consolidates the Parent Common Stock or
declares a Common Stock dividend with respect to the Parent Common Stock or
recapitalizes or reclassifies its shares of Common Stock subsequent to the
execution of this Agreement and effective prior to the Closing Date, the
Common Exchange Ratio and type of security shall be proportionately adjusted.

     2.7     Cash Payment.  At the Closing Parent shall deliver checks
totaling $113,100 to the Company's shareholders with the amounts of the checks
to be pro-rata based on the shareholders percentage ownership of the Company.

     2.8     Price Protection.  In the event that the average closing bid
price of the Parent's Common Stock is less than $15.00 anytime during the 20
days prior to December 31, 2000, the Parent agrees to issue to the Company's
shareholders a total of 25,015 shares of the Parent's Common Stock and the
Parent shall simultaneously issue 2,875 shares to Kirk Hanson and 860 shares
to Bill Hartman as additional compensation to them.  In the event of a stock
split or other transaction described in Section 2.6 before December 31, 2000,
these numbers shall be adjusted accordingly.

     2.9     Further Assurances.  Parent agrees that if, at any time after the
Effective Time, the Company considers or is advised that any further deeds,
assignments or assurances are reasonably necessary or desirable to be obtained
from Parent or its officers or directors, to consummate the Merger or to carry
out the purposes of this Agreement at or after the Effective Time, then the
Company,  Parent and their respective officers and directors may executed and

                                       4
<PAGE>

deliver all such proper deeds, assignments and assurances and do all other
things necessary or desirable to consummate the Merger and to carry out the
purposes of this Agreement, in the name of Parent or otherwise.

                                 ARTICLE III
                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as disclosed in Schedule 3 which is attached hereto and
incorporated herein by reference, the Company hereby represents and warrants
to Parent and Merger Sub that:

     3.1     Organization.  The Company is a corporation duly organized,
validly existing, and in good standing under the laws of Colorado, has all
necessary corporate powers to own its properties and to carry on its business
as now owned and operated by it, and is duly qualified to do business and is
in good standing in each of the jurisdictions where its business  makes such
qualification necessary, except for such failures to be so qualified and in
good standing that could not reasonably be expected to have, individually or
in the aggregate, a material adverse effect.

     3.2     Capital.  The authorized capital stock of the Company consists of
10,000 shares of common stock, no par value, of which 1,000 are currently
issued and outstanding.  All of the issued and outstanding shares of common
stock of the Company are duly authorized, validly issued, fully paid, and
nonassessable.  There are no outstanding subscriptions, options, rights,
warrants, debentures, instruments, convertible securities, or other agreements
or commitments obligating the Company to issue or to transfer from treasury
any additional shares of its capital stock of any class.

     3.3     Subsidiaries.  The Company does not have any subsidiaries or own
any interest in any other enterprise (whether or not such enterprise is a
corporation).

     3.4     Directors and Officers.  Schedule 3 contains the names and titles
of all directors and officers of the Company as of the date of this Agreement.

     3.5     Financial Statements.  The Company has delivered to Parent
unaudited balance sheets and statements of operations for the year ended
December 31, 1999, and for the three months ended March 31, 2000 (the
"Financial Statements").  The Financial Statements are complete and correct in
all material respects and have been prepared on a consistent basis throughout
the periods indicated.  The Financial Statements accurately set out and
describe the financial condition of the Company as of March 31, 2000.  The
Company believes that its financial statements will be able to be audited in
accordance with Regulation S-B adopted under the Act.

     3.6     Absence of Changes.  Since March 31, 2000, except for changes in
the ordinary course of business which have not in the aggregate been
materially adverse, to the best of the Company's knowledge, the Company has
conducted its business only in the ordinary course and has not experienced or
suffered any material adverse change in the condition (financial or
otherwise), results of operations, properties, business or prospects of the
Company or waived or surrendered any claim or right of material value.

                                       5
<PAGE>

     3.7     Absence of Undisclosed Liabilities.  Neither the Company nor any
of its properties or assets are subject to any material liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, that are not reflected in the financial
statements presented to Parent.

     3.8     Tax Returns.  Within the times and in the manner prescribed by
law, the Company has filed all federal, state and local tax returns required
by law, or has filed extensions which have not yet expired, and the Company
believes that it has paid all taxes, assessments and penalties due and
payable.

     3.9     Investigation of Financial Condition.  Without in any manner
reducing or otherwise mitigating the representations contained herein, Parent
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of the Company.  The Company
shall make available to Parent and/or its attorneys all books and records of
the Company.

     3.10     Trade Names and Rights.  The Company does not use any trademark,
service mark, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.

     3.11     Compliance with Laws.  To the best of the Company's knowledge,
the Company has complied with, and is not in violation of, applicable federal,
state or local statutes, laws and regulations (including, without limitation,
any applicable building, zoning or other law, ordinance or regulation)
affecting its properties or the operation of its business, except for matters
which would not have a material affect on the Company or its properties.

     3.12     Litigation.  The Company is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or, to the best knowledge of the Company, threatened
against or affecting the Company or its business, assets or financial
condition, except for matters which would not have a material affect on the
Company or its properties.  The Company 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 applicable to it.

     3.13     Authority.  The Company has full corporate power and authority
to enter into this Agreement.  The board of directors of the Company has taken
all action required to authorize the execution and delivery of this Agreement
by or on behalf of the Company and the performance of the obligations of the
Company under this Agreement.  No other corporate proceedings (other than the
filing and recordation of the Articles of Merger as required by the Colorado
Corporation Law) on the part of the Company are necessary to authorize the
execution and delivery of this Agreement by the Company in the performance of
its obligations under this Agreement.  This Agreement is, when executed and
delivered by the Company, and will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by general principles of equity,
bankruptcy, insolvency, moratorium  and similar laws relating to creditors'
rights generally.

                                       6
<PAGE>

     3.14     Ability to Carry Out Obligations.  Neither the execution and
delivery of this Agreement, the performance by the Company of its obligations
under this Agreement, nor the consummation of the transactions contemplated
under this Agreement will to the best of the Company's knowledge:  (a)
materially violate any provision of the Company's articles of incorporation or
bylaws; (b) with or without the giving of notice or the passage of time, or
both, violate, or be in conflict with, or constitute a material default under,
or cause or permit the termination or the acceleration of the maturity of, any
debt, contract, agreement or obligation of the Company, or require the payment
of any prepayment or other penalties; (c) require notice to, or the consent
of, any party to any agreement or commitment, lease or license, to which the
Company is bound; (d) result in the creation or imposition of any security
interest, lien, or other encumbrance upon any material property or assets of
the Company; or (e) violate any material statute or law or any judgment,
decree, order, regulation or rule of any court or governmental authority to
which the Company is bound or subject.

     3.15     Full Disclosure.  None of the representations and warranties
made by the Company herein, or in any schedule, exhibit or certificate
furnished or to be furnished in connection with this Agreement by the Company,
or on its behalf, contains or will contain any untrue statement of material
fact or omits or will omit any material fact required to make any
representation or warranty, in light of the circumstances under which they
were made, not misleading.

     3.16     Assets.  The Company has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any
material liens or encumbrances.

     3.17     Material Contracts and Obligations. Attached hereto on Schedule
3 is a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which the Company is a party or by which it is bound that are
material to the conduct and operations of its business and properties, which
provide for payments to or by the Company in excess of $10,000; or which
involve transactions or proposed transactions between the Company and its
officers, directors, affiliates or any affiliate thereof.  Copies of such
agreements and contracts and documentation evidencing such liabilities and
other obligations have been made available for inspection by Parent and its
counsel.  All of such agreements and contracts are valid, binding and in full
force and effect in all material respects, assuming due execution by the other
parties to such agreements and contracts.

     3.18     Consents and Approvals.  No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by the Company in
connection with: (a) the execution and delivery by the Company of this
Agreement; (b) the performance by the Company of its obligations under this
Agreement; or (c) the consummation by the Company of the transactions
contemplated under this Agreement.

                                  ARTICLE IV
                        REPRESENTATIONS AND WARRANTIES OF
                             PARENT AND MERGER SUB

     Except as disclosed in Schedule 4 which is attached hereto and
incorporated herein by reference, Parent and Merger Sub hereby jointly and
severally represent and warrant to the Company that:

                                       7
<PAGE>

      4.1     Organization and Qualification; Subsidiaries.

            (a)     Each of Parent, Merger Sub and all other subsidiaries of
Parent (the "Parent Subsidiaries") has been duly organized and is validly
existing and in good standing (to the extent applicable) under the laws of the
jurisdiction of its incorporation or organization, as the case may be, and has
the requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals could not reasonably be expected to have, individually
or in the aggregate, a material adverse effect. Parent, Merger Sub and each
other Parent Subsidiary is duly qualified or licensed to do business, and is
in good standing (to the extent applicable), in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that could not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect.

            (b)     Section 4.1 of Schedule 4 sets forth, as of the date of
this Agreement, a true and complete list of each Parent Subsidiary.  Except as
set forth in Section 4.1 of Schedule 4, neither Parent nor any Parent
Subsidiary owns an equity interest in any partnership or joint venture
arrangement or other business entity that is material to the financial
condition, results of operations, business or prospects of Parent and the
Parent Subsidiaries, taken as a whole.

     4.2     Capitalization.  The authorized Common Stock of Parent consists
of 100,000,000 shares of Common Stock of which 8,143,337 are currently issued
and outstanding, all of which are validly issued, fully paid and
nonassessable.  Except as set forth in Schedule 4, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character to which Parent is a party or by which Parent is bound relating to
the issued or unissued Common Stock of Parent, Merger Sub or any other Parent
Subsidiary or obligating Parent, Merger Sub or any other Parent Subsidiary to
issue or sell any shares of Common Stock of, or other equity interests in,
Parent, Merger Sub or any other Parent Subsidiary.  Each outstanding share of
Common Stock of each Parent Subsidiary is duly authorized, validly issued,
fully paid and nonassessable and each such share owned by Parent or another
Parent Subsidiary is free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on Parent's
or such other Parent Subsidiary's voting rights, charges and other
encumbrances of any nature whatsoever, except where the failure to own such
shares free and clear could not reasonably be expected to have, individually
or in the aggregate, a material adverse effect. All outstanding shares of
Merger Sub are owned by Parent.

     4.3     Directors and Officers.  Schedule 4 contains the names and titles
of all directors and officers of Parent and Merger Sub as of the date of this
Agreement.

     4.4     Financial Statements.  Parent has delivered to the Company its
audited balance sheet and statements of operations and cash flows as of and
for the year ended December 31, 1999, and  its unaudited balance sheet and
statements of operations and cash flows as of and for the period ended March
31, 2000 (collectively the "Financial Statements").   The Financial Statements

                                       8
<PAGE>

are complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated. The Financial Statements
accurately set out and describe the financial condition and operating results
of the Company as of the dates, and for the periods, indicated therein.

     4.5     Absence of Changes.  Since December 31, 1999, except for changes
in the ordinary course of business which have not in the aggregate been
materially adverse, to the best of Parent's knowledge, Parent has not
experienced or suffered any material adverse change in its condition
(financial or otherwise), results of operations, properties, business or
prospects or waived or surrendered any claim or right of material value.

     4.6     Absence of Undisclosed Liabilities.  Neither Merger Sub nor
Parent nor any of its properties or assets are subject to any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, that are not reflected in the financial
statements presented to the Company. Merger Sub has not engaged in any
business activities other than as required to consummate the transactions
contemplated by this Agreement.

     4.7     Tax Returns.  Within the times and in the manner prescribed by
law, Parent has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable.

     4.8     Trade Names and Rights.  Except as set forth on Schedule 4,
Parent does not use any trademark, service mark, trade name, or copyright in
its business, or own any trademarks, trademark registrations or applications,
trade names, service marks, copyrights, copyright registrations or
applications.

     4.9     Compliance with Laws.  To the best of Parent's knowledge, Parent
has complied with, and is not in violation of, applicable federal, state or
local statutes, laws and regulations (including, without limitation, any
applicable building, zoning, or other law, ordinance, or regulation) affecting
its properties or the operation of its business or with which it is otherwise
required to comply.

     4.10     Litigation.  There is no legal action, suit, arbitration or
other legal, administrative or other governmental investigation, inquiry or
proceeding (whether federal, state, local or foreign) pending or threatened
against or affecting (i) Parent or any of its subsidiaries or any of their
respective properties, assets or business (existing or contemplated) or (ii)
any employee of Parent or any such subsidiary, before any court or
governmental department, commission, board, bureau, agency or instrumentality
or any arbitrator, except for suits, arbitrations, investigations, inquiries
and proceedings which, if decided adversely to Parent would not a have
material adverse effect on Parent, its operations, assets or prospects.  After
reasonable investigation, neither Parent nor any employee or agent of nor
attorney for Parent is aware of any fact that might result in or form the
basis for any such action, suit, arbitration, investigation, inquiry or other
proceeding.  Neither Parent nor any employee is in default with respect to any
order, writ, judgment, injunction, decree, determination or award of any court
or of any governmental agency or instrumentality (whether federal, state,
local or foreign).

                                       9
<PAGE>

     4.11     No Pending Investigation.  Parent is not aware of any pending
investigations or legal proceedings by the SEC, any state securities
regulatory agency, or any other governmental agency regarding Parent or any
officers or directors of Parent or any shareholders or controlling persons of
such shareholders. There are no outstanding comment letters or other
communications from the Commission (defined below) or from any state
regulatory agency which have requested responses from the Parent or from any
Parent Subsidiary.

     4.12     Authority Relative to this Agreement.  Parent and Merger Sub
have all necessary corporate power and authority to execute and deliver this
Agreement, to perform their respective obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Merger Sub and the consummation by Parent and Merger
Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize
this Agreement or to consummate such transactions (other than the filing and
recordation of the Articles of Merger as required by the Colorado Corporation
Law). This Agreement has been duly executed and delivered by Parent and Merger
Sub and, assuming the due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation of Parent and
Merger Sub, enforceable against Parent and Merger Sub in accordance with its
terms.

     4.13   No Conflict; Required Filings and Consents.

            (a)     The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance by Parent and Merger Sub of their
obligations hereunder and the consummation of the Merger will not, (i)
conflict with or violate any provision of the certificate or articles of
incorporation, as the case may be, or bylaws of Parent or Merger Sub or any
equivalent organizational documents of any other Parent Subsidiary, (ii)
assuming that all consents, approvals, authorizations and permits described in
Section 4.14(b) have been obtained and all filings and notifications described
in Section 4.14(b) have been made, conflict with or violate any Law applicable
to Parent or any other Parent Subsidiary or by which any property or asset of
Parent, Merger Sub or any other Parent Subsidiary is bound or affected or
(iii) except as set forth in Section 4.14(a) of the Schedule 4, result in any
breach of or constitute a default (or an event which with the giving of notice
or lapse of time or both could reasonably be expected to become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on
any property or asset of Parent, Merger Sub or any other Parent Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which could not reasonably be
expected, individually or in the aggregate, (A) to have a material adverse
effect or (B) to prevent or materially delay the performance by Parent or
Merger Sub of its obligations pursuant to this Agreement or the consummation
of the Merger.

            (b)     The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance by Parent and Merger Sub of their
respective obligations hereunder and the consummation of the Merger will not,
require any consent, approval, authorization or permit of, or filing by Parent
or Merger Sub with or notification by Parent or Merger Sub to, any
Governmental Entity, except (i) pursuant to applicable requirements of the
Exchange Act, the Securities Act, Blue Sky Laws, and the filing and
recordation of the Articles of Merger as required by the Colorado Corporation
Law and (ii) where failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, could not reasonably be
expected, individually or in the aggregate, (A) to have a material adverse
effect or (B) to prevent or materially delay the performance by Parent or
Merger Sub of its obligations pursuant to this Agreement or the consummation
of the Merger.

     4.14    Validity of Parent Shares.  The shares of Parent Common Stock to
be delivered pursuant to this Agreement, when issued in accordance with the
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.

     4.15    Full Disclosure. None the representations and warranties made by
Parent in this Agreement, the Schedules and Exhibits to this Agreement
prepared by Parent, any filings made by Parent with the Securities and
Exchange Commission (the "Commission") (including all the exhibits and
appendixes thereto) (the "SEC Documents") contained, contains, or will contain
at the time it was or is so furnished any untrue statement of a material fact
or omitted, omits or will omit at such time to state any material fact
necessary in order to make the statements made herein and therein, in light of
the circumstances under which they were made, not misleading.  Except as
disclosed in any SEC Document filed on EDGAR at least five (5) business days
prior to the date hereof, since March 31, 2000, there has been no material
adverse change and no material adverse development in the business,
properties, operations, condition (financial or otherwise), assets,
liabilities or results of operations or, insofar as can reasonably be
foreseen, prospects of Parent or any of its subsidiaries.  Parent has not
taken any steps, and does not currently expect to take any steps, to seek
protection pursuant to any bankruptcy law nor does Parent or any of its
subsidiaries have any knowledge or reason to believe that their respective
creditors intend to initiate involuntary bankruptcy proceedings.  No event,
liability, development or circumstance has occurred or exists, or is
contemplated to occur, with respect to the Parent or its subsidiaries or their
respective businesses, properties, operations, condition (financial or
otherwise), assets, liabilities or results of operations or, insofar as can
reasonably be foreseen, prospects, that would be required to be disclosed by
Parent under applicable securities laws on a periodic report or current report
filed with the Commission or on a registration statement (including by way of
incorporation by reference) filed with the Commission, on the date this
representation is made or deemed to be made, relating to an issuance and sale
by Parent of the Common Stock and which has not been publicly disclosed.

     4.16    Assets.  Parent has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any liens
or encumbrances except as disclosed in Parent's Financial Statements.

     4.17    Investigation of Financial Condition.  Without in any manner
reducing or otherwise mitigating the representations contained herein, Company
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of the Parent.  The Parent shall
make available to Company and/or its attorneys all books and records of the
Parent.

     4.18    Certain Events.  No current officer or director of Parent or any
Parent Subsidiary, during the past five year period, has been the subject of:

                                       11
<PAGE>

             (1)  a petition filed under the Federal bankruptcy laws or any
other insolvency law or has a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before
the time of such filing or appointment, or any corporation or business
association of which he was an executive officer at or within two years before
the time of such filing or appointment;

             (2)  a conviction in a criminal proceeding or a named subject of
a pending criminal proceeding (excluding traffic violations which do not
relate to driving while intoxicated or driving under the influence);

             (3)  any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from, or otherwise limiting, the following
activities:

                  (i)  Acting as a futures commission merchant, introducing
broker, commodity trading advisory, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the United States
Commodity Futures Trading Commission or an associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance company, or engaging
in or continuing any conduct or practice in connection with such activity;

                  (ii)  Engaging in any type of business practice; or

                  (iii)  Engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any
violation of Federal, state or other securities laws or commodities laws;

             (4)  any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of such
person to engage in any activity described in the preceding sub-paragraph, or
to be associated with persons engaged in such activity;

             (5)  a finding by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission (the "Commission") to have
violated any securities law, regulation or decree and the judgment in such
civil action or finding by the Commission has not been subsequently reversed,
suspected or vacated; or

             (6)  a finding by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding by
the Commodity Futures Trading Commission has not been subsequently reversed,
suspected or vacated.

                                  ARTICLE V
                                  COVENANTS

     5.1     Investigative Rights.  From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and other authorized representatives,
full access during normal business hours and upon reasonable advance written

                                       12
<PAGE>

notice to all of each party's properties, books, contracts, commitments, and
records for the purpose of examining the same.  Each party shall furnish the
other party with all information concerning each party's affairs as the other
party may reasonably request.  If the transaction contemplated hereby is not
completed, all documents received by each party and/or its attorneys and
accountants, auditors or other authorized representatives shall be returned to
the other party who provided same upon request.  The parties hereto, their
directors, employees, agents and representatives shall not disclose any of the
information described above unless such information is already disclosed to
the public or unless as required by legal process, without the prior written
consent of the party to which the confidential information pertains.  Each
party shall take such steps as are necessary to prevent disclosure of such
information to unauthorized third parties.

     5.2     Conduct of Business.  Prior to the Closing, Parent and the
Company shall each conduct its business in the normal course, and shall not
sell, pledge, or assign any assets, without the prior written approval of the
other party, except in the regular course of business or as contemplated in
previously disclosed contractual obligations.  Neither Parent nor the Company
shall amend its Articles of Incorporation or Bylaws, declare dividends, redeem
or sell stock or other securities, incur additional or newly-funded
liabilities, acquire or dispose of fixed assets, consolidate or merge with or
convey all or substantially all of its or of any successor corporation's
property and assets to any other corporation or corporations, change
employment terms, enter into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any balance sheet
receivable for less than its stated amount, pay more on any liability than its
stated amount, or enter into any other transaction other than in the regular
course of business except as otherwise contemplated herein.

     5.3     Plan of Reorganization.  This Agreement is intended to constitute
a "plan of reorganization" within the meaning of Section 1.368-2(g) of the
income tax regulations promulgated under the Code. From and after the date of
this Agreement, each party hereto shall use all reasonable efforts to cause
the Merger to qualify, and shall not, without the prior written consent of the
other parties hereto, knowingly take any actions or cause any actions to be
taken which could reasonably be expected to prevent the Merger from qualifying
as a tax-free reorganization under the provisions of Section 368 of the Code.
In the event that the Merger shall fail to qualify as a tax-free
reorganization under the provisions of Section 368 of the Code, then the
parties hereto agree to negotiate in good faith to restructure the Merger in
order that it shall qualify as tax-free transaction under the Code. Following
the Effective Time, and consistent with any such consent, neither the
Surviving Corporation nor  Parent nor any of their respective affiliates
knowingly and voluntarily shall make any elections under the Code or take any
other action or cause any action to be taken which could reasonably be
expected to cause the Merger to fail to qualify as a reorganization under
Section 368 of the Code.

     5.4     Company 2000 Tax Return.  The parties acknowledge that the
Company's status as a Subchapter S corporation will terminate effective upon
completion of the Closing and that a tax return for the Company's short tax
year, ending with the date of its Subchapter S termination,  will be required
to be filed. The parties agree that the Parent will be responsible for filing
the return in a timely manner at its sole expense but that Ross Bernstein will
cooperate in the preparation of the filing and will be permitted access to all
records relating to the same. Ross Bernstein, in his capacity as the sole
shareholder of the Company until Closing, will be solely responsible for the

                                       13
<PAGE>

amount of income tax owing by him, if any, for all periods preceding the
Closing. The parties agree to make the necessary elections to cause the income
for the Company for the short tax year of the Subchapter S corporation to be
computed by closing its books as of the Closing, i.e., the short tax year
shall reflect only the activity of the Company until the Closing. If at any
time the amount of taxes owed by Ross Bernstein for any period while the
Company is a Subchapter S corporation is challenged by the Internal Revenue
Service, Ross Bernstein shall be entitled to direct the response thereto
although he will reasonably cooperate with the Company in that regard.

                                  ARTICLE VI
                            CONDITIONS TO THE MERGER

     6.1     Conditions to the Obligations of Each Party to Consummate the
Merger.  The obligations of the parties hereto to consummate the Merger, or to
permit the consummation of the Merger, are subject to the satisfaction or, if
permitted by applicable Law, waiver of the following conditions:

             (a)     this Agreement and the Merger shall have been duly
approved by the  requisite vote of stockholders of the Company and of Merger
Sub in accordance with the Colorado Corporation Law;

             (b)     no court of competent jurisdiction shall have issued or
entered any order, writ, injunction or decree, and no other governmental
entity shall have issued any order, which is then in effect and has the effect
of making the Merger illegal or otherwise prohibiting its consummation; and

             (c)     all consents, approvals and authorizations legally
required to be obtained to consummate the Merger shall have been obtained from
all governmental entities, except where the failure to obtain any such
consent, approval or authorization could not reasonably be expected to result
in a change in or have an effect on the business of the Company or Parent that
is materially adverse to the business, assets, liabilities (contingent or
otherwise), condition (financial or otherwise) or results of operations of
Parent and its subsidiaries, taken as a whole.

     6.2     Conditions to the Obligations of the Company.  The obligations of
the Company to consummate the Merger, or to permit the consummation of the
Merger, are subject to the satisfaction or, if permitted by applicable Law,
waiver of the following further conditions:

             (a)     each of the representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true, complete and correct on
and as of the Effective Time as if made at and as of the Effective Time and
the Company shall have received a certificate (in the form attached hereto as
Exhibit C) of the President of Parent and Merger Sub to such effect;

             (b)     Parent and Merger Sub shall have performed or complied in
all material respects with all material agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time and the Company shall have received a certificate (in the form
attached hereto as Exhibit C) of the President of Parent and of Merger Sub to
that effect;

             (c)     Employment Agreements.  Parent and each of Ross Bernstein
and Bill Hartman shall have entered into an employment agreement substantially
in the forms of Exhibit A and B hereto, respectively.

                                       14
<PAGE>

             (d)     Ross Bernstein.  Effective on the Closing, Parent shall
have caused Ross Bernstein to be elected as Vice President and a director of
Storage Area Networks, a wholly owned Parent Subsidiary.

             (e)     Compensation.  On or before the completion of the
Closing, Parent shall have delivered to Kirk Hanson and Bill Hartman, as
compensation to them, the following: to Hanson, 11,500 shares of Parent Common
Stock and $13,000 in cash, and  to Hartman, 3,450 shares of Parent Common
Stock and $3,900 in cash.

     6.3     Conditions to the Obligations of Parent.  The obligations of
Parent to consummate the Merger, or to permit the consummation of the Merger,
are subject to the satisfaction or, if permitted by applicable Law, waiver of
the following further conditions:

            (a)     each of the representations and warranties of the Company
contained in this Agreement shall be true, complete and correct on and as of
the Effective Time as if made at and as of the Effective Time and Parent shall
have received a certificate (in the form attached hereto as Exhibit D) of the
Chairman or President and Chief Financial Officer of the Company to such
effect;

            (b)     the Company shall have performed or complied in all
material respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time and Parent shall have received a certificate (in the form attached hereto
as Exhibit D) of the Chairman or President and Chief Financial Officer of the
Company to that effect;

            (c)     there shall not be pending or threatened any action,
proceeding, claim or counterclaim which seeks to or would, or any order,
decree or injunction (whether preliminary, final or appealable) which would,
require Parent to hold separate or dispose of any of the stock or assets of
the Company or the Company Subsidiaries or imposes material limitations on the
ability of Parent to control in any material respect the business, assets or
operations of either Parent or the Company; and

            (d)     The Company shall provide a letter from its auditors
stating that its financial statements for the period from inception through
December 31, 1999, can be audited in accordance with SEC rules and that the
audit can be completed within 75 days after the Closing.

                                  ARTICLE VII
                        TERMINATION, AMENDMENT AND WAIVER

     7.1     Termination.  This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time, notwithstanding any
requisite adoption and approval of this Agreement, as follows:

            (a)     by mutual written consent duly authorized by the boards of
directors of each of Parent and the Company;

                                       15
<PAGE>

            (b)     by either Parent or the Company, if the Effective Time
shall not have occurred on or before June 9, 2000; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement shall have caused, or resulted in, the failure of the Effective Time
to occur on or before such date;

            (c)     by Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement,
or if any representation or warranty of the Company shall have become untrue,
incomplete or incorrect, in either case such that the conditions set forth in
Section 6.3 would not be satisfied (a "Terminating Company Breach"); provided,
however, that if such Terminating Company Breach is curable by the Company
through the exercise of its reasonable efforts within 30 days and for so long
as the Company continues to exercise such reasonable efforts, Parent may not
terminate this Agreement under this Section 7.1(c); and provided further that
the preceding proviso shall not in any event be deemed to extend any date set
forth in paragraph (b) of this Section 7.1;

            (d)     by Company, upon a breach of any representation, warranty,
covenant or agreement on the part of the Parent set forth in this Agreement,
or if any representation or warranty of the Parent shall have become untrue,
incomplete or incorrect, in either case such that the conditions set forth in
Section 6.2 would not be satisfied (a "Terminating Parent Breach"); provided,
however, that if such Terminating Parent Breach is curable by the Parent
through the exercise of its reasonable efforts within 30 days and for so long
as the Parent continues to exercise such reasonable efforts, Company may not
terminate this Agreement under this Section 7.1(d); and provided further that
the preceding proviso shall not in any event be deemed to extend any date set
forth in paragraph (b) of this Section 7.1.

     7.2     Effect of Termination.  In the event of termination of this
Agreement pursuant to Section 7.1, this Agreement shall forthwith become void,
there shall be no liability under this Agreement on the part of any party
hereto or any of its affiliates or any of its or their officers or directors,
and all rights and obligations of each party hereto shall cease.

     7.3     Amendment.  This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective boards of directors at any
time prior to the Effective Time.  This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.

     7.4     Waiver.  At any time prior to the Effective Time, any party
hereto may (a) extend the time for or waive compliance with the performance of
any obligation or other act of any other party hereto or (b) waive any
inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the party or parties
to be bound thereby.

     7.5     Expenses.  All Expenses incurred in connection with this
Agreement and the Merger shall be paid by the party incurring such Expenses,
whether or not the Merger is consummated.

                                     16
<PAGE>

                               ARTICLE VIII
                            GENERAL PROVISIONS

     8.1     Non-survival of Representations and Warranties.  The
representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
7.1, as the case may be. Each party agrees that, except for the
representations and warranties contained in this Agreement and the Disclosure
Schedules, no party hereto has made any other representations and warranties,
and each party hereby disclaims any other representations and warranties made
by itself or any of its officers,  directors, employees, agents, financial and
legal advisors or other representatives, with respect to the execution and
delivery of this Agreement or the Merger contemplated herein, notwithstanding
the delivery or disclosure to any  other party or any party's representatives
of any documentation or other information with respect to any one or more of
the foregoing.

     8.2     Notices.  All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall only be given by
delivery in person, by registered or certified mail (postage prepaid, return
receipt requested) or by a nationally recognized courier service to the
respective parties at their addresses set forth on the signature pages to this
Agreement (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 8.2). Any properly given notice
shall only be deemed given on the date of delivery if delivered in person, two
Business Days after deposit of the notice with the United States Postal
Service if delivered by mail (as used in this Agreement, "Business Day" means
Mondays through Fridays, except for any day on which  regularly scheduled
deliveries of first class mail are not made), or one Business Day after
deposit of the notice with the courier with instructions for next Business Day
delivery.

     8.3     Severability.  If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of Law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Merger is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner
to the fullest extent permitted by applicable Law in order that the Merger may
be consummated as originally contemplated to the fullest extent possible.

     8.4     Assignment; Binding Effect; Benefit.  Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of Law or otherwise) without the
prior written consent of the other parties hereto.  Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Notwithstanding anything contained in this Agreement to the contrary, nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors and permitted
assigns any rights or remedies under or by reason of this Agreement.

                                       17
<PAGE>

     8.5     Incorporation of Exhibits.  The Disclosure Schedules and all
Exhibits attached hereto and referred to herein are hereby incorporated herein
and made a part of this Agreement for all purposes as if fully set forth
herein.

     8.6     Choice of Law.  This Agreement shall be construed and governed by
the laws of the State of Colorado without regard to conflicts of interest
principles.  The parties hereto consent to the jurisdiction of the federal and
state courts located in Denver, Colorado, for any action or suit arising out
of this Agreement, and waive any defense to such jurisdiction, including,
without limitation, any defense based on venue or inconvenient forum.

     8.7     Headings.  The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.

     8.8     Counterparts.  This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

     8.9     Entire Agreement.  This Agreement (including the Exhibits and the
Disclosure Schedules) constitute the entire agreement among the parties with
respect to the subject matter  hereof and supersede all prior agreements and
understandings among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any
party hereto unless made in writing and signed by all parties hereto.

     8.10     Further Assurances.  Each party shall do and perform or cause to
be done or performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other parties may reasonably request in order to carry out the intent and
accomplish the purpose of this Agreement and the consummation of the
transactions contemplated hereby; provided, however, that no party shall be
obligated in any way to do anything that would conflict with, contradict or
otherwise contravene any term or condition set forth prior to this Section
8.10.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

     AGREED TO AND ACCEPTED as of the date first above written.

SAN Holdings, Inc.                 Value Technology, Inc.

By /s/ L. W. Buxton                By /s/ Ross Bernstein
   L. W. Buxton, President            Ross Bernstein, President

Value Tech Acquisition
  Corporation

By /s/ L. W. Buxton
   L. W. Buxton, President
                                       18
<PAGE>

<PAGE>
                                  SCHEDULE 3

3.4 Names and Titles of all directors and officers

     Ross Bernstein, President CEO and Secretary

3.17 Material Contracts and Obligations

     See attached list.

<PAGE>

                                   SCHEDULE 4

                                SAN Holdings, Inc.
                                   ("Parent")

4.1    Subsidiaries:

       a)     Storage Area Networks - 100% Owned
       b)     CoComp, Inc. - 100% Owned

4.2    Capitalization:

                        Schedule of Warrants and Options
                        Outstanding as of March 31, 2000

                               Number      Date     Exercise
         Warrantholder        of Shares   of Issue    Price    Term

Investors in AAA Offering     500,000     3/1/00     $3.50    120 days
 "        "       "           500,000     3/1/00     $5.00    120 days
CCRI                          100,000     3/1/00     $1.50    2 years
Wilson Rondini                100,000     3/1/00     $1.50    2 years
Mohammed Marafi                25,000     3/1/00     $1.50    2 years
Wilson Benjamin                25,000     3/1/00     $1.50    2 years
Mohammed Marafi             1,000,000     3/22/00    $9.00    9 months to
                            ---------                         21 months
Total Warrants Outstanding  2,250,000
                            =========

                          Number        Date     Exercise
    Option Holder       of Shares     of Issue    Price        Term

Stock Option Plan         240,000       3/9/00     9-1/8       5 years
                        ---------
Total Options
 Outstanding              240,000
                        =========

Total Options and
 Warrants Outstanding   2,490,000
                        =========

<PAGE>

4.4     Directors and Officers of Parent:

          Name                                   Position

     Louis F. Coppage       Chairman of the Board

     L.W. Buxton            President, Chief Executive Officer and Director

     Warren Smith           Vice President, Chief Operating Officer and
                            Director

     Cory J. Coppage        Treasurer, Corporate Secretary and Director

     William M. Hipp        Director

     Robert Brooke          Director

     Mishari Marafie          Director

4.12     Legal Proceedings:

         Refer to Item 3 in Parent's Form 10-KSB for the year ended December
31, 1999.

4.20     Material Contracts of Parent:

         Refer to Item 13 in Parent's Form 10-KSB for the year ended December
31, 1999.

<PAGE>

                                  EXHIBIT A
                    Employment Agreement with Ross Bernstein

                             EMPLOYMENT AGREEMENT

     This Employment Agreement is made by and between Storage Area Networks,
Inc., a Nevada Corporation, ("Company" or "SAN") and Ross Bernstein,
("Employee" or "Bernstein").

                                  WITNESSETH:

     Whereas, Bernstein has demonstrated special skill, knowledge, ability,
and experience as a data storage solutions provider for businesses with an
emphasis on serving the financial markets, and because of these qualities, SAN
is desirous of entering into an Employment Agreement whereby SAN will employ
the services of Bernstein for a future term of service, subject to the terms
and conditions herein set forth.

     I.     Term.  The term of this Agreement shall be for a period of two (2)
years commencing  (the "Commencement Date") on the later to occur of the
completion of any sale, merger or dissolution of the Company, or  May 31,
2000, and terminating two (2) years thereafter.  This agreement shall only be
terminated in accordance with the provisions of Paragraph IV  (four) of this
Agreement.

     II.     Duties.  Effective on the Commencement Date and so long as this
Agreement remains in effect, Bernstein shall serve as Vice President Sales,
Financial Institutions, and Director of SAN.  Bernstein agrees to devote his
primary time and attention to his duties of the Company, which duties may be
augmented or restricted in accordance with the directives of the Board of
Directors of SAN, consistent with the position of Vice President Sales,
Financial Institutions.  Bernstein represents and warrants that he is free to
accept this employment and will exercise his best efforts in good faith with
respect to his employment hereunder.

     III.     Compensation.

              A.     Employee shall be paid an annualized base salary of
$130,200 and 5.0 % of the Gross Margin of his division's sales.  These amounts
shall be payable bi-weekly. As used in this Agreement, the "division" means
the financial vertical market.

              B.     In addition, Employee shall be paid commission based on a
percentage of Gross Margin generated by his personal sales.  The commission
shall be computed as 17 % of gross margin (Gross Margin means gross revenues
less cost of products, labor purchased from vendor, standard costs of internal
labor applied to sale, and a .005 % marketing allocation.).  Should gross
margin from Employee's annual sales on a calendar year basis exceed
$500,000.00, the commission rate for the increment exceeding $500,000.00 will
be increased to 20%.  For any partial calendar year during which this
Agreement is in effect, the amount of sales shall be annualized for purposes
of the preceding sentence.  Employee shall be given access at all reasonable
times to the records of the Company which form the basis for the calculation
of commission amounts payable to Employee.

<PAGE>

             C.     During the term of this Agreement, the Employee may be
eligible to participate in performance bonuses and any qualified or
non-qualified stock option plans of SAN Holdings, Inc. as established by the
Compensation Committee of the Board of Directors of SAN Holdings, Inc. Stock
Option Incentives authorized for Employee pursuant to this agreement are as
follows:

                    C-1.     Signing Bonus.  Pursuant to the terms of SAN
Holdings, Inc. 2000 Stock Option Plan providing stock option incentives to key
employees of the Company and upon signing of this Agreement, Bernstein will be
issued 15,000 options for purchase of common shares of SAN Holdings, Inc. at a
price equal to the closing bid price of the stock on the date of closing of
the Agreement and Plan of Merger and Reorganization between SAN and Value
Technology, Inc.  One half of these options shall vest at the end of the first
year of this Agreement and the remaining one half shall vest at the end of the
second year of this Agreement.

                    C-2.     Annual Stock Option.   In addition to the above,
Bernstein shall be eligible to receive an annual stock option for the exercise
of common shares as established by the Compensation Committee of the Board of
Directors of SAN Holdings, Inc.  The options shall be exercisable at 100% of
the fair market value of the common stock on the date of grant.

     IV.     Expenses. Subject to the Company's written employee expense
reimbursement policy, the Employee shall be entitled to reimbursement for all
reasonable expenses necessarily incurred by him in the performance of his
duties upon presentation of a voucher indicating the amount and business
purpose and supported by appropriate documentation.  In addition, the Employee
shall receive a monthly car expense of $400.00.

     V.     Benefits.  The Employee shall be eligible to participate in all of
the Company's health and welfare benefit programs.  He shall be entitled to
vacation annually according to the Company's vacation policy, the timing of
which shall be agreed upon between the Employee and the Board of Directors of
SAN.

     VI.     Termination.  Notwithstanding any provision of the foregoing
contract, the Employee may be discharged only for Cause by the Board of
Directors of the Company (as described with specificity in writing and
delivered to Employee on or before the time of termination) at any time during
the period of employment provided for in this Agreement.

             A.     "Cause" shall mean a material breach of the terms of this
Agreement, including: (a) conviction of a felony involving moral turpitude;
(b) theft from the Company or any of its customers; (c) Intentionally left
blank; (d) willful failure or refusal to carry out the policies of the Company
or any order or directive of the Board of Directors of the Company; or (e) the
failure by the Employee to perform all of the material duties and to comply
with the material terms and conditions required of him under this Agreement.

             B.     If the Employee is discharged for cause, or voluntarily
leaves the employ of the Company during the period of active employment
specified herein, then and in any such event, all subsequent compensation
required to be paid by the Company to the Employee shall be forfeited, and
this contract and the rights of the parties shall terminate.

                                     2
<PAGE>

             C.     In the event the Company otherwise terminates the
Employee's employment, the Company shall be obligated to pay Employee, as a
lump sum severance payment, an amount equal to two times the Employee's annual
salary, payable in cash or, at the Employee's option, in shares, within thirty
(30) days of such termination. As used in this paragraph, the "annual salary"
shall be computed by adding (i) $130,200, as it may be increased from time to
time, to (ii) the total amount of commissions under Sections IIIA and IIIB
payable to Employee for the twelve month period preceding the termination
date. If this Agreement has not been in effect for a full twelve months
preceding the termination date, then the amount of commissions payable to
Employee for the period from the commencement of this Agreement through the
termination date shall be converted into an annualized figure for purposes of
computing the annual salary. If Employee elects to take shares instead of
cash, the number of shares shall be computed by (iii) calculating the price
per share which shall be equal to the average closing bid price during the
twenty trading days immediately preceding the termination date, and (iv)
dividing the amount of the severance payment by the price per share.
Notwithstanding any provision of this paragraph to the contrary, in no event
shall the amount of the severance payment be less than $260,400.

     VII.     Arbitration.  All disputes, differences, or questions arising
between the parties hereto relating to construction, price, meaning, or effect
of any cause or thing contained herein, or the rights or liabilities of the
parties respectively, or their respective successors and assigns, shall be
referred to arbitration between the parties hereto, one arbitrator to be
appointed by each party, and the arbitrators so chosen, if by themselves
unable to agree within ten days after their appointment, choose an additional
arbitrator, without delay, and the decision in writing signed by a majority of
such arbitrators shall be binding upon the parties hereto and may be enforced
by any court of competent jurisdiction.  The  procedure for the arbitrators
shall conform to the procedures of the American Arbitration Association unless
otherwise agreed to by the parties in writing.  The unsuccessful party in the
arbitration shall pay the expenses/costs related thereto

     VIII.     Notice.  Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if sent by certified or
registered mail, return receipt requested

     IX.     Rules of Construction.

             1.     Entire Agreement. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
supercedes all negotiations, prior agreements and contemporaneous agreements,
discussions and understandings of the parties in connection with the subject
matter hereof.

             2.     Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.  Venue and
Jurisdiction shall be in Denver County, Colorado.

             3.     Amendments.  No change, modification or termination of any
of the terms, provisions or conditions of this Agreement shall be effective
unless made in writing and signed by all parties hereto, their successors or
assigns.

             4.     Binding Effect on Successors and Assigns.  This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, personal representatives, heirs and assigns.

                                      3
<PAGE>

             5.     Disclosure.  Employee agrees not to disclose the terms of
this Agreement to anyone during the term of this agreement except as required
by law without the express written consent of SAN.

             6.     Severability.   If any Article, or other provision of this
Agreement, or the application thereof, is held to be invalid, illegal, or
unenforceable in any respect or for any reason, the remainder of this
Agreement, and the application of the Article, Section or Provision to a
person or circumstance with respect to which it is valid, legal or
enforceable, shall not be affected thereby.

     IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement below, as of this 20th day of June, 2000.

THE COMPANY:                          THE EMPLOYEE:

STORAGE AREA NETWORKS                 ROSS BERNSTEIN

By:/s/ L. W. Buxton                   By: /s/ Ross Bernstein
   L.W. "Buck" Buxton, President          Ross Bernstein
   and CEO

                                     4
<PAGE>

                                   EXHIBIT B
                      Employment Agreement with Bill Hartman

<PAGE>

                                   EXHIBIT C
                      Certificate from Parent and Merger Sub

                             CERTIFICATE OF OFFICERS

     The undersigned hereby certifies that:

     1.     He is the duly elected President of SAN Holdings, Inc., a Colorado
corporation (the "Parent"), and Value Tech Acquisition Corporation, a Colorado
corporation ("Merger Sub").

     2.     The representations and warranties of the Parent and Merger Sub
under the Agreement and Plan of Merger and Reorganization dated as of June 19,
2000, by and among the Parent, Merger Sub and Value Technology, Inc. (the
"Agreement"), are true and correct in all material respects as of the date
hereof as if made on the date hereof; and

     3.     The Parent and Merger Sub have performed and complied in all
material respects with all agreements and conditions required by the Agreement
to be performed or complied with by them on or prior to the date hereof.

     IN WITNESS WHEREOF, the undersigned have executed this Certificate this
19th day of June 2000.

                              SAN Holdings, Inc.

                              By:/s/ L. W. Buxton
                                 L.W. Buxton, President

                              VALUE TECH ACQUISITION CORPORATION

                              By:/s/ L.W. Buxton
                                 L. W. Buxton, President

<PAGE>
                                   EXHIBIT D
                            Certificate from Company

                             CERTIFICATE OF OFFICER

     The undersigned hereby certifies that:

     1.     He is the duly elected President and CEO of Value Technology,
Inc., a Colorado corporation (the "Company").

     2.     The representations and warranties of the Company under the
Agreement and Plan of Merger and Reorganization dated as of June 19, 2000, by
and among the SAN Holdings, Inc., Value Tech Acquisition Corporation and the
Company (the "Agreement"), are true and correct in all material respects as of
the date hereof as if made on the date hereof; and

     3.     The Company has performed and complied in all material respects
with all agreements and conditions required by the Agreement to be performed
or complied with by it on or prior to the date hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate this
19th day of June 2000.

                              Value Technology, Inc.

                              By:/s/ Ross Bernstein
                                 Ross Bernstein, President

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