AGREEMENT AND PLAN OF REORGANIZATION


                                  by and among

                                 EUROMED, INC.,

                           REDSTONE ACQUISITION CORP.

                                       and

                            REDSTONE SECURITIES, INC.
















                             September ______, 1998


<PAGE>


                                TABLE OF CONTENTS
                                   (Continued)

                                                                       


                                TABLE OF CONTENTS   
<TABLE>
<S>                                                                                                            <C>       

ARTICLE 1                                                                                                      Page
     THE MERGER...................................................................................................1
1.1  The Merger    ...............................................................................................1
1.2  Closing       ...............................................................................................1
1.3  Effective Time of the Merger.................................................................................1

ARTICLE 2
     THE SURVIVING CORPORATION....................................................................................2
2.1  Articles of Incorporation....................................................................................2
2.2  Bylaws        ...............................................................................................2
2.3  Directors and Officers of the Surviving Corporation..........................................................2

ARTICLE 3
     CONVERSION OF SHARES.........................................................................................2
3.1  Conversion of Shares.........................................................................................2
3.2  Exchange of Stock Certificates; Payment of Cash Consideration................................................3
3.3  No Further Rights in Company Common Stock....................................................................5

ARTICLE 4
     REPRESENTATIONS AND WARRANTIES OF
     THE ACQUIROR AND THE MERGER SUB..............................................................................5
4.1  Organization  ...............................................................................................5
4.2  Capitalization and Ownership of the Acquiror.................................................................5
4.3  Certain Corporate Matters....................................................................................6
4.4  Subsidiaries. ...............................................................................................6
4.5  Authority Relative to this Agreement.........................................................................6
4.6  Consents and Approvals; No Violations........................................................................6
4.7  Reports and Financial Statements.............................................................................7
4.8  Events Subsequent to Financial Statements....................................................................8
4.9  Tax Returns and Audits.......................................................................................9
4.10               Property.......................................................................................9
4.11               Tangible Property.............................................................................10
4.12               Inventory.....................................................................................10
4.13               Licenses and Permits..........................................................................10
4.14               Assets Necessary to the Business..............................................................10
4.15               Books and Records.............................................................................10
4.16               Product Liability.............................................................................10
4.17               Questionable Payments.........................................................................10
4.18               Environmental Matters.........................................................................10
4.19               Equipment.....................................................................................11
4.20               Intellectual Property.........................................................................11
4.21               Insurance.....................................................................................11
4.22               Contracts.....................................................................................11
4.23               Litigation....................................................................................12

                                       ii

<PAGE>


                                TABLE OF CONTENTS
                                   (Continued)

                                                                                                               Page


4.24               Employees.....................................................................................12
4.25               Employee Benefit Plans........................................................................12
4.26               Legal Compliance..............................................................................13
4.27               Broker's Fees.................................................................................13

ARTICLE 5
     REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................................14
5.1  Organization  ..............................................................................................14
5.2  Capitalization and Ownership of the Company.................................................................14
5.3  Certain Corporate Matters...................................................................................14
5.4  Subsidiaries. ..............................................................................................15
5.5  Authority Relative to this Agreement........................................................................15
5.6  Consents and Approvals; No Violations.......................................................................15
5.7  Financial Statements; Liabilities...........................................................................16
5.8  Events Subsequent to Financial Statements...................................................................16
5.9  Tax Returns and Audits......................................................................................17
5.10               Property......................................................................................18
5.11               Tangible Property.............................................................................19
5.12               Licenses and Permits..........................................................................19
5.13               Assets Necessary to the Business..............................................................19
5.14               Books and Records.............................................................................19
5.15               Questionable Payments.........................................................................19
5.16               Environmental Matters.........................................................................19
5.17               Equipment.....................................................................................20
5.18               Intellectual Property.........................................................................20
5.19               Insurance.....................................................................................20
5.20               Contracts.....................................................................................20
5.21               Litigation....................................................................................21
5.22               Employees.....................................................................................21
5.23               Employee Benefit Plans........................................................................21
5.24               Legal Compliance..............................................................................23
5.25               Broker's Fees.................................................................................23

ARTICLE 6
     PRE-CLOSING COVENANTS.......................................................................................23
6.1  Interim Operations of the Company...........................................................................23
6.2  Conduct of the Acquiror.....................................................................................24
6.3  Press Releases..............................................................................................25
6.4  Access to Information and Confidentiality...................................................................26

                                       iii

<PAGE>


                                TABLE OF CONTENTS
                                   (Continued)

                                                                                                               Page


6.6  Merger Sub Stockholder Approval.............................................................................26
6.7  Reasonable Efforts; Consents, Approvals and Waivers.........................................................26

ARTICLE 7
     CLOSING CONDITIONS..........................................................................................27
7.1  Conditions to Obligations of Each Party Under This Agreement.  .............................................27
7.2  Conditions to the Acquiror's Obligations....................................................................27
7.3  Conditions to the Company's Obligations.....................................................................28

ARTICLE 8
     ADDITIONAL AGREEMENTS.......................................................................................28
8.1  Indemnification of the Company's Officers and Directors.  ..................................................28
8.2  Shareholders Fee............................................................................................28
8.3  Release from Guaranties.....................................................................................29
8.4  Equity Subordinated Loans...................................................................................29
8.5  Underwriter's Warrants......................................................................................29
8.6  Excluded Assets.............................................................................................29

ARTICLE 9
     TERMINATION.................................................................................................29
9.1  Termination by Mutual Consent...............................................................................29
9.2  Termination by Either the Acquiror or the Company...........................................................29
9.3  Termination by the Company..................................................................................29
9.4  Termination by the Acquiror.................................................................................30
9.5  Effect of Termination and Abandonment.......................................................................30

ARTICLE 10
     GENERAL PROVISIONS..........................................................................................30
10.1               Expenses......................................................................................30
10.2               Notices.......................................................................................30
10.3               Interpretation................................................................................31
10.4               Severability..................................................................................31
10.5               Miscellaneous.................................................................................31
10.6               GOVERNING LAW.................................................................................32
10.7               Counterparts..................................................................................32
</TABLE>



                                       iv

<PAGE>



                         TABLE OF EXHIBITS AND SCHEDULES


Exhibits

EXHIBIT A                  Form of Employment Agreement

Schedules

SCHEDULE 4.2               Warrants
SCHEDULE 4.6               Consents and Approvals
SCHEDULE 4.7               Reports and Financial Statements
SCHEDULE 4.8               Material Changes
SCHEDULE 4.9               Tax Returns and Audits
SCHEDULE 4.11              Liens
SCHEDULE 4.13              Licenses and Permits
SCHEDULE 4.15              Books and Records
SCHEDULE 4.16              Product Liability
SCHEDULE 4.20              Intellectual Property
SCHEDULE 4.22              Acquiror Material Contracts
SCHEDULE 4.23              Litigation
SCHEDULE 4.24              Employees
SCHEDULE 4.25              Employee Benefit Plans
SCHEDULE 4.27              Broker's Fees
SCHEDULE 5.2(a)                     Convertible Securities
SCHEDULE 5.2(b)                     List of Stockholders
SCHEDULE 5.3               Jurisdictions in which the Company Operates
SCHEDULE 5.6               Consents and Approvals
SCHEDULE 5.7               Undisclosed Liabilities
SCHEDULE 5.8               Material Changes
SCHEDULE 5.9               Tax Returns and Audits
SCHEDULE 5.10              Real Property
SCHEDULE 5.11              Liens
SCHEDULE 5.12              Licenses and Permits
SCHEDULE 5.17              Equipment
SCHEDULE 5.18              Intellectual Property
SCHEDULE 5.19              Insurance
SCHEDULE 5.20              Material Contracts
SCHEDULE 5.21              Litigation
SCHEDULE 5.22              Employees
SCHEDULE 5.23              Employee Benefit Plans

ANNEX I                             Allocation of Merger Consideration
ANNEX II                            Vesting Restrictions
ANNEX III                           Assets to be Excluded

                                        v

<PAGE>



                      AGREEMENT AND PLAN OF REORGANIZATION

         This  AGREEMENT AND PLAN OF  REORGANIZATION,  dated as of September __,
1998 (this  "Agreement"),  is by and among EUROMED,  INC., a Nevada  corporation
(the "Acquiror"),  REDSTONE  ACQUISITION  CORP., a New Jersey  corporation and a
wholly-owned  subsidiary  of the  Acquiror  (the  "Merger  Sub"),  and  REDSTONE
SECURITIES, INC., a New Jersey corporation (the "Company").

                                    RECITALS

         WHEREAS, the respective Boards of Directors of the Acquiror, the Merger
Sub and the  Company  deem it  advisable  and in the  best  interests  of  their
respective  stockholders  that the Acquiror acquire the Company through a merger
(the  "Merger")  of the Merger Sub with and into the Company  upon the terms and
subject to the conditions of this Agreement;

         WHEREAS,  the parties hereto intend the Merger to qualify as a tax-free
reorganization  under  Section  368(a) of the Internal  Revenue Code of 1986, as
amended (the "Code").

         NOW,  THEREFORE,  in  consideration  of  the  foregoing  premises,  the
representations,  warranties and agreements  herein contained and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, and subject to the conditions set forth herein, the parties hereto
agree as follows:

                                    ARTICLE 1
                                   THE MERGER

         1.1 The Merger.  Subject to the terms and conditions of this Agreement,
at the Effective  Time (as defined in Section 1.3 hereof),  the Merger Sub shall
be merged with and into the Company and the separate corporate  existence of the
Merger Sub shall thereupon cease. The Company (sometimes hereinafter referred to
as the  "Surviving  Corporation")  shall  be the  surviving  corporation  in the
Merger. The Merger shall have the effects set forth in the applicable provisions
of the New Jersey Business Corporation Act (the "Act").

         1.2 Closing. The closing of the Merger (the "Closing") shall take place
at 9:00 a.m.,  Central Standard time, at the offices of Maurice J. Bates,  LLC.,
located at 8214 Westchester, Suite 500, Dallas, Texas 75225 on November 6, 1998,
or as soon as reasonably  practicable  thereafter as the conditions set forth in
Article 7 hereof  have been  satisfied  or waived (the date on which the Closing
occurs being herein referred to as the "Closing Date").

         1.3  Effective  Time of the  Merger.  If all of the  conditions  to the
Merger set forth in  Article 7 hereof  shall  have been  fulfilled  or waived in
accordance  herewith  and this  Agreement  shall  not have  been  terminated  as
provided in Article 9 hereof,  the parties hereto shall cause Articles of Merger
to be filed  with the  Secretary  of State  of the  State of New  Jersey  on the
Closing  Date.  The  Merger  shall be  effective  at the time of  filing  of the
Articles  of Merger  with the  Secretary  of State of the State of New Jersey in
accordance  with the Act or at such later time which the  parties  hereto  shall
have agreed upon and  designated  in such  filing as the  effective  time of the
Merger (the "Effective Time").

                    AGREEMENT AND PLAN OF REORGANIZATION - 1

<PAGE>



                                    ARTICLE 2
                            THE SURVIVING CORPORATION

         2.1 Articles of  Incorporation.  The Articles of  Incorporation  of the
Company  as  in  effect  at  the  Effective   Time  shall  be  the  Articles  of
Incorporation  of  the  Surviving   Corporation  unless  and  until  amended  in
accordance with its terms and as provided by law.

         2.2  Bylaws.  The Bylaws of the  Company as in effect at the  Effective
Time shall be the Bylaws of the Surviving  Corporation  unless and until amended
in accordance with their terms,  the terms of the Articles of  Incorporation  of
the Surviving Corporation or as provided by law.

         2.3      Directors and Officers of the Surviving Corporation.

                  (a) The directors of the Company at the  Effective  Time shall
         be the initial  directors of the Surviving  Corporation  and shall hold
         office from the Effective  Time until their  respective  successors are
         duly elected or appointed and  qualified in the manner  provided in the
         Articles of Incorporation and Bylaws of the Surviving  Corporation,  or
         as otherwise provided by law.

                  (b) The  officers  of the  Company  immediately  prior  to the
         Effective  Time  shall  be  the  initial   officers  of  the  Surviving
         Corporation  and shall hold office from the Effective  Time until their
         respective  successors  are duly elected or appointed  and qualified in
         the manner provided in the Articles of Incorporation  and Bylaws of the
         Surviving Corporation, or as otherwise provided by law.

                                    ARTICLE 3
                              CONVERSION OF SHARES

         3.1      Conversion of Shares.

                  (a) At the Effective Time, by virtue of the Merger and without
         any further  action on the part of the  Acquiror,  the Merger Sub,  the
         Company,  the  Surviving  Corporation,  or any  holder  of  any  equity
         securities of any of them, the following events shall occur:

                           (1) each share of the common  stock,  par value $0.01
                  per share,  of the Merger  Sub issued and  outstanding  at the
                  Effective Time shall continue to be issued and outstanding and
                  shall  represent  the same number of shares of common stock of
                  the Surviving Corporation;

                           (2) the Equity Subordinated Lender Shares (as defined
                  in  Section  8.4) and each  issued  and  outstanding  share of
                  common  stock,  par  value  $.01  per  share,  of the  Company
                  ("Company  Common  Stock"),  that is held in  treasury  by the
                  Company,  held by any  direct or  indirect  subsidiary  of the
                  Company or held by the Acquiror  (collectively,  the "Excluded
                  Shares") shall be canceled,  and no Merger  Consideration  (as
                  hereinafter  defined) shall be delivered in exchange therefor;
                  and

                    AGREEMENT AND PLAN OF REORGANIZATION - 2

<PAGE>



                           (3) each share of  Company  Common  Stock  issued and
                  outstanding at the Effective Time (after  cancellation  of the
                  Excluded  Shares) (the  "Company  Shares")  shall be converted
                  into  the  right  to  receive   that  portion  of  the  Merger
                  Consideration  (as  hereinafter  defined) set forth beside the
                  name of the holders of such Company Shares on Annex I hereto.

                  (b) The "Merger  Consideration" shall consist in the aggregate
         of (and such term shall be defined to mean)  1,100,000  shares of fully
         paid and non-assessable  shares of the common stock, par value $.01 per
         share, of the Acquiror (the "Acquiror Common Stock").  A portion of the
         Merger  Consideration  equal to 800,000 shares of Acquiror Common Stock
         (the  "Restricted  Shares")  shall be  issued  subject  to the  vesting
         restrictions described on Annex II hereto.

         3.2      Exchange of Stock Certificates; Payment of Cash Consideration.

                  (a)  Promptly   after  the  Effective   Time,   the  Surviving
         Corporation shall mail to each holder of record of Company Shares (i) a
         letter  of   transmittal   specifying   that   delivery  of  the  stock
         certificates (each, a "Certificate")  representing Company Shares shall
         be effected,  and risk of loss of and title  thereto  shall pass,  only
         upon  delivery  of the  Certificates  (or  affidavits  of  loss in lieu
         thereof) to the Surviving Corporation, such letter of transmittal to be
         in such form and have such other  provisions  as the  Acquiror  and the
         Company  may  reasonably  agree,  and  (ii)  instructions  for  use  in
         effecting the surrender of the  Certificates in exchange for the Merger
         Consideration.  Only upon delivery of a Certificate for cancellation to
         the Surviving  Corporation together with a letter of transmittal,  duly
         executed,  shall the holder of such  Certificate be entitled to receive
         in exchange therefor the Merger Consideration  described in Section 3.1
         hereof,  plus any unpaid non-stock dividends and any other dividends or
         other  distributions that such holder has the right to receive pursuant
         to the  provisions  of  this  Article  3. No  interest  will be paid or
         accrued on any amount  payable upon due surrender of the  Certificates.
         In the event of a transfer by any holder of Company Shares of ownership
         of such Company Shares that is not  registered in the transfer  records
         of the Company,  a certificate  representing  the Merger  Consideration
         payable to such holder,  together with a check payable to the holder of
         such shares for any Fractional  Payment (as hereinafter  defined),  and
         any other dividends or distributions in respect thereof,  may be issued
         and/or paid to such a  transferee  if the  Certificate(s)  representing
         such  Company  Shares  is  presented  to  the  Surviving   Corporation,
         accompanied  by all  documents  required  to  evidence  and effect such
         transfer and to evidence that any applicable  stock transfer taxes have
         been paid. If any certificate for shares of Acquiror Common Stock is to
         be  issued  in  a  name  other  than  that  in  which  the  Certificate
         surrendered in exchange therefor is registered, it shall be a condition
         of such exchange that the person requesting such exchange shall pay any
         transfer  or  other  taxes  required  by  reason  of  the  issuance  of
         certificates  of shares of Acquiror  Common  Stock in a name other than
         that of the registered holder of the Certificate surrendered,  or shall
         establish  to  the  satisfaction  of  the  Acquiror  or  the  Surviving
         Corporation  that  such  tax  has  been  paid  or  is  not  applicable.
         Notwithstanding the foregoing or any other provisions of Section 3.1 or
         this  Section 3.2 to the  contrary,  no Merger  Consideration  shall be
         issued in respect of any Company Shares, the holders of which object

                    AGREEMENT AND PLAN OF REORGANIZATION - 3

<PAGE>



         to the  Merger in  writing  and  demand  payment  of the value of their
         shares  pursuant to Article 5.12 of the TBCA, such holders to have only
         the rights provided by the TBCA.

                  (b)  Notwithstanding  anything  herein  to  the  contrary,  no
         certificates or scrip evidencing  fractional  shares of Acquiror Common
         Stock  shall be  issued in  connection  with the  Merger,  and any such
         fractional  share  interests  to which a holder of  record  of  Company
         Shares would otherwise be entitled will not entitle such holder to vote
         or to any rights of a stockholder of the Acquiror.  In lieu of any such
         fractional shares,  each holder of record of Company Shares who but for
         the  provisions  of this Section  3.2(b) would be entitled to receive a
         fractional interest of a share of Acquiror Common Stock pursuant to the
         Merger  shall be paid  cash  (such  distribution  being  such  holder's
         "Fractional Payment"), without any interest thereon, in an amount equal
         to the fraction of a share to which such holder is entitled, multiplied
         by the Average Market Price (as hereinafter  defined).  For purposes of
         this  agreement,  the "Average  Market Price" shall mean the average of
         the daily closing sales price of the Acquiror  Common Stock as reported
         on the "over the counter" market (or other market on which the Acquiror
         Common Stock is traded) over the twenty (20)  consecutive  trading days
         ending on the trading day immediately prior to the Closing Date.

                  (c) All shares of Acquiror  Common Stock to be issued pursuant
         to  the  Merger  shall  be  deemed  issued  and  outstanding  as of the
         Effective  Time. The Acquiror shall not declare or pay any dividends or
         other  distributions  in respect of Acquiror  Common  Stock  during the
         period  beginning  on the date hereof and ending on the  Closing  Date.
         Whenever a dividend or other  distribution  is declared by the Acquiror
         in respect of the Acquiror  Common Stock,  the record date for which is
         at  or  after  the  Effective  Time,  that  declaration  shall  include
         dividends  or other  distributions  in respect  of all shares  issuable
         pursuant to this  Agreement.  No  dividends or other  distributions  in
         respect of the Acquiror Common Stock shall be paid to any holder of any
         unsurrendered Company Share until such Company Share is surrendered for
         exchange in  accordance  with this  Article 3. Subject to the effect of
         applicable laws,  following  surrender of any such Company Share, there
         shall  be  issued  and/or  paid  to  the  holder  of  the  certificates
         representing  whole shares of Acquiror  Common Stock issued in exchange
         therefor,  without  interest,  (A) at the time of such  surrender,  the
         dividends or other distributions with a record date after the Effective
         Time theretofore  payable with respect to such whole shares of Acquiror
         Common Stock and not paid and (B) at the appropriate  payment date, the
         dividends  or other  distributions  payable  with respect to such whole
         shares of Acquiror  Common Stock with a record date after the Effective
         Time but with a payment date subsequent to surrender.

                  (d) After the Effective  Time,  there shall be no transfers on
         the stock transfer books of the Company of the shares of Company Common
         Stock that were outstanding at the Effective Time.

                  (e) In the event any Certificate  shall have been lost, stolen
         or  destroyed,  upon the  making  of an  affidavit  of that fact by the
         person claiming such  Certificate to be lost,  stolen or destroyed and,
         if  required by the  Acquiror,  the posting by such person of a bond in
         customary  amount  as  indemnity  against  any  claim  that may be made
         against it with respect

     (f) In the event that the Acquiror effects a reclassification,  stock split
( including a reverse split), a stock dividend or distribution, recapitalization
subdivision,  or other similar  capital  transaction,  the Merger  Consideration
shall be equitably adjusted.

     3.3 No Further  Rights in Company Common Stock.  As of the Effective  Time,
all shares of Company  Common  Stock  shall no longer be  outstanding  and shall
automatically  be  canceled  and  shall  cease to  exists,  and each  other of a
Certificate as of the Effective Time shall cease to have any rights with respect
thereto,  except the right to recieve the Merger  Consideration,  the Fractional
Payments and distribution or dividends to which such holder is entitled pursuant
to the terms of this Article 3 and applicable law.

                    AGREEMENT AND PLAN OF REORGANIZATION - 4

<PAGE>



         to such Certificate, the Acquiror will issue in exchange for such lost,
         stolen or destroyed Certificate the shares of Acquiror Common Stock and
         cash payable and any unpaid dividends or other distributions in respect
         of Acquiror  Common  Stock  pursuant  hereto upon due  surrender of and
         deliverable  in  respect  of the  Company  Shares  represented  by such
         Certificate pursuant to this Agreement.

                  (f) In the event that the Acquiror effects a reclassification,
         stock  split   (including   a  reverse   split),   stock   dividend  or
         distribution,  recapitalization,  subdivision, or other similar capital
         transaction, the Merger Consideration shall be equitably adjusted.

         3.3 No Further  Rights in Company  Common  Stock.  As of the  Effective
Time,  all shares of Company  Common  Stock shall no longer be  outstanding  and
shall  automatically  be canceled and shall cease to exist, and each holder of a
Certificate as of the Effective Time shall cease to have any rights with respect
thereto,  except the right to receive the Merger  Consideration,  the Fractional
Payments  and the  distribution  or  dividends  to which such holder is entitled
pursuant to the terms of this Article 3 and applicable law.

                                    ARTICLE 4
                        REPRESENTATIONS AND WARRANTIES OF
                         THE ACQUIROR AND THE MERGER SUB

         Each of the  Acquiror and the Merger Sub hereby  jointly and  severally
represents and warrants to the Company as follows:

         4.1  Organization.  Each  of  the  Acquiror  and  the  Merger  Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, and has the requisite corporate power to carry on
its business as now conducted.

         4.2 Capitalization and Ownership of the Acquiror. The entire authorized
capital stock of the Acquiror  consists of 20,000,000  shares of Acquiror Common
Stock,  and 5,000,000 shares of preferred stock, par value $.01 per share. As of
November  1, 1998,  3,207,000  shares of Acquiror  Common  Stock were issued and
outstanding  (1,800,000 of which are held in escrow in The  Netherlands  and are
being  delivered to the Acquiror for  cancellation).  As of the date hereof,  no
shares of the  Acquiror's  preferred  stock are  issued and  outstanding.  As of
September  1, 1998,  (a) stock  options to acquire no shares of Acquiror  Common
Stock (the "Acquiror  Stock  Options") were  outstanding  under all stock option
plans of the Acquiror and 300,000 shares of Acquiror  Common Stock were reserved
for  issuance  pursuant  to all  stock  option  plans of the  Acquiror,  and (b)
warrants to acquire  300,000 shares of Acquiror  Common Stock were  outstanding,
which warrants are held by the persons  listed on Schedule 4.2 hereto,  together
with a description of the terms of all such warrants. All issued and outstanding
shares of Acquiror Common Stock are validly issued, fully paid and nonassessable
and free of preemptive  rights.  Except as described above, the Acquiror has not
reserved  any  shares  of its  capital  stock  for  issuance,  nor are there any
outstanding  stock option rights,  phantom equity or similar rights,  contracts,
arrangements  or  commitments  based  upon  the  book  value,  income  or  other
attributes of the Acquiror.  There are no voting trusts or any other  agreements
or  understandings  with respect to the voting of the Acquiror's  capital stock.
There are

                    AGREEMENT AND PLAN OF REORGANIZATION - 5

<PAGE>



no contracts or other  obligations to restructure or  recapitalize  the Acquiror
and no  outstanding  contracts,  arrangements  or commitments of the Acquiror to
repurchase, redeem or otherwise acquire any of its equity securities. All shares
of Acquiror Common Stock issuable as part of the Merger  Consideration  will be,
when so issued, duly authorized,  validly issued,  fully paid and nonassessable.
The  authorized  capital  stock of the Merger Sub  consists  of 1,000  shares of
Common  Stock,  par value $0.01 per share,  all of which are validly  issued and
outstanding, fully paid and nonassessable and are owned by the Acquiror.

         4.3  Certain  Corporate  Matters.  The  Acquiror  is duly  licensed  or
qualified  to do business as a foreign  corporation  and is in good  standing in
each  jurisdiction in which the ownership of its  properties,  the employment of
its  personnel or the conduct of its  business  requires it to be so licensed or
qualified, except where such failure would not have a material adverse effect on
the  Acquiror's  financial  condition,  results of operations  or business.  The
Acquiror has full corporate power and authority and all material authorizations,
licenses  and permits  necessary to carry on the business in which it is engaged
and to own and use the properties owned and used by it. Neither the Acquiror nor
the Merger Sub is in  default  under or in  violation  of any  provision  of its
Articles of Incorporation or Bylaws. To the best of its knowledge,  the Acquiror
is not in material default or in material  violation of any  restriction,  lien,
encumbrance, indenture, contract, lease, sublease, loan agreement, note or other
obligation  or  liability  by which it is bound or to which any of its assets is
subject.

         4.4 Subsidiaries.  Except for the Merger Sub, the Acquiror does not own
more than 50% of the voting stock or other equity interests of any entity. As of
the date of this Agreement,  the Merger Sub was in formation and is being formed
solely  for the  purpose  of  effecting  the  Merger.  The Merger Sub has had no
operations  since its inception.  The Merger Sub does not have, and  immediately
prior to the Closing of the Merger will not have,  any assets or  liabilities or
obligations other than cash paid by the Acquiror to the Merger Sub in the amount
of  $1,000.00 in payment for the shares of common stock of the Merger Sub issued
to the Acquiror.

         4.5 Authority Relative to this Agreement.  Each of the Acquiror and the
Merger Sub has the corporate  power and  authority to enter into this  Agreement
and to  carry  out  its  obligations  hereunder.  The  execution,  delivery  and
performance  of  this  Agreement  by the  Acquiror  and the  Merger  Sub and the
consummation by the Acquiror and the Merger Sub of the transactions contemplated
hereby have been duly  authorized by the Boards of Directors of the Acquiror and
the Merger Sub, and by the Acquiror as the sole  shareholder  of the Merger Sub,
and, except for the authorization of the shareholders of the Acquiror,  no other
corporate  action on the part of the Acquiror or the Merger Sub are necessary to
authorize this Agreement or the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by each of the Acquiror and the
Merger Sub and constitutes a valid and binding agreement of each of the Acquiror
and the Merger  Sub,  enforceable  against  the  Acquiror  and the Merger Sub in
accordance  with  its  terms,  except  as such  enforcement  may be  limited  by
bankruptcy,  insolvency  or other  similar laws  affecting  the  enforcement  of
creditors' rights generally or by general principles of equity.

         4.6  Consents  and  Approvals;  No  Violations.  Except for  applicable
requirements of the Securities Act of 1933, as amended (the  "Securities  Act"),
the Securities  Exchange Act of 1934 (as amended,  the "Exchange Act"), state or
foreign laws relating to takeovers, if applicable, state

                    AGREEMENT AND PLAN OF REORGANIZATION - 6

<PAGE>



securities or blue sky laws,  and the filing and  recordation of the Articles of
Merger as required by the TBCA,  no filing with,  and no permit,  authorization,
consent or  approval  of, any public  body or  authority  is  necessary  for the
consummation by the Acquiror or the Merger Sub of the transactions  contemplated
by this  Agreement.  Neither the execution and delivery of this Agreement by the
Acquiror or the Merger Sub nor the  consummation  by the  Acquiror or the Merger
Sub of the transactions  contemplated  hereby, nor compliance by the Acquiror or
the Merger Sub with any of the  provisions  hereof,  will  require any  consent,
approval or notice  under,  or result in a material  violation  or breach of, or
materially  conflict  with or  constitute a material  default (or an event that,
with  notice or lapse of time or both,  would  constitute  a  material  default)
under,  or permit the termination of, or result in the creation or imposition of
any lien,  charge or encumbrance upon any properties,  assets or business of the
Acquiror or the Merger Sub under any note, bond,  indenture,  mortgage,  deed of
trust, lease, franchise, permit, authorization, license, contract, instrument or
other  agreement  or  commitment  or any order,  judgment or decree to which the
Acquiror or the Merger Sub is a party or by which the Acquiror or the Merger Sub
or any of their respective assets or properties are bound or encumbered,  except
those that have  already  been  given,  obtained  or filed,  all as set forth on
Schedule 4.6 hereto. Neither the execution and delivery of this Agreement by the
Acquiror or the Merger Sub, nor the  consummation  by the Acquiror or the Merger
Sub of the transactions  contemplated  hereby, nor compliance by the Acquiror or
the Merger Sub with any of the  provisions  hereof,  will (i)  conflict  with or
result in any breach of any  provisions  of the  Articles  of  Incorporation  or
Bylaws (or similar organizational  documents) of the Acquiror or the Merger Sub,
or (ii) violate in any  material  respect any existing  judgment,  order,  writ,
injunction,  decree,  statute,  rule or regulation applicable to the Acquiror or
the Merger Sub or any of their properties or assets.

         4.7      Reports and Financial Statements.

                  (a) Except as set forth on Schedule  4.7 hereto,  the Acquiror
         has filed all reports, schedules, forms, statements and other documents
         required to be filed with the Securities and Exchange  Commission  (the
         "SEC") pursuant to the Exchange Act since March 19, 1996 (collectively,
         the  "Acquiror SEC  Documents").  The Acquiror SEC  Documents,  and any
         reports,  forms and documents  filed by the Acquiror with the SEC after
         the date hereof,  as amended,  complied,  or will  comply,  as of their
         respective  dates,  as to  form  in  all  material  respects  with  the
         requirements of the Securities Act or the Exchange Act, as the case may
         be, and the rules and  regulations  of the SEC  promulgated  thereunder
         applicable to the Acquiror SEC Documents, and except to the extent that
         information  contained in any Acquiror SEC Document has been superseded
         by a later filed Acquiror SEC Document,  none of such SEC Documents, as
         of their respective dates, contained any untrue statement of a material
         fact or omitted to state a material fact required to be stated  therein
         or necessary in order to make the statements  therein,  in light of the
         circumstances under which they were made, not misleading.

                  (b) The consolidated  balance sheets and related  consolidated
         statements  of income,  stockholders'  equity and cash  flows,  and the
         related  notes of the  Acquiror as of and for the years ended  December
         31, 1997 and 1996 (the "Acquiror  Audited  Financial  Statements") have
         been  audited  by  Killman,   Murrell  &  Company,   P.C.,  independent
         accountants,  in accordance with generally accepted auditing standards.
         The Acquiror

                    AGREEMENT AND PLAN OF REORGANIZATION - 7

<PAGE>



         Audited  Financial   Statements  and  the  balance  sheet  and  related
         statement of income,  stockholders'  equity and cash flow as of and for
         the six  month  period  ended  June 30,  1998  (the  "Acquiror  Interim
         Financial Statements," and together with the Acquiror Audited Financial
         Statements,  the  "Acquiror  Financial  Statements")  included  in  the
         Acquiror SEC Documents  have been  prepared in  accordance  with United
         States  generally  accepted  accounting  principles  applied on a basis
         consistent  with prior  periods,  and present  fairly the  consolidated
         financial  position  of the  Acquiror  at such dates and the results of
         operations  and cash flows for the periods then ended,  except,  in the
         case of the Acquiror Interim Financial Statements, as permitted by Rule
         10-01 of  Regulation  S-X of the SEC.  The Acquiror  Interim  Financial
         Statements   reflect  all  adjustments   (consisting  only  of  normal,
         recurring  adjustments)  that are necessary for a fair statement of the
         results for the interim periods presented therein.  Except as set forth
         in the Acquiror Interim Financial Statements or on Schedule 4.7 hereto,
         neither the Acquiror  nor the Merger Sub,  nor any of their  respective
         assets,  are subject to any liability,  commitment,  debt or obligation
         (of any kind whatsoever whether absolute or contingent, accrued, fixed,
         known,  unknown,  matured or  unmatured)  ("Undisclosed  Liabilities"),
         except (i) as and to the extent  reflected on the Acquiror's  unaudited
         balance sheet as of June 30, 1998, or (ii) as may have been incurred or
         may have arisen since June 30, 1998 in the ordinary course of business,
         or (iii) that,  individually or in the aggregate,  have not had and are
         not  reasonably  likely  to  have  a  material  adverse  effect  on the
         financial condition,  results of operations or business of the Acquiror
         or the  Merger  Sub taken as a whole  (an  "Acquiror  Material  Adverse
         Effect").

                  (c)  Except  as set forth on  Schedule  4.7  hereto,  the most
         recent balance sheet of the Acquiror  included in the Acquiror  Interim
         Financial  Statements includes  appropriate  reserves for all taxes and
         other liabilities incurred as of such date but not yet payable.

         4.8 Events Subsequent to Financial  Statements.  Except as disclosed in
the Acquiror  Financial  Statements  or on Schedule  4.8 hereto,  since June 30,
1998, there has not been:

     (a) Any material  adverse  change in the  financial  condition,  results of
operations or business of the Acquiror;

                  (b) Any sale,  lease,  transfer,  license or assignment of any
         assets,  tangible or  intangible,  of the  Acquiror,  other than in the
         ordinary course of business;

                  (c) Any damage,  destruction or property loss,  whether or not
         covered by insurance, affecting adversely and materially the properties
         or business of the Acquiror;

                  (d)  Any  declaration  or  setting  aside  or  payment  of any
         dividend or distribution with respect to the shares of capital stock of
         the Acquiror or any  redemption,  purchase or other  acquisition of any
         such shares;

                  (e) Any subjection to any lien,  pledge,  security interest or
         other  encumbrance  (each, a "Lien") on any of the assets,  tangible or
         intangible,  of the  Acquiror(other  than Liens arising by operation of
         law which secure obligations which are not yet due and payable);

                    AGREEMENT AND PLAN OF REORGANIZATION - 8

<PAGE>



                  (f) Any incurrence of  indebtedness or liability or assumption
         of  obligations  by the Acquiror  other than (i) those  incurred in the
         ordinary  course of business,  and (ii) those incurred in the course of
         negotiating, documenting and consummating the transactions contemplated
         by this Agreement;

                  (g) Any cancellation or compromise by the Acquiror of any debt
         or  claim,  except  for  adjustments  made in the  ordinary  course  of
         business which, in the aggregate, are not material;

     (h) Any  waiver or  release by the  Acquiror  of any right of any  material
value;

                  (i) Any sale, assignment, transfer or grant by the Acquiror of
         any  rights  under  any  concessions,   leases,  licenses,  agreements,
         patents, inventions,  trademarks, trade names or copyrights,  except in
         the ordinary course of business;

                  (j)  Any  change  made  or   authorized  in  the  Articles  of
         Incorporation  or Bylaws (or similar  organizational  documents) of the
         Acquiror; or

                  (k)   Any   acceleration,    termination,    modification   or
         cancellation (or threat thereof) by any party of any contract, lease or
         other  agreement or  instrument  to which the Acquiror is a party or by
         which  it is bound  so as to  affect,  materially  and  adversely,  the
         properties or business of the Acquiror.

         4.9 Tax Returns and Audits. Except as set forth on Schedule 4.9 hereto,
the Acquiror has duly and timely filed or duly and timely caused to be filed, or
will file or cause to be filed,  with the  appropriate  taxing  authorities  all
federal,  foreign,  state and local income,  franchise,  sales,  value added and
property tax returns ("Tax  Returns")  required to be filed prior to the Closing
Date,  including,  but not  limited  to, all Tax  Returns the filing of which is
necessary for the conduct of the Acquiror's  business,  and each such Tax Return
has been or will be prepared in all  material  respects in  compliance  with all
applicable laws and  regulations.  The Acquiror has paid or will pay in a timely
manner all taxes that are shown to be due on such Tax Returns or pursuant to any
assessment  received  by the  Acquiror  from any taxing  authority,  except such
taxes, if any, as are being contested diligently and in good faith. There are no
claims for taxes pending  against the Acquiror nor any threatened  claim for tax
deficiencies against the Acquiror. There exist no actual or, to the knowledge of
the Acquiror,  proposed additional  assessments of taxes by any taxing authority
to  which it is  reasonably  likely  that the  assets  of the  Acquiror  will be
subject.  There are no  outstanding  agreements or waivers that would extend the
statutory period in which a taxing authority may assess or collect a tax against
the Acquiror. There are no Liens for taxes, other than for current taxes not yet
due and payable, upon the assets of the Acquiror.

         4.10 Property.  The Acquiror does not own, directly or indirectly,  any
fee interest in real property.  With respect to each lease of the Acquiror:  (a)
the lease has been validly  executed and  delivered by the Acquiror  and, to the
knowledge  of the  Acquiror,  by the other  party or  parties  thereto  and is a
binding agreement;  (b) the Acquiror is not, and to the Acquiror's knowledge, no
other  party to the lease is in  material  breach or  default,  and no event has
occurred on the part of the Acquiror

                    AGREEMENT AND PLAN OF REORGANIZATION - 9

<PAGE>



or, to the  Acquiror's  knowledge,  on the part of any other party  which,  with
notice or lapse of time,  would  constitute  such a breach or  default or permit
termination,  modification or acceleration  under the lease;  (c) the lease will
continue to be binding in accordance  with its terms following the Closing Date;
(d) the Acquiror has not repudiated and, to the Acquiror's  knowledge,  no other
party to the  lease  has  repudiated  any  provision  thereof;  (e) there are no
disputes, oral agreements or delayed payment programs in effect as to the lease;
and (f) all facilities leased thereunder, taken as a whole, have been reasonably
maintained.

         4.11  Tangible  Property.  The  Acquiror  has good title to, or a valid
leasehold interest in, each item of tangible property, whether real, personal or
mixed,  reflected on its books and records as owned or leased by it,  subject to
no Liens,  except (i) Liens for taxes not yet due and payable;  (ii) mechanics',
carriers',  workmens',  landlord's  statutory  and common  law Liens  either not
delinquent  or being  contested  in good faith;  (iii)  imperfections  of title,
restrictions, variances and easements that do not materially detract from value;
and (iv) Liens listed on Schedule 4.11 hereto.

         4.12     Inventory.  The Acquiror has no inventory.

         4.13  Licenses  and  Permits.  The  Acquiror  has obtained all material
licenses,  product  and  establishment   registrations,   franchises,   permits,
easements,  certificates and consents  necessary to the conduct of its business,
except as provided on Schedule 4.13.

         4.14 Assets Necessary to the Business.  The personal property and other
assets owned or leased by the Acquiror are  sufficient in all material  respects
to carry on the Acquiror's business as presently conducted.  Except as set forth
in Section 4.12 or Section 4.19 hereof,  the tangible  personal  property of the
Acquiror necessary to the operation of the business of the Acquiror,  taken as a
whole,  is fit for the purposes for which they are presently  being used and are
in  reasonably  good  operating  condition  and repair,  ordinary  wear and tear
excepted.

         4.15 Books and  Records.  Except as set forth on Schedule  4.15 hereto,
the books and records of the Acquiror  fairly reflect the  transactions to which
the Acquiror is a party or by which its properties are bound, and such books and
records  are and have been  properly  kept and  maintained,  with the  revenues,
expenses,  assets and liabilities of the Acquiror accurately recorded therein in
all material respects.

         4.16 Product  Liability.  Except as set forth on Schedule  4.16 hereto,
the Acquiror has not given or made any express  warranties to third parties with
respect  to any  products  sold by it except for the  warranties  imposed by the
provisions of applicable law.

         4.17 Questionable Payments. Neither the Acquiror nor, to the Acquiror's
knowledge,  any employee,  agent,  representative or shareholder of the Acquiror
has,  directly or indirectly,  made any bribes,  kickbacks,  illegal payments or
illegal political  contributions  using Acquiror funds or made any payments from
the Acquiror's funds to governmental officials for improper purposes or made any
illegal payments from the Acquiror's funds to obtain or retain business.


                    AGREEMENT AND PLAN OF REORGANIZATION - 10

<PAGE>



         4.18  Environmental  Matters.  There are no material  claims,  actions,
suits, proceedings or investigations pending against or affecting the Acquiror's
business  at law or in equity  before  any  court or  before or by any  federal,
state, municipal or other governmental department,  commission, board, agency or
instrumentality,  relating to environmental matters. The Acquiror is not subject
to any continuing  court or  administrative  order,  writ,  injunction or decree
applicable to the Acquiror's business relating to any environmental  matter. The
Acquiror to its  knowledge is not in material  violation of or in default in any
material respect with regards to any existing statute, regulation,  order, writ,
injunction  or  decree  of any  court  or  federal,  state,  municipal  or other
governmental department,  commission,  board, agency or instrumentality relating
to any environmental matter.

         4.19 Equipment.  All of the Acquiror's  items of equipment,  taken as a
whole,  are (a)  mechanically  sound and in a condition to perform in the manner
needed  for the  operation  of the  Acquiror's  business;  (b) in good  cosmetic
condition;  and  (c)  in  material  compliance  with  all  applicable  statutes,
ordinances and  regulations,  including,  without  limitation,  those related to
safety, in each case ordinary wear and tear excepted.

         4.20 Intellectual Property. Set forth on Schedule 4.20 hereto is a true
and  complete  list  of  all  United  States  and  foreign  patents  and  patent
applications;   all  copyright   registrations   and  applications  to  register
copyrights;  and all trade  name,  trademark,  service  mark,  and  trade  dress
registrations  and  applications  to  register  the same  that are  owned by the
Acquiror or which the Acquiror is licensed to use or under which the Acquiror or
any  Subsidiary   possesses  any  rights  ("Acquiror   Registered   Intellectual
Property").  Schedule 4.20 also lists any  unregistered  copyrights,  common law
trademarks  or service  marks,  or trade  secrets of the  Acquiror("Unregistered
Acquiror  Intellectual  Property").  The Acquiror is not  obligated or under any
liability  whatsoever  to  make  any  payments  by way of  royalties,  fees,  or
otherwise  to any  owner or  licensee  of, or other  claimant  to,  any  patent,
trademark,  service mark, trade name, or other intangible asset, with respect to
the use thereof or in connection  with the conduct of its business or otherwise.
The  Acquiror  has no reason to believe  that there are any  conflicting  rights
which might impair the  Acquiror's use of the Acquiror  Registered  Intellectual
Property or  Unregistered  Acquiror  Intellectual  Property or has  received any
notice of a conflict  with the  asserted  rights of others  with  respect to any
patent, copyright, trade secret, or trademark right that could, singly or in the
aggregate,  materially  and  adversely  affect  the  business  of the  Acquiror,
furthermore,  to the  Acquiror's  knowledge,  no other  persons or entities have
infringed  upon or are  infringing  upon the  Acquiror  Registered  Intellectual
Property or the Unregistered Acquiror Intellectual Property.

         4.21     Insurance.  The Acquiror does not have any insurance.

         4.22 Contracts. (a) Set forth on Exhibit 4.22 is a list of all material
contracts, leases, arrangements and commitments (whether oral or written) of the
Acquiror(collectively,  the "Acquiror Material Contracts").  Except as set forth
in  Schedule  4.22,  the  Acquiror is not a party to or bound or affected by any
contract,  lease,  arrangement or commitment  (whether oral or written) relating
to: (i) the  employment  of any  person  other than  personnel  employed  at the
pleasure  of the  Acquiror  in the  ordinary  course  of  business  at  rates of
compensation  and  on  terms  consistent  with  past  business  practice;   (ii)
collective bargaining with, or any representation of any employees by, any labor
union or association;  (iii) the acquisition of services, supplies, equipment or
other personal property

                    AGREEMENT AND PLAN OF REORGANIZATION - 11

<PAGE>



involving  more than $10,000 or which is not terminable by the Acquiror upon not
more than 30 days' notice without  obligation on the part of the Acquiror;  (iv)
the purchase or sale of real property; (v) distribution, agency or construction;
(vi)  lending or  advancing of funds  (other than  accounts  receivable);  (vii)
borrowing of funds or receipt of credit  (other than accounts  payable);  (viii)
incurring of any obligation or liability (except for the accounts payable); (ix)
the sale of  personal  property;  or (x) any  matter or  transaction  not in the
ordinary course of business of the Acquiror or  inconsistent  with past business
practice of the Acquiror.

         (b) The Acquiror is not in default in any material respect under any of
the Acquiror Material  Contracts,  except as disclosed on Schedule 4.22, and the
Acquiror  Material  Contracts are legal,  valid and binding  obligations  of the
Acquiror,  and to the Acquiror's  knowledge,  the respective parties thereto, in
accordance  with their  terms and,  except to the extent  reflected  in Schedule
4.22, have not been amended; and no defenses,  offsets or counterclaims  thereto
have  been  asserted  nor  has  the  Acquiror  waived  any  substantial   rights
thereunder.

         4.23  Litigation.  Schedule  4.23  hereto  lists  (a) the  name of each
action,  complaint,  petition,  suit  or  other  proceeding,  whether  civil  or
criminal, in law or equity or before any arbitrator or government entity against
the Acquiror and the amount of same;  (b) any instances in which the Acquiror is
subject to any judgment or order (other than orders of general applicability) of
any  court of  quasi-judicial  or  administrative  agency  of any  jurisdiction,
domestic or foreign;  or (c) any  instances in which the Acquiror is a plaintiff
in any  action,  domestic  or foreign,  judicial  or  administrative  in which a
counterclaim against the Acquiror is pending or might be brought.  Except as set
forth on Schedule 5.21,  there are no existing  actions,  suits,  proceedings or
investigations  that  could  result  in  any  material  adverse  change  in  the
condition, financial or otherwise, of the Acquiror, the same being appropriately
reserved against in the Acquiror Financial Statements.  There are no unsatisfied
judgments,  orders  (other  than  orders of general  applicability),  decrees or
stipulations affecting the Acquiror or to which the Acquiror is a party.

         4.24 Employees. The Acquiror has listed on Schedule 4.24 hereto (to the
extent not listed on Schedule 4.22 hereto) and has made available to the Company
true and  complete  copies of: (a) any written  employment  agreements  with any
officer or director of the Acquiror;  and (b) any written  employment  agreement
with any employee of the Acquiror  which by its terms may not be  terminated  by
the  Acquiror at will or which grant  severance  payments.  The Acquiror has not
entered into any similar oral employment agreements. The Acquiror is not a party
to or bound by any  collective  bargaining  agreement.  Except as  disclosed  on
Schedule 4.24, there are no loans or other  obligations  payable or owing by the
Acquiror to any  shareholder,  officer,  director  or  employee of the  Acquiror
(except  salaries  and wages  incurred  and  accrued in the  ordinary  course of
business),  nor are  there any  loans or debts  payable  or owing by any of such
persons to the Acquiror or,  except as  described on Schedule  4.24 hereto,  any
guarantees  by the Acquiror of any loan or obligation of any nature to which any
such person is a party.  The Acquiror  has, in all material  respects,  complied
with all laws and regulations which relate to the employment of labor,  employee
civil rights or equal employment opportunities.  Except as set forth on Schedule
4.24 hereto,  there is no material charge or complaint  actually  pending or, to
the  Acquiror's  knowledge,  threatened  against the  Acquiror  before the Equal
Employment  Opportunity  Commission  or the  Department of Labor or any state or
local agency of similar  jurisdiction  with respect to the Acquiror's  business.
There is no organizational effort

                    AGREEMENT AND PLAN OF REORGANIZATION - 12

<PAGE>



presently  being  made or  threatened  by or on behalf of any labor  union  with
respect to employees of the Acquiror.

         4.25 Employee  Benefit Plans.  The Acquiror has listed on Schedule 4.25
hereto (a) any  nonqualified  deferred or incentive  compensation  or retirement
plans or arrangements,  (b) any qualified retirement plans or arrangements,  (c)
any other employee compensation, severance or termination pay or welfare benefit
plans,  programs or  arrangements,  (d) any  material  employee  benefit  plans,
programs,  or arrangements,  and (e) any related trusts,  insurance contracts or
other funding  arrangements  maintained,  established  or  contributed to by the
Acquiror or any entity  ("Acquiror ERISA  Affiliate")  otherwise  required to be
aggregated with the Acquiror pursuant to the provisions of Sections 414(b), (c),
(m) or (o) of the Code or Section  4001(a)(14) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") within the last six years or to which
the  Acquiror  or any  Acquiror  ERISA  Affiliate  of any of them is a party  or
otherwise is bound ("Acquiror  Employee  Benefit  Plans").  With respect to each
Acquiror  Employee  Benefit Plan for which an annual  report has been filed,  no
material  adverse change has occurred with respect to the matters covered by the
annual report since the date  thereof.  Each of the Acquiror  Employee  Benefits
Plans (i) has been  operated in all  material  respects in  accordance  with its
terms and applicable  provisions of law,  including ERISA and the Code, and (ii)
has not  engaged  in any  "prohibited  transaction"  (as such term is defined in
Section  4975 of the Code or in Section 406 of ERISA)  which  would  result in a
material liability.  Since the enactment of ERISA,  neither the Acquiror nor any
Acquiror  ERISA  Affiliate has  completely or partially  terminated any employee
pension benefit plan (as defined in Section 3(2) of ERISA)  ("Pension  Plan") or
withdrawn  (in  either a total or  partial  withdrawal)  from any  multiemployer
pension plan, as defined in Section 3(37)(A) of ERISA.  There is no suit, action
or proceeding  pending or  threatened  against or affecting or likely to have an
adverse  impact on any Acquiror  Employee  Benefit Plan, and no claims have been
filed against any Acquiror  Employee Benefit Plan, other than routine claims for
benefits in the ordinary  course.  One or more of the Acquiror  Employee Benefit
Plans may be covered by the Consolidated  Omnibus Budget  Reconciliation  Act of
1986  ("COBRA").  If so,  each  such  plan  has  been  operated  in,  and is in,
compliance  with COBRA.  All notices  required to be given under COBRA have been
timely  and  properly  given  in  accordance  with  COBRA,  and  the  rules  and
regulations  promulgated  thereunder,   and  no  employee,  former  employee  or
"qualified  beneficiary" (as defined in COBRA) has any claim or contingent claim
against the Acquiror or any Acquiror ERISA  Affiliate for failure to comply with
COBRA or the rules and regulations promulgated  thereunder.  Schedule 4.25 lists
all persons  currently  eligible for benefits under COBRA. No Acquiror  Employee
Benefit Plan which is not a Pension Plan  provides  for  continuing  benefits or
coverage for any  participant  or beneficiary  thereof after  termination of the
participant's  employment (except as may be required under COBRA and at the sole
expense  of the  participant  or  beneficiary).  Neither  the  Acquiror  nor any
Acquiror ERISA Affiliate of the Acquiror has engaged in a transaction  described
in  Section  4069(a) of ERISA.  Neither  the  Acquiror  nor any  Acquiror  ERISA
Affiliate is subject to withdrawal  liability  (whether  asserted or unasserted)
under Section 4201,  et seq.,  of ERISA.  No employee or former  employee of the
Acquiror will become entitled to any bonus, retirement,  severance, job security
or similar  benefit or enhanced  benefit  (including  acceleration  of an award,
vesting or exercise of an incentive  award) or any fee or payment of any kind as
a result of any of the transactions  contemplated  hereby.  The Acquiror has not
communicated to any employee or former employee any intention or

                    AGREEMENT AND PLAN OF REORGANIZATION - 13

<PAGE>



commitment  to modify any  Acquiror  Employee  Benefit  Plan or to  establish or
implement  any other  employee  or  retiree  benefit  or  compensation  plans or
arrangements.

         4.26 Legal Compliance.  Except as set forth on Schedule 4.23 hereto, no
material  claim has been filed against the Acquiror  alleging a violation of any
applicable law or regulation of any foreign,  federal, state or local government
or any agency thereof.

         4.27  Broker's  Fees.  Except as set  forth on  Schedule  4.27  hereto,
neither  the  Acquiror  nor the Merger Sub,  nor anyone on their  behalf has any
liability to any broker,  finder,  investment  banker or agent, or has agreed to
pay any  brokerage  fees,  finder's  fees or  commissions,  or to reimburse  any
expenses of any broker,  finder,  investment  banker or agent in connection with
the Merger.


                                    ARTICLE 5
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company  hereby  represents  and  warrants to the  Acquiror and the
Merger Sub as follows:

         5.1 Organization.  The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and has
the requisite corporate power to carry on its business as now conducted.

         5.2      Capitalization and Ownership of the Company.

                  (a) The Company's entire authorized  capital stock consists of
         (i) 1,000  shares of Company  Common  Stock,  of which 1,000 shares are
         issued  and  outstanding  and no  shares  are  held  in  treasury.  All
         outstanding  shares of Company  Common Stock have been duly  authorized
         and are validly issued,  fully paid and nonassessable and have not been
         issued in violation of any  preemptive  rights.  Except as set forth in
         Schedule  5.2(a),  there are no outstanding  or authorized  unexercised
         options,  rights, warrants,  calls,  convertible securities,  rights to
         subscribe,  conversion  rights  or other  rights to  acquire  shares of
         Company Common Stock (each, a "Company  Convertible  Security") and the
         Company has not reserved any shares of its capital  stock for issuance,
         nor are there any  outstanding  stock option rights,  phantom equity or
         similar rights,  contracts,  arrangements or commitments based upon the
         book value,  income or other  attributes  of the Company.  There are no
         voting trusts or any other agreements or understandings with respect to
         the voting of the Company's  capital  stock.  There are no contracts or
         other  obligations to restructure  or  recapitalize  the Company and no
         outstanding contracts,  arrangements or commitments,  of the Company to
         repurchase, redeem or otherwise acquire any of its equity securities.

                  (b)  Schedule  5.2(b)  hereto sets forth a true,  accurate and
         complete  list of all  holders of capital  stock of the Company and the
         number of shares of capital  stock held by each such  person  (each,  a
         "Shareholder" and  collectively,  the  "Shareholders").  All securities
         issued by the Company have been issued in compliance,  in all respects,
         with all applicable federal and state securities laws.

                    AGREEMENT AND PLAN OF REORGANIZATION - 14

<PAGE>



         5.3  Certain  Corporate  Matters.  The  Company  is  duly  licensed  or
qualified  to do business as a foreign  corporation  and is in good  standing in
each jurisdiction  specified on Schedule 5.3 hereto, which is every jurisdiction
in which the  character of the  Company's  properties or nature of the Company's
business   requires  it  to  be  so  licensed  or  qualified   other  than  such
jurisdictions in which the failure to be so licensed or qualified would not have
a material adverse effect on its financial  condition,  results of operations or
business.  The Company has full  corporate  power and authority and all material
authorizations, licenses and permits necessary to carry on the business in which
it is  engaged  and to own and use the  properties  owned  and  used by it.  The
Company has delivered to the Acquiror true,  accurate and complete copies of its
Articles of Incorporation and Bylaws,  which reflect all amendments made thereto
at any time prior to the date of this Agreement. The minute books containing the
records of meetings of the  shareholders  and Board of  Directors of the Company
are complete and correct in all material respects. The Company is not in default
under or in violation  of any  provision  of its  Articles of  Incorporation  or
Bylaws. To the best of its knowledge,  the Company is not in material default or
in  material  violation  of  any  restriction,  Lien,  encumbrance,   indenture,
contract, lease, sublease, loan agreement, note or other obligation or liability
by which it is bound or to which any of its assets is subject.

         5.4 Subsidiaries.  The Company does not own more than 50% of the voting
stock or other equity interests of any entity.

         5.5 Authority Relative to this Agreement. The Company has the corporate
power  and  authority  to  enter  into  this  Agreement  and to  carry  out  its
obligations hereunder. The execution, delivery and performance of this Agreement
by the  Company  and  the  consummation  by  the  Company  of  the  transactions
contemplated  by this Agreement have been duly authorized by the Company's Board
of Directors and stockholders,  and no other corporate action on the part of the
Company  is  necessary  to  authorize   this   Agreement  or  the   transactions
contemplated  hereby. This Agreement has been duly executed and delivered by the
Company  and  constitutes  the  valid  and  binding  agreement  of the  Company,
enforceable  against the Company in  accordance  with its terms,  except as such
enforcement  may be limited by  bankruptcy,  insolvency  or other  similar  laws
affecting  the  enforcement  of  creditors'   rights  generally  or  by  general
principles of equity.

         5.6  Consents  and  Approvals;  No  Violations.  Except as set forth on
Schedule 5.6 hereto,  and except for  applicable  requirements  of the rules and
regulations  of the  National  Association  of  Securities  Dealers,  Inc.  (the
"NASD"), the Securities Act, the Exchange Act, state or foreign laws relating to
takeovers,  if applicable,  state securities or blue sky laws and the filing and
recordation  of the Articles of Merger as required by the TBCA,  no filing with,
and no permit,  authorization,  consent  or  approval  of,  any  public  body or
authority is necessary for the  consummation by the Company of the  transactions
contemplated  by this  Agreement.  Except as otherwise  provided on Schedule 5.6
hereto, none of the execution and delivery of this Agreement by the Company, the
performance by the Company of its obligations  hereunder or the  consummation of
the  transactions  contemplated  hereby by the Company will require any consent,
approval or notice  under,  or result in a material  violation  or breach of, or
materially  conflict  with or  constitute a material  default (or an event that,
with  notice or lapse of time or both,  would  constitute  a  material  default)
under,  or permit the termination of, or result in the creation or imposition of
any Lien upon any properties,  assets or business of the Company under any note,
bond, indenture, mortgage, deed of trust, lease, franchise,

                    AGREEMENT AND PLAN OF REORGANIZATION - 15

<PAGE>



permit,  authorization,  license,  contract,  instrument  or other  agreement or
commitment or any order,  judgment or decree to which, the Company is a party or
by which the Company or any of its assets or properties are bound or encumbered.
Neither the  execution  and delivery of this  Agreement by the Company,  nor the
consummation  by  the  Company  of the  transactions  contemplated  hereby,  nor
compliance by the Company with any of the provisions  hereof,  will (i) conflict
with or result in any breach of any provisions of the Articles of  Incorporation
or Bylaws of the Company,  or (ii) violate in any material  respect any existing
judgment,   order,  writ,  injunction,   decree,  statute,  rule  or  regulation
applicable to the Company or any of its properties or assets.

         5.7      Financial Statements; Liabilities.

                  (a) The consolidated  balance sheets and related  consolidated
         statements  of income,  stockholders'  equity and cash  flows,  and the
         related notes of the Company as of and for the years ended December 31,
         1997, 1996 and 1995 (the "Company Audited  Financial  Statements") have
         been  audited by Arnold G. Greene,  CPA,  independent  accountants,  in
         accordance with generally accepted auditing standards. The consolidated
         balance   sheets  and  related   consolidated   statements  of  income,
         stockholders'  equity  and cash  flows,  and the  related  notes of the
         Company as of and for the eight month period ended August 31, 1998 (the
         "Company  Interim  Financial  Statements")  have been  prepared  by the
         Company  in  accordance  with  past  practices.   The  Company  Audited
         Financial  Statements and the Company Interim Financial Statements have
         been  prepared in  accordance  with United  States  generally  accepted
         accounting principles applied on a basis consistent with prior periods,
         and present fairly the financial  position of the Company at such dates
         and the  results  of  operations  and cash flows for the  periods  then
         ended, except in the case of the Company Interim Financial  Statements,
         as  permitted  by  United   States   generally   accepting   accounting
         principles.  The  Company  Interim  Financial  Statements  reflect  all
         adjustments (consisting only of normal, recurring adjustments) that are
         necessary for a fair  statement of the results for the interim  periods
         presented therein.  Except as set forth on Schedule 5.7 hereto, neither
         the  Company,  nor any of its assets,  are  subject to any  Undisclosed
         Liabilities, except (i) as and to the extent reflected on the Company's
         unaudited balance sheet as of August 31, 1998, or (ii) as may have been
         incurred  or may have  arisen  since  August 31,  1998 in the  ordinary
         course of business,  or (iii) that,  individually  or in the aggregate,
         have not had and are not reasonably  likely to have a material  adverse
         effect on the financial condition, results of operations or business of
         the Company (a "Company Material Adverse Effect").

                  (b)  Except  as set forth on  Schedule  5.7  hereto,  the most
         recent  balance  sheet of the Company  included in the Company  Interim
         Financial  Statements includes  appropriate  reserves for all taxes and
         other liabilities incurred as of such date but not yet payable.

         5.8 Events Subsequent to Financial  Statements.  Except as disclosed in
the Company Audited Financial Statements or on Schedule 5.8 hereto, since August
31, 1998 there has not been:

     (a) Any material  adverse  change in the  financial  condition,  results of
operations or business of the Company;


                    AGREEMENT AND PLAN OF REORGANIZATION - 16

<PAGE>



                  (b) Any sale,  lease,  transfer,  license or assignment of any
         assets,  tangible  or  intangible,  of the  Company,  other than in the
         ordinary course of business;

                  (c) Any damage,  destruction or property loss,  whether or not
         covered by insurance, affecting adversely and materially the properties
         or business of the Company;

                  (d)  Any  declaration  or  setting  aside  or  payment  of any
         dividend or distribution with respect to the shares of capital stock of
         the Company or any  redemption,  purchase or other  acquisition  of any
         such shares;

                  (e) Any subjection to any Lien on any of the assets,  tangible
         or intangible, of the Company (other than Liens arising by operation of
         law which secure obligations which are not yet due and payable);

                  (f) Any incurrence of  indebtedness or liability or assumption
         of  obligations  by the  Company  other than (i) those  incurred in the
         ordinary  course of business,  and (ii) those incurred in the course of
         negotiating, documenting and consummating the transactions contemplated
         by this Agreement;

                  (g) Any  cancellation  or  compromise  by the  Company  of any
         material  debt or claim,  except for  adjustments  made in the ordinary
         course of business which, in the aggregate, are not material;

(h) Any waiver or release by the Company of any right of any material value;

                  (i) Any sale, assignment,  transfer or grant by the Company of
         any  rights  under  any  concessions,   leases,  licenses,  agreements,
         patents, inventions,  trademarks, trade names or copyrights,  except in
         the ordinary course of business;

                  (j)  Any  change  made  or   authorized  in  the  Articles  of
         Incorporation  or Bylaws (or similar  organizational  documents) of the
         Company;

                  (k)   Any   acceleration,    termination,    modification   or
         cancellation (or threat thereof) by any party of any contract, lease or
         other  agreement  or  instrument  to which the Company is a party or by
         which  it is bound  so as to  affect,  materially  and  adversely,  the
         properties or business of the Company;

                  (l) Any material arrangement, agreement or undertaking entered
         into by the Company not  terminable  on 30 days or less notice  without
         cost or liability  (including,  without  limitation,  any payment of or
         promise to pay any bonus or special compensation) with employees or any
         increase in  compensation  or benefits to officers or  directors of the
         Company;

                   (m)  Except  as  disclosed  on  Schedule  5.22  hereof,   any
         issuance,  transfer,  sale or other  disposition  by the Company of any
         shares of its capital stock or other equity securities,

                    AGREEMENT AND PLAN OF REORGANIZATION - 17

<PAGE>



         or any grant of any  options,  warrants or other  rights to purchase or
         obtain  (including upon  conversion or exercise)  shares of its capital
         stock or other equity securities; or

                  (n) Except as disclosed in Schedule  5.22 hereof,  any loan to
         or other  transaction with any officer,  director or shareholder of the
         Company  giving rise to any claim or right of the  Company  against any
         such person or of such person against the Company.

         5.9 Tax Returns and Audits.  Except as disclosed  on Schedule  5.9, the
Company has duly and timely filed or duly and timely caused to be filed, or will
duly  and  timely  file  or  cause  to be  filed  with  the  appropriate  taxing
authorities,  all Tax Returns  required to be filed by it for all periods ending
on or before the Closing Date. Each such Tax Return has been or will be prepared
in all material respects in compliance with all applicable laws and regulations.
Except as otherwise  disclosed on Schedule  5.9, the Company has paid in full or
fully reserved against in the Company Financial Statements all taxes,  interest,
penalties,  assessments and deficiencies due or claimed to be due by the Company
to foreign,  federal,  state or local  taxing  authorities  (including  taxes on
properties,  income, franchises,  licenses, sales, use and payrolls).  Except as
set forth on Schedule  5.9, all taxes shown as due on such Tax Returns have been
paid or will be  timely  paid.  Except  as set forth on  Schedule  5.9,  the Tax
Returns filed by the Company have not been, and are not being,  to the knowledge
of the Company,  examined by the IRS or other applicable taxing  authorities for
any period which is open under the  applicable  statute of  limitations  nor are
there any pending or threatened  examinations or tax claims asserted by any such
authorities.  There are no tax Liens  (other  than Liens for taxes which are not
yet due and payable) on any of the property of the Company.  Except as set forth
on Schedule 5.9 hereto, the Company has not granted any extensions of limitation
periods  applicable  to tax claims.  Except  jurisdictions  in which the Company
filed Tax Returns,  no claim has ever been made by a taxing  authority  that the
Company is or may be subject to taxation by that jurisdiction.  True and correct
copies of all Tax Returns  (and  amendment  claims for  refunds),  notices  from
foreign,  federal,  state and local taxing authorities,  tax examination reports
and  statements of  deficiencies  assessed  against or agreed to by the Company,
have been made  available  to the  Acquiror.  Except as  otherwise  disclosed on
Schedule 5.9, the Company is not a party to, or bound by, any tax indemnity, tax
sharing or tax allocation agreement. The Company is not a party to any agreement
that has resulted or would  result,  in the payment of any  compensation  to any
employee,  which would constitute an "excess  parachute  payment," as defined in
Section  280G(a)  of the  Code.  The  Company  has  never  been a  member  of an
"affiliated  group," as defined in  Section  1504(a) of the Code  (other  than a
group of  which  the  Company  is the sole  member)  and is not the  owner of an
interest in a partnership,  joint venture,  trust,  limited liability company or
other  entity or  organization.  Except as  reflected  on the Tax  Returns,  the
Company has not made any material tax  elections  under any section of the Code,
including,  without  limitation,  under any of Sections 108, 338, 441, 463, 472,
1017, 1033 or 4977 of the Code (or any predecessor thereof). The Company has not
filed a consent under Section 341(f) of the Code (or any  predecessor  thereof),
relating to collapsible  corporations.  None of the assets and properties of the
Company is an asset or property that the Acquiror or any of its affiliates is or
will be required to treat as being (a) owned by any other person pursuant to the
provisions  of  Section  168(f)(8)  of the  Internal  Revenue  Code of 1954,  as
amended, and in effect immediately before the enactment of the Tax Reform Act of
1986, or (b) tax-exempt use property within the meaning of Section  168(h)(1) of
the Code.  No closing  agreement  pursuant  to Section  7121 of the Code (or any
predecessor provision) or any similar

                    AGREEMENT AND PLAN OF REORGANIZATION - 18

<PAGE>



provision of any state,  local,  or foreign law has been entered into by or with
respect to the  Company or any assets  thereof.  Except as set forth on Schedule
5.9,  the Company has not agreed to and is not  required to make any  adjustment
pursuant to Section 481(a) of the Code (or any predecessor  provision) by reason
of any  change in any  accounting  method.  Except  as  otherwise  disclosed  on
Schedule 5.9, the Company is not subject to any limitation  under Section 382 or
Section 383 of the Code.

         5.10 Property.  The Company does not own,  directly or indirectly,  any
fee  interest in real  property.  Set forth on Schedule  5.10 is a complete  and
accurate list of each Company  location where property is leased by the Company.
With  respect  to each  lease of the  Company:  (a) the lease  has been  validly
executed and delivered by the Company and, to the  knowledge of the Company,  by
the other party or parties thereto and is a binding  agreement;  (b) the Company
is not and to the  Company's  knowledge,  no  other  party  to the  lease  is in
material breach or default, and no event has occurred on the part of the Company
or, to the  Company's  knowledge,  on the part of any other  party  which,  with
notice or lapse of time,  would  constitute  such a breach or  default or permit
termination,  modification or acceleration  under the lease;  (c) the lease will
continue to be binding in accordance  with its terms following the Closing Date;
(d) the Company has not  repudiated  and, to the Company's  knowledge,  no other
party to the  lease  has  repudiated  any  provision  thereof;  (e) there are no
disputes, oral agreements or delayed payment programs in effect as to the lease;
and (f) all facilities leased thereunder, taken as a whole, have been reasonably
maintained.

         5.11  Tangible  Property.  The  Company  has good  title to, or a valid
leasehold interest in, each item of tangible property, whether real, personal or
mixed,  reflected on its books and records as owned or leased by it,  subject to
no Liens  except (i) Liens for taxes not yet due and payable;  (ii)  mechanics',
carriers',  workmens',  landlord's  statutory  and common  law Liens  either not
delinquent  or being  contested  in good faith;  (iii)  imperfections  of title,
restrictions, variances and easements that do not materially detract from value;
(iv) Liens described in the Company Financial  Statements;  and (v) Liens listed
on Schedule 5.11 hereto.

         5.12  Licenses  and  Permits.  The Company has  obtained  all  material
licenses,  product  and  establishment   registrations,   franchises,   permits,
easements,  certificates and consents  necessary to the conduct of the Company's
business, except as provided on Schedule 5.12.

         5.13 Assets Necessary to the Business.  The personal property and other
assets owned or leased by the Company are sufficient in all material respects to
carry on the Company's business as presently  conducted.  Except as set forth in
Section 5.17 hereof,  the tangible personal property of the Company necessary to
the operation of the business of the Company,  taken as a whole,  is fit for the
purposes  for which they are  presently  being used and are in  reasonably  good
operating condition and repair, ordinary wear and tear excepted.

         5.14 Books and  Records.  The books and records of the  Company  fairly
reflect  the  transactions  to which  the  Company  is a party  or by which  its
properties are bound, and such books and records are and have been properly kept
and  maintained,  with the revenues,  expenses,  assets and  liabilities  of the
Company accurately recorded therein.


                    AGREEMENT AND PLAN OF REORGANIZATION - 19

<PAGE>



         5.15  Questionable  Payments.  Neither the Company nor to the Company's
knowledge,  any employee,  agent,  representative  or shareholder of the Company
has,  directly or indirectly,  made any bribes,  kickbacks,  illegal payments or
illegal  political  contributions  using Company funds or made any payments from
the Company's funds to governmental  officials for improper purposes or made any
illegal payments from the Company's funds to obtain or retain business.

         5.16  Environmental  Matters.  There  are no  claims,  actions,  suits,
proceedings  or  investigations  pending  against  or  affecting  the  Company's
business  at law or in equity  before  any  court or  before or by any  federal,
state, municipal or other governmental department,  commission, board, agency or
instrumentality,  relating to environmental  matters. The Company is not subject
to any continuing  court or  administrative  order,  writ,  injunction or decree
applicable to the Company's  business relating to any environmental  matter. The
Company to its  knowledge  is not in  violation of or in default in any material
respect  with  regards  to  any  existing  statute,  regulation,   order,  writ,
injunction  or  decree  of any  court  or  federal,  state,  municipal  or other
governmental department,  commission,  board, agency or instrumentality relating
to any environmental matter.

         5.17  Equipment.  Except as set forth on  Schedule  5.17,  all items of
equipment of the Company,  taken as a whole, are (a) mechanically sound and in a
condition to perform in the manner  needed for the  operation  of the  Company's
business;  (b) in good cosmetic  condition;  and (c) in material compliance with
all  applicable  statutes,   ordinances  and  regulations,   including,  without
limitation,  those  related  to  safety,  in each  case  ordinary  wear and tear
excepted.

         5.18 Intellectual Property. Set forth on Schedule 5.18 hereto is a true
and complete  list of all United  States  patents and patent  applications;  all
copyright  registrations and applications to register copyrights;  and all trade
name, trademark, service mark, and trade dress registrations and applications to
register the same that are owned by the Company or which the Company is licensed
to use or under  which the Company  possesses  any rights  ("Company  Registered
Intellectual  Property").  Schedule 5.18 also lists any unregistered copyrights,
common  law  trademarks  or  service  marks,  or trade  secrets  of the  Company
("Unregistered Company Intellectual Property").  The Company is not obligated or
under any liability  whatsoever to make any payments by way of royalties,  fees,
or  otherwise  to any owner or licensee  of, or other  claimant  to, any patent,
trademark,  service mark, trade name, or other intangible asset, with respect to
the use thereof or in connection  with the conduct of its business or otherwise.
The Company has no reason to believe that there are any conflicting rights which
might impair the Company's use of the Company Registered  Intellectual  Property
or Unregistered Company Intellectual Property and has not received any notice of
a conflict  with the  asserted  rights of others  with  respect  to any  patent,
copyright,  trade  secret,  or  trademark  right  that  could,  singly or in the
aggregate,  materially  and  adversely  affect  the  business  of  the  Company;
furthermore,  to the  Company's  knowledge,  no other  persons or entities  have
infringed  upon or are  infringing  upon  the  Company  Registered  Intellectual
Property or the Unregistered Company Intellectual Property.

         5.19  Insurance.  The Company  currently  maintains  fire and casualty,
general  liability and workers  compensation  policies with reputable  insurance
carriers,  which the  Company  reasonably  believes  provide  full and  adequate
coverage for all normal risks incident to the business of the

                    AGREEMENT AND PLAN OF REORGANIZATION - 20

<PAGE>



Company and its  properties  and assets.  Set forth on Schedule 5.19 hereto is a
list of all insurance policies which are currently in effect for the Company.

         5.20  Contracts.  (a)  Set  forth  on  Schedule  5.20  is a list of all
material  contracts,  leases,  arrangements  and  commitments  (whether  oral or
written) of the Company (collectively, the "Company Material Contracts"). Except
as set  forth  in  Schedule  5.20,  the  Company  is not a party  to or bound or
affected by any contract,  lease,  arrangement  or  commitment  (whether oral or
written)  relating to: (i) the  employment  of any person  other than  personnel
employed at the  pleasure of the Company in the  ordinary  course of business at
rates of compensation and on terms consistent with past business practice;  (ii)
collective bargaining with, or any representation of any employees by, any labor
union or association;  (iii) the acquisition of services, supplies, equipment or
other personal  property  involving more than $10,000 or which is not terminable
by the Company upon not more than 30 days' notice without obligation on the part
of the Company;  (iv) the purchase or sale of real property;  (v)  distribution,
agency or construction;  (vi) lending or advancing of funds (other than accounts
receivable);  (vii) borrowing of funds or receipt of credit (other than accounts
payable);  (viii)  incurring  of any  obligation  or  liability  (except for the
accounts  payable);  (ix) the sale of  personal  property;  or (x) any matter or
transaction   not  in  the  ordinary  course  of  business  of  the  Company  or
inconsistent with past business practice of the Company.

                  (b) The  Company  is not in default  in any  material  respect
under any of the Company  Material  Contracts,  except as  disclosed on Schedule
5.20,  and  the  Company  Material   Contracts  are  legal,  valid  and  binding
obligations  of the Company,  and to the  Company's  knowledge,  the  respective
parties  thereto,  in  accordance  with their  terms  and,  except to the extent
reflected in Schedule 5.20, have not been amended;  and no defenses,  offsets or
counterclaims  thereto  have  been  asserted  nor has  the  Company  waived  any
substantial rights thereunder.

         5.21  Litigation.  Schedule  5.21  hereto  lists  (a) the  name of each
action,  complaint,  petition,  suit  or  other  proceeding,  whether  civil  or
criminal, in law or equity or before any arbitrator or government entity against
the Company and the amount of same;  (b) any  instances  in which the Company is
subject to any judgment or order (other than orders of general applicability) of
any  court of  quasi-judicial  or  administrative  agency  of any  jurisdiction,
domestic or foreign; or (c) any instances in which the Company is a plaintiff in
any  action,  domestic  or  foreign,  judicial  or  administrative  in  which  a
counterclaim  against the Company is pending or might be brought.  Except as set
forth on Schedule 5.21,  there are no existing  actions,  suits,  proceedings or
investigations  that  could  result  in  any  material  adverse  change  in  the
condition,  financial or otherwise, of the Company, the same being appropriately
reserved against in the Company Financial  Statements.  There are no unsatisfied
judgments,  orders  (other  than  orders of general  applicability),  decrees or
stipulations affecting the Company or to which the Company is a party.

         5.22 Employees.  The Company has listed on Schedule 5.22 hereto (to the
extent  not  listed on  Schedule  5.20  hereto)  and has made  available  to the
Acquiror true and complete copies of: (a) any written employment agreements with
any officer or director of the Company; and (b) any written employment agreement
with any employee of the Company which by its terms may not be terminated by the
Company at will or which grant severance  payments.  The Company has not entered
into any similar oral  employment  agreements.  The Company is not a party to or
bound by

                    AGREEMENT AND PLAN OF REORGANIZATION - 21

<PAGE>



any collective bargaining agreement. Except as disclosed on Schedule 5.22, there
are no loans or  other  obligations  payable  or  owing  by the  Company  to any
shareholder,  officer,  director or employee of the Company (except salaries and
wages  incurred and accrued in the ordinary  course of business),  nor are there
any loans or debts  payable or owing by any of such  persons to the  Company or,
except as described on Schedule  5.22 hereto,  any  guarantees by the Company of
any loan or  obligation  of any nature to which any such person is a party.  The
Company has, in all material  respects,  complied with all laws and  regulations
which  relate  to the  employment  of  labor,  employee  civil  rights  or equal
employment opportunities.  Except as set forth on Schedule 5.22 hereto, there is
no  charge  or  complaint  actually  pending  or,  to the  Company's  knowledge,
threatened   against  the  Company  before  the  Equal  Employment   Opportunity
Commission  or the  Department  of Labor or any state or local agency of similar
jurisdiction with respect to the Company's business.  There is no organizational
effort  presently  being made or  threatened  by or on behalf of any labor union
with respect to employees of the Company.

         5.23 Employee  Benefit  Plans.  The Company has listed on Schedule 5.23
hereto and has made  available to the Acquiror  true and complete  copies of (a)
any  nonqualified  deferred or incentive  compensation  or  retirement  plans or
arrangements,  (b) any qualified retirement plans or arrangements, (c) any other
employee  compensation,  severance or termination  pay or welfare benefit plans,
programs or arrangements,  (d) any material employee benefit plans, programs, or
arrangements,  and (e) any related trusts,  insurance contracts or other funding
arrangements  main tained,  established  or contributed to by the Company or any
entity (a "Company ERISA Affiliate")  required to be aggregated with the Company
pursuant to the  provisions of Sections  414(b),  (c), (m) or (o) of the Code or
Section  4001(a)(14)  of ERISA within the last six years or to which the Company
or any  Company  ERISA  Affiliate  is a party or  otherwise  is bound  ("Company
Employee  Benefit  Plans").  Except as set forth on Schedule  5.23 hereto,  with
respect to each Company  Employee  Benefit  Plan for which an annual  report has
been filed, no material  adverse change has occurred with respect to the matters
covered  by the annual  report  since the date  thereof.  The  Company  has made
available to the Acquiror true and complete  copies of the following  documents,
as applicable,  with respect to each of the Company  Employee Benefit Plans: (a)
current summary plan  descriptions,  (b) the three most recent annual reports on
the Form 5500 Series, (c) the three most recent actuarial  reports,  and (d) all
material communications received from or sent to the Internal Revenue Service or
the  Department  of Labor  within  the  last  two  years  (including  a  written
description  of any material oral  communications  relating to the IRS Voluntary
Compliance  Resolution  or  Closing  Agreement  programs).  Each of the  Company
Employee  Benefits  Plans (i) has been  operated  in all  material  respects  in
accordance with its terms and applicable  provisions of law, including ERISA and
the Code, and (ii) has not engaged in any "prohibited transaction" (as such term
is defined in Section  4975 of the Code or in Section 406 of ERISA)  which would
result in a material liability.  Each of the Company Employee Benefit Plans that
is a Pension Plan is qualified within the meaning of Section 401(a) of the Code,
except  as  heretofore  disclosed  in  writing  to the  Acquiror,  and  either a
favorable  determination  letter has been issued by the IRS with respect to each
such Pension Plan or the  applicable  remedial  amendment  period under Treasury
Regulation  Section  1.401(b)-1 has not ended.  No Pension Plan has been amended
since issuance of the most recent  determination  letter by the IRS with respect
thereto,  except as  disclosed  on Schedule  5.23.  Each  Pension  Plan has been
administered  in all material  respects in accordance with Section 401(a) of the
Code, where  applicable.  Since the enactment of ERISA,  neither the Company nor
any ERISA

                    AGREEMENT AND PLAN OF REORGANIZATION - 22

<PAGE>



Affiliate has completely or partially  terminated any employee  pension  benefit
plan, (as defined above) or withdrawn (in either a total or partial  withdrawal)
from any  multiemployer  pension plan, as defined in Section  3(37)(A) of ERISA.
There  is no suit,  action  or  proceeding  pending  or  threatened  against  or
affecting or likely to have an adverse  impact on any Company  Employee  Benefit
Plan, and no claims have been filed against any Company  Employee  Benefit Plan,
other than routine  claims for benefits in the ordinary  course.  One or more of
the Company  Employee  Benefit  Plans may be covered by COBRA.  If so, each such
plan has been  operated  in, and is in,  compliance  with COBRA in all  material
respects.  All  notices  required  to be given  under COBRA have been timely and
properly  given  in  accordance  with  COBRA,  and  the  rules  and  regulations
promulgated  thereunder,   and  no  employee,   former  employee  or  "qualified
beneficiary" (as defined in COBRA) has any claim or contingent claim against the
Company,  any  Subsidiary or any Company  ERISA  Affiliate for failure to comply
with COBRA or the rules and regulations  promulgated  thereunder.  Schedule 5.23
lists all  persons  receiving  benefits  under  COBRA.  Except as  disclosed  in
Schedule 5.22 or Schedule 5.23, no Company  Employee Benefit Plan which is not a
Pension Plan provides for continuing benefits or coverage for any participant or
beneficiary thereof after termination of the participant's employment (except as
may be  required  under  COBRA and at the sole  expense  of the  participant  or
beneficiary). Neither the Company nor any Company ERISA Affiliate has engaged in
a transaction described in Section 4069(a) of ERISA. Neither the Company nor any
Company ERISA Affiliate is subject to withdrawal  liability (whether asserted or
unasserted)  under  Section  4201,  et seq.,  of ERISA.  No  employee  or former
employee  of  the  Company  will  become  entitled  to  any  bonus,  retirement,
severance,  job  security  or similar  benefit or  enhanced  benefit  (including
acceleration of an award,  vesting or exercise of an incentive award) or any fee
or  payment  of any kind as a  result  of any of the  transactions  contemplated
hereby,  except as disclosed on Schedule 5.23. The Company has not  communicated
to any employee or former  employee any  intention or  commitment  to modify any
Company Employee Benefit Plan or to establish or implement any other employee or
retiree benefit or compensation plans or arrangements.

         5.24 Legal Compliance.  Except as set forth on Schedule 5.24 hereto, no
material  claim has been filed  against the Company  alleging a violation of any
applicable law or regulation of any foreign,  federal, state or local government
thereof.

         5.25  Broker's  Fees.  Neither the Company nor anyone on its behalf has
any liability to any broker,  finder,  investment banker or agent, or has agreed
to pay any brokerage  fees,  finder's fees or  commissions,  or to reimburse any
expenses of any broker,  finder,  investment  banker or agent in connection with
the Merger.


                                    ARTICLE 6
                              PRE-CLOSING COVENANTS

         6.1 Interim  Operations of the Company.  (a) The Company  covenants and
agrees that,  after the date hereof and prior to the Effective  Time (unless the
Acquiror  shall  otherwise  approve  in  writing,  which  approval  shall not be
unreasonably withheld or delayed, and except as otherwise expressly contemplated
by this Agreement,  including, but not limited to, paragraph (b) of this Section
6.1):

                    AGREEMENT AND PLAN OF REORGANIZATION - 23

<PAGE>



                           (i) the business of the Company shall be conducted in
                  the ordinary  and usual  course and, to the extent  consistent
                  therewith,  the Company shall use its best efforts to preserve
                  its  business  organization  intact and  maintain its existing
                  relations    and   goodwill   with    customers,    suppliers,
                  distributors,   creditors,  lessors,  employees  and  business
                  associates;

                           (ii) the Company  shall not (i) amend its Articles of
                  Incorporation  or  Bylaws or amend,  modify or  terminate  any
                  stock option plan or Company Employee Benefit Plan,  except as
                  described  in  6.1(a)(iv)  below;   (ii)  split,   combine  or
                  reclassify  its  outstanding  shares of capital  stock;  (iii)
                  declare, set aside or pay any dividend payable in cash, stock,
                  or  property  in  respect  of  any  capital  stock;   or  (iv)
                  repurchase,  redeem or  otherwise  acquire,  any shares of its
                  capital   stock  or  any   securities   convertible   into  or
                  exchangeable  or  exercisable  for any  shares of its  capital
                  stock;

                           (iii) the Company shall not (i) issue,  sell, pledge,
                  dispose  of  or   encumber   any  shares  of,  or   securities
                  convertible  into  or  exchangeable  or  exercisable  for,  or
                  options, warrants, calls, commitments or rights of any kind to
                  acquire,  any shares of its capital  stock of any class or any
                  other property or assets); (ii) other than in the ordinary and
                  usual course of business, transfer, lease, license, guarantee,
                  sell,  mortgage,  pledge,  dispose  of or  encumber  any other
                  material  property  or assets or incur or modify any  material
                  indebtedness  or other material  liability;  or (iii) make any
                  commitments  for, make or authorize  any capital  expenditures
                  other than in the ordinary and usual course of business or, by
                  any means,  make any  acquisition of, or investment in, assets
                  or stock of any other person or entity;

                           (iv) the  Company  shall  not  terminate,  establish,
                  adopt,  enter into, make any new grants or awards under, amend
                  or otherwise modify, any stock option plan or Company Employee
                  Benefit Plan. In addition,  the Company shall not increase the
                  salary,  wage,  bonus or other  compensation  of any employees
                  except increases occurring in the ordinary and usual course of
                  business  (which shall  include  normal  periodic  performance
                  reviews and related compensation and benefit increases);

                           (v) the Company  shall not settle or  compromise  any
                  material  claims or litigation  or, except in the ordinary and
                  usual course of business modify, amend or terminate any of the
                  Company  Material  Contracts  or waive,  release or assign any
                  material rights or claims;

                           (vi) the Company  shall not make any tax  election or
                  permit any  insurance  policy  naming it as a  beneficiary  or
                  loss-payable  payee to be canceled or terminated except in the
                  ordinary and usual course of business;

                           (vii) the  Company  shall not take any action or omit
                  to take any action that would cause any of the representations
                  and  warranties of the Company  herein to become untrue in any
                  material respect; and


                    AGREEMENT AND PLAN OF REORGANIZATION - 24

<PAGE>



                           (viii) the Company  shall not authorize or enter into
                  an agreement to do any of the foregoing.

                  (b) Notwithstanding  anything herein to the contrary, prior to
         the  Effective  Time,  the Company  shall take all action  necessary to
         ensure that there are no Company Convertible  Securities outstanding as
         of the Effective Time.

         6.2 Conduct of the  Acquiror.  The Acquiror  covenants and agrees that,
after the date hereof and prior to the Effective  Time (unless the Company shall
otherwise approve in writing,  which approval shall not be unreasonably withheld
or delayed, and except as otherwise expressly contemplated by this Agreement):

                           (i) the business of the  Acquiror  shall be conducted
                  in the ordinary and usual course and, to the extent consistent
                  therewith, the Acquiror shall use its best efforts to preserve
                  its  business  organization  intact and  maintain its existing
                  relations    and   goodwill   with    customers,    suppliers,
                  distributors,   creditors,  lessors,  employees  and  business
                  associates;

                           (ii) the Acquiror shall not (i) amend its Articles of
                  Incorporation  or  Bylaws or amend,  modify or  terminate  any
                  stock option plan or Acquiror Employee Benefit Plan, except as
                  described  in  6.2(a)(iv)  below;   (ii)  split,   combine  or
                  reclassify  its  outstanding  shares of capital  stock;  (iii)
                  declare, set aside or pay any dividend payable in cash, stock,
                  or  property  in  respect  of  any  capital  stock;   or  (iv)
                  repurchase,  redeem or  otherwise  acquire,  any shares of its
                  capital   stock  or  any   securities   convertible   into  or
                  exchangeable  or  exercisable  for any  shares of its  capital
                  stock;

                           (iii) the Acquiror shall not (i) issue, sell, pledge,
                  dispose  of  or   encumber   any  shares  of,  or   securities
                  convertible  into  or  exchangeable  or  exercisable  for,  or
                  options, warrants, calls, commitments or rights of any kind to
                  acquire,  any shares of its capital  stock of any class or any
                  other property or assets); (ii) other than in the ordinary and
                  usual course of business, transfer, lease, license, guarantee,
                  sell,  mortgage,  pledge,  dispose  of or  encumber  any other
                  material  property  or assets or incur or modify any  material
                  indebtedness  or other material  liability;  or (iii) make any
                  commitments  for, make or authorize  any capital  expenditures
                  other than in the ordinary and usual course of business or, by
                  any means,  make any  acquisition of, or investment in, assets
                  or stock of any other person or entity;

                           (iv) the  Acquiror  shall not  terminate,  establish,
                  adopt,  enter into, make any new grants or awards under, amend
                  or  otherwise  modify,  any  stock  option  plan  or  Acquiror
                  Employee  Benefit  Plan. In addition,  the Acquiror  shall not
                  increase the salary,  wage, bonus or other compensation of any
                  employees except increases occurring in the ordinary and usual
                  course  of  business  (which  shall  include  normal  periodic
                  performance  reviews  and  related  compensation  and  benefit
                  increases);


                    AGREEMENT AND PLAN OF REORGANIZATION - 25

<PAGE>



                           (v) the Acquiror  shall not settle or compromise  any
                  material  claims or litigation  or, except in the ordinary and
                  usual course of business modify, amend or terminate any of the
                  Acquiror  Material  Contracts or waive,  release or assign any
                  material rights or claims;

                           (vi) the Acquiror  shall not make any tax election or
                  permit any  insurance  policy  naming it as a  beneficiary  or
                  loss-payable  payee to be canceled or terminated except in the
                  ordinary and usual course of business;

                           (vii) the Acquiror  shall not take any action or omit
                  to take any action that would cause any of the representations
                  and  warranties  of the  Acquiror and the Merger Sub herein to
                  become untrue in any material respect; and

                           (viii) the Acquiror shall not authorize or enter into
                  an agreement to do any of the foregoing.

         6.3 Press Releases.  The Company,  the Acquiror and the Merger Sub will
consult with each other before  issuing,  and provide each other the opportunity
to review and comment upon, any press releases or other public  statements  with
respect to any transactions  described in this Agreement,  including the Merger,
and shall not issue any such press  releases or make any such  public  statement
prior to such  consultation,  except as may be  required by  applicable  law and
then, if practicable, only after consulting with the other parties hereto.

         6.4      Access to Information and Confidentiality.

                  (a) Prior to the  Closing  Date,  each of the  Company and the
         Acquiror  shall  afford  to  the  other  party  and  to  the  officers,
         employees,   accountants,   counsel,   financial   advisors  and  other
         representatives  of such other party,  reasonable  access during normal
         business hours to their respective premises, books and records and will
         furnish  to the  other  party  (i) a copy  of  each  report,  schedule,
         registration  statement  and other  documents  filed by it during  such
         period  pursuant  to the  requirements  of federal or state  securities
         laws, and (ii) such other  information with respect to its business and
         properties as such other party reasonably requests.

                  (b) Each of the Company and the Acquiror  will, and will cause
         its officers, directors,  employees, agents and representatives to, (i)
         hold in  confidence,  unless  compelled  to  disclose  by  judicial  or
         administrative  process,  or, in the opinion of its  counsel,  by other
         requirements  of law, all nonpublic  information  concerning  the other
         party  furnished in connection  with the  transactions  contemplated by
         this Agreement  until such time as such  information  becomes  publicly
         available  (otherwise  than through the  wrongful act of such  person),
         (ii) not  release or disclose  such  information  to any other  person,
         except in connection  with this  Agreement to its auditors,  attorneys,
         financial advisors,  other consultants and advisors,  and (iii) not use
         such  information  for any competitive or other purpose other than with
         respect  to  its  consideration  and  evaluation  of  the  transactions
         contemplated  by this  Agreement.  In the event of  termination of this
         Agreement for any

                    AGREEMENT AND PLAN OF REORGANIZATION - 26

<PAGE>



         reason,  the  parties  hereto  will  promptly  return  or  destroy  all
         documents containing  nonpublic  information so obtained from any other
         party hereto and any copies made of such  documents and any  summaries,
         analyses or compilations made therefrom.

         6.5 Notice of Developments.  Prior to the Closing,  each of the parties
hereto shall promptly notify the other in writing of all events,  circumstances,
facts and  occurrences,  whether  arising  prior to or subsequent to the date of
this Agreement,  that will or are reasonably likely to result in any breach of a
representation  or  warranty  or covenant  made by the  notifying  party in this
Agreement or any failure to be satisfied of any condition to the  obligations of
the party receiving such notice under this Agreement.

         6.6  Merger  Sub  Stockholder  Approval.  The  Acquiror,  as  the  sole
shareholder  of the Merger Sub,  shall take all action  necessary  to effect the
necessary shareholder approval by the Merger Sub of this Agreement.

         6.7 Reasonable Efforts; Consents, Approvals and Waivers. Upon the terms
and subject to the conditions set forth in this  Agreement,  each of the parties
agrees to use reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done,  and to assist and cooperate with the other party in
doing,  all  things  necessary,  proper  or  advisable  to  consummate  and make
effective, in the most expeditious manner practicable, the Merger, and the other
transactions contemplated by this Agreement,  including, without limitation, (i)
the  obtaining  of all  necessary  consents,  approvals  or waivers  required in
connection with the authorization,  execution and delivery of this Agreement and
the  consummation  of the Merger  (provided  that no such  consent,  approval or
waiver  shall  require such party to take any action that would impair the value
that such party reasonably attributes to the Merger), and (ii) the execution and
delivery of any additional  instruments necessary to consummate the transactions
contemplated by this Agreement.

                                    ARTICLE 7
                               CLOSING CONDITIONS

         7.1 Conditions to Obligations of Each Party Under This  Agreement.  The
respective  obligations  of each  party  to  effect  the  Merger  and the  other
transactions  contemplated  hereby  shall be subject to the  satisfaction  at or
prior to the Effective Time of the following conditions, any or all of which may
be waived by the parties hereto, in whole or in part, to the extent permitted by
applicable law:

                  (a) No  Restraining  Action.  No action,  suit,  or proceeding
         before  any  court or  governmental  or  regulatory  authority  will be
         pending,  no investigation by any governmental or regulatory  authority
         will have been  commenced  against the Company,  the Acquiror or any of
         the  principals,  officers or directors  of either of them,  seeking to
         restrain,  prevent or change the  transactions  contemplated  hereby or
         questioning  the  legality  or  validity  of any such  transactions  or
         seeking damages in connection with any such transactions.

                  (b) Consents and  Approvals.  All  material  governmental  and
         other third-party  consents and approvals,  if any, necessary to permit
         the consummation of the transactions

                    AGREEMENT AND PLAN OF REORGANIZATION - 27

<PAGE>



         contemplated by this Agreement, or to permit the continued operation of
         the business of the Surviving  Corporation  in  substantially  the same
         manner after the Closing Date as the Company before, including, without
         limitation,  all  required  approvals  of  the  NASD,  will  have  been
         received.

         7.2 Conditions to the Acquiror's  Obligations.  The  obligations of the
Acquiror to effect the Merger and the other  transactions  contemplated  by this
Agreement are subject to the satisfaction or waiver of the following  conditions
at or prior to the Closing:

                  (a)  Representations,   Warranties  and  Covenants.   (i)  The
         representations  and  warranties of the Company in this Agreement or in
         any  certificate  delivered to the Acquiror  pursuant  hereto as of the
         date  hereof  will be deemed  to have been made  again at and as of the
         Closing Date and (without regard to any Schedule  updates  furnished by
         the Company after the date hereof unless  consented to by the Acquiror)
         will then be true and correct in all  material  respects,  and (ii) the
         Company will have performed and complied in all material  respects with
         all  agreements  and  conditions  required  by  this  Agreement  to  be
         performed  or complied  with by the Company  prior to or on the Closing
         Date.

                  (b)  Closing  Certificate.  The  receipt by the  Acquiror of a
         certificate executed by the Chief Executive Officer and Chief Financial
         Officer of the Company  dated the  Closing  Date,  certifying  that the
         conditions specified in Section 7.2(a) hereof have been fulfilled.

                  (c) Investor  Representation  Letters.  Each Shareholder shall
         have  completed,  executed  and  delivered  to the Acquiror an Investor
         Questionnaire  and  an  Accredited   Investor   Representation   Letter
         (pursuant to forms provided by the Acquiror) acceptable in all respects
         to the  Acquiror  and all such  Investor  Questionnaires  and  Investor
         Representation  Letters shall be sufficient to satisfy the Acquiror, in
         its reasonable discretion, of the availability of an exemption from the
         registration  requirements  of the  federal  securities  laws  and  any
         applicable  state  securities or "blue sky" laws for the offer and sale
         of shares of Acquiror Common Stock.

                  (d) Employment Agreements.  Gary Purcell,  Thomas Laundrie and
         Richard Belz shall have each entered into an employment  agreement with
         the Surviving Corporation  substantially in the form attached hereto as
         Exhibit A.

         7.3  Conditions to the Company's  Obligations.  The  obligations of the
Company to effect the Merger  and the other  transactions  contemplated  by this
Agreement  are also  subject  to the  satisfaction  or waiver  of the  following
conditions at or prior to the Closing:

                  (a)  Representations,   Warranties  and  Covenants.   (i)  The
         representations  and warranties of the Acquiror in this Agreement or in
         any certificate delivered to the Company pursuant hereto as of the date
         hereof  will be deemed to have been made again at and as of the Closing
         Date (without regard to any Schedule updates  furnished by the Acquiror
         after the date hereof unless consented to by the Company) and will then
         be true and correct in all  material  respects,  and (ii) the  Acquiror
         will have performed and complied in all material

                    AGREEMENT AND PLAN OF REORGANIZATION - 28

<PAGE>



         respects with all agreements and conditions  required by this Agreement
         to be  performed or complied  with by the  Acquiror  prior to or on the
         Closing Date.

                  (b)  Closing  Certificate.  The  receipt  by the  Company of a
         certificate executed by the Chief Executive Officer and Chief Financial
         Officer of the Acquiror  dated the Closing  Date,  certifying  that the
         conditions specified in Section 7.3(a) hereof have been fulfilled.


                                    ARTICLE 8
                              ADDITIONAL AGREEMENTS

         8.1  Indemnification  of the Company's  Officers and  Directors.  For a
period  of six (6)  years  following  the  Effective  Time,  the  Company  shall
indemnify,  defend and hold  harmless the present  officers and directors of the
Company with  respect to any act or omission  occurring  prior to the  Effective
Time to the full extent permitted under the Company's  Articles of Incorporation
and Bylaws as of the date hereof (to the extent consistent with applicable law);
provided, however, that such indemnification shall not apply to any matter which
constitutes a breach of the representations and warranties of the Acquiror under
this Agreement.

         8.2  Shareholders  Fee. On the Closing Date, the Surviving  Corporation
shall pay to the Shareholders an aggregate amount of $100,000. Such amount shall
be shared equally by Richard Belz ("Belz"),  Thomas  Laundrie  ("Laundrie")  and
Gary Purcell ("Purcell").

         8.3 Release from Guaranties.  The Acquiror shall use reasonable efforts
and  cooperate  with  each of Belz,  Laundrie  and  Purcell  to have  each  such
individual  released from all guaranties listed on Schedule 8.3 attached hereto,
including by repayment  of such debt or  obligation  if necessary to effect such
release,  provided,  however, that in no event shall the Acquiror be required to
repay more than $10,000.00 in indebtedness to obtain such releases.

         8.4 Equity  Subordinated  Loans. The equity  subordinated  lenders (the
"Equity  Subordinated  Lenders")  of the  Company  and the  number  of shares of
Company Common Stock  (collectively,  the "Equity  Subordinated  Lender Shares")
held by such Equity  Subordinated  Lenders are as follows:  EMH Enterprises - 10
shares;  Belz - 10 shares,  Laundrie - 10 shares;  and Purcell - 10 shares.  All
equity  subordinated  loans of the Company  currently  outstanding  shall remain
valid  and  in  full  force  and  effect  at the  Effective  Time.  Each  Equity
Subordinated  Lender  Share held by the  Equity  Subordinated  Lenders  shall be
canceled  as of the  Effective  Time  pursuant  to Section  3.1.  The  Surviving
Corporation shall issue to each Equity Subordinated Lender that number of shares
of the common stock of the Surviving  Corporation  equal to the number of Equity
Subordinated  Lender Shares held by such Equity  Subordinated Lender immediately
prior to the Effective Time.

         8.5 Underwriter's  Warrants.  Any  underwriter's  warrants which may be
issued to the  Surviving  Corporation  following  the  Effective  Time  shall be
allocated  sixty percent (60%) to the  Surviving  Corporation  and forty percent
(40%) to the  Acquiror.  Belz,  Laundrie  and  Purcell  may cause the  Surviving
Corporation to further distribute such underwriter's warrants in any manner that
the Shareholders may determine in their sole discretion.

                    AGREEMENT AND PLAN OF REORGANIZATION - 29

<PAGE>




         8.6 Excluded  Assets.  Those assets listed on Annex III hereto shall be
transferred (to the extent necessary to remove such assets from the books of the
Company) to such  persons or entities as the Company may  determine  in its sole
discretion prior to the Effective Time.

                                    ARTICLE 9
                                   TERMINATION

         9.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the  Effective  Time, by mutual
written  consent of the  Company,  the Acquiror and the Merger Sub, by action of
their respective Boards of Directors.

         9.2  Termination by Either the Acquiror or the Company.  This Agreement
may be  terminated  and the  Merger  may be  abandoned  at any time prior to the
Effective Time by action of the Board of Directors of either the Acquiror or the
Company if (i) the Merger shall not have been  consummated by December 31, 1998,
or (ii) any order permanently  restraining,  enjoining or otherwise  prohibiting
the Merger  shall  become final and  nonappealable,  provided  that the right to
terminate this Agreement  pursuant to clause (i) above shall not be available to
any party that has breached in any material  respect its obligations  under this
Agreement  in  any  manner  that  shall  have  proximately  contributed  to  the
occurrence of the failure of the Merger to be consummated.

         9.3  Termination  by the Company.  This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by action of
the Board of Directors of the Company if there has been a material breach by the
Acquiror  or the  Merger  Sub  of  any  representation,  warranty,  covenant  or
agreement contained in this Agreement that is not curable or, if curable, is not
cured within 30 days after written notice of such breach is given by the Company
to the party committing such breach.

         9.4  Termination by the Acquiror.  This Agreement may be terminated and
the Merger may be abandoned at any time prior to the  Effective  Time, by action
of the Board of Directors of the Acquiror if there has been a material breach by
the Company of any representation,  warranty, covenant or agreement contained in
this Agreement  that is not curable or, if curable,  is not cured within 30 days
after  written  notice  of such  breach  is given by the  Acquiror  to the party
committing such breach.

         9.5 Effect of Termination and Abandonment.  In the event of termination
of this Agreement and the  abandonment of the Merger pursuant to this Article 9,
this Agreement shall become void and of no effect with no liability of any party
hereto  (or  any  of its  directors,  officers,  employees,  agents,  legal  and
financial  advisors  or other  representatives)  except as  otherwise  set forth
herein;  provided,  however,  except  as  otherwise  provided  herein,  no  such
termination shall relieve any party hereto of any liability or damages resulting
from any willful breach of this Agreement.


                    AGREEMENT AND PLAN OF REORGANIZATION - 30

<PAGE>



                                   ARTICLE 10
                               GENERAL PROVISIONS

         10.1 Expenses.  Except as otherwise specifically set forth herein, each
party hereto shall pay all of its own costs and expenses in connection  with (i)
the preparation,  negotiation,  execution and delivery of this Agreement and all
related agreements,  and (ii) the consummation of the transactions  contemplated
hereby and  thereby.  Redstone  shall cause its costs and expenses to be paid in
full as of the Effective Time.

         10.2 Notices. All notices and other  communications  hereunder shall be
in writing and shall be deemed to have been duly given if delivered  personally,
sent by telex, telecopy, facsimile or overnight courier, or mailed by registered
or certified mail (postage prepaid and return receipt  requested),  to the party
to whom the same is so delivered,  sent or mailed at the following addresses (or
at such other address for a party as shall be specified by like notice):

                  (a)      if to the Acquiror or the Merger Sub:

                           Euromed, Inc.
                           c/o Robert A. Shuey III
                           8214 Westchester   Suite 500
                           Dallas, Texas 75225
                           Telecopy:      (214) 987-2091

                           With a copy to:

                           Maurice J. Bates
                           8214 Westchester   Suite 500
                           Dallas, Texas 75225
                           Telecopy:      (214) 987-2091

                  (b)      if to the Company:

                           Redstone Securities, Inc.
                           101 Fairchild Avenue
                           Plainview, New York 11803
                           Attention: Richard Belz
                           Telecopy:      (516) 576-3840


                    AGREEMENT AND PLAN OF REORGANIZATION - 31

<PAGE>



                           With a copy to:
                           Charles O'Rourke, Esq.
                           100 Quentin Roosevelt Boulevard
                           Suite 204
                           Garden City, New York 11530
                           Telecopy:      (516) 542-0161

Notices delivered personally or by telex,  telecopy or facsimile shall be deemed
delivered as of actual receipt,  mailed notices shall be deemed  delivered three
days after mailing and overnight  courier notices shall be deemed  delivered one
day after the date of sending.

         10.3  Interpretation.  The headings contained in this Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation  of this Agreement.  References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.

         10.4 Severability.  If any term, provision,  covenant or restriction of
this Agreement is held by a court of competent  jurisdiction to be invalid, void
or  unenforceable,  the  remainder  of  the  terms,  provisions,  covenants  and
restrictions  of this Agreement  shall remain in full force and effect and shall
in no way be affected,  impaired or invalidated  and the parties shall negotiate
in good faith to modify this  Agreement  to preserve  each  party's  anticipated
benefits under this Agreement.

         10.5  Miscellaneous.  This Agreement (together with all other documents
and instruments  referred to herein):  (a) constitutes the entire  agreement and
supersedes all other prior agreements and  undertakings,  both written and oral,
among the parties with respect to the subject matter hereof; (b) is not intended
to confer upon any other person any rights or remedies  hereunder  and (c) shall
not be assigned by operation of law or otherwise.

         10.6     GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE
INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.

         10.7  Counterparts.  This  Agreement  may be  executed  in two or  more
counterparts which together shall constitute a single agreement.

                   [Balance of Page Intentionally Left Blank]

                    AGREEMENT AND PLAN OF REORGANIZATION - 32

<PAGE>



                      AGREEMENT AND PLAN OF REORGANIZATION

                                 Signature Page

         IN WITNESS WHEREOF,  the Acquiror,  the Merger Sub and the Company have
executed or caused  this  Agreement  to be  executed  on the date first  written
above.

                                            EUROMED, INC.


                          By:/s/: Robert A. Shuey, III
                                                 Name:Robert A. Shuey, III
                                                 Title:Chief Executive Officer

                           REDSTONE ACQUISITION CORP.


                             By:Robert A. Shuey III
                                                 Name:Robert A. Shuey III
                                                 Title:Chief Executive Officer


                            REDSTONE SECURITIES, INC.


                             By:/s/ Thomas Laundrie
                              Name:Thomas Laundrie
                                 Title:President



                    AGREEMENT AND PLAN OF REORGANIZATION - 33

<PAGE>



                                    EXHIBIT A

                          Form of Employment Agreement



<PAGE>


<TABLE>
<CAPTION>

                                     ANNEX I

                       Allocation of Merger Consideration



                                                                               Merger
                                                                            Consideration
                                                                  Number of
                                                                  Shares of
                                               Number of           Acquiror           Number of
                                                Company             Common            Restricted
               Shareholder                      Shares              Stock               Shares
               -----------                      ------              -----               ------
<S>                                              <C>               <C>                <C>

Richard Belz                                     320               366,667             166,667
Thomas Laundrie                                  320               366,667             166,667
Gary Purcell                                     320               366,666             166,666

</TABLE>


<PAGE>



                                    ANNEX II

                              Vesting Restrictions

         The  Restricted  Shares will vest as follows:  166,667  shares when the
Acquiror  Common  Stock has traded at $2.25 or more for twenty (20)  consecutive
trading days; an additional  166,667  shares when the Acquiror  Common Stock has
traded  at $3.75 or more for  twenty  (20)  consecutive  trading  days;  and the
remaining  166,666 shares when the Acquiror  Common Stock has traded at $5.25 or
more for twenty  (20)  consecutive  trading  days (all such prices and number of
shares  shall be  appropriately  adjusted in the event of any  reclassification,
stock  split  (including  a reverse  split),  stock  dividend  or  distribution,
recapitalization,  subdivision,  or other similar capital transaction  involving
the Acquiror Common Stock). Notwithstanding the foregoing, all of the Restricted
Shares will vest at any time that the Surviving  Corporation  reports annual net
income of more than (i) $200,000  during the calendar  year ending  December 31,
1999;  (ii) $350,000 during the calendar year ending December 31, 2000; or (iii)
$525,000  during the  calendar  year ending  December 31,  2001.  Any  remaining
Restricted  Shares will vest in their  entirety on the third  anniversary of the
Closing Date.



<PAGE>



                                    ANNEX III

                                 Excluded Assets

1. Accounts  receivable  (broker payable debit balance) from Ira Openden (not on
balance sheet).

2.       Accounts  receivable (broker payable debit balance) from Robert Shatles
         (not on balance sheet).

3. Accounts  receivable  (broker  payable debit balance) from Phil Piper (not on
balance sheet).

4.       Any proceeds from the Company's  lawsuit against Franklin  Consolidated
         Mining Co.  remaining after  repayment to the Surviving  Corporation of
         the  promissory  note  from Phil  Piper and any out of pocket  expenses
         incurred by the Company or the Surviving Corporation in connection with
         defending the counter suit.

5.       Fifty percent of consulting  options earned from Triangle Imaging Group
         after payment to Stanley Goldaber are to be excluded. The Acquiror will
         be  entitled to fifty  percent of the  consulting  options  earned from
         Triangle Imaging Group after payment to Stanley  Goldaber  provided the
         Acquiror (or someone on its behalf) provides  services and the research
         report to Triangle  Imaging Group and pays all outstanding  subloans of
         the Company.

6. Consulting options earned from Stelax.

7. Consulting options earned from An-Con Genetics, Inc.

8. Consulting options earned from Kaleidoscope Media Group, Inc.

9.       Promissory Note from The Trading Post, Inc.
         -    Balance sheet balance on 7/31/98                ..$45,500.00
         -    Balance sheet balance on 8/31/98                ...45,500.00
         -    Balance sheet balance on closing                ...32,000.00

10.      125,000 shares (pre-reverse split) of Transglobal Services, Inc. 
         (formerly Concept Technologies).

11. Four season tickets to New York Mets baseball games.












<PAGE>


                              EMPLOYMENT AGREEMENT


         THIS  EMPLOYMENT  AGREEMENT  is made and  entered  into this 6th day of
November,  1998,  by  and  between  REDSTONE  SECURITIES,  INC.,  a  New  Jersey
corporation (the "Employer"),  and Richard Belz,  residing at 101 Fairchild Ave,
Plainview, NY (the "Employee").

                              W I T N E S S E T H:

         1.  Employment.  The  Employer  hereby  employs the  Employee,  and the
Employee  hereby  accepts  such  employment,  upon the terms and  subject to the
conditions set forth in this Agreement.

         2.       Term.

         The term of employment  under this Agreement shall commence on the date
hereof  and  shall  continue  for a period of three  (3)  years  unless  earlier
terminated as herein provided.

         3.       Compensation; Reimbursement; etc.

         (a) The  Employer  shall pay to the  Employee as  compensation  for all
services  rendered  by the  Employee  during the term of this  Agreement a basic
annualized  salary of $60,000 per year (the "Basic Salary"),  or such other sums
as the parties may agree on from time to time,  payable monthly or in other more
frequent installments,  as determined by the Employer. The Basic Salary shall be
increased by ten percent (10%) each year.

         (b) In addition to the Basic Salary paid pursuant to Section 3(a),  the
Employer shall pay as incentive  compensation an annual bonus in an amount equal
to twenty percent (20%) of the amount that the annual net income of the Employer
is in excess of the Target  Earnings for such year. For purposes of this Section
3(b), the Target Earnings shall be $200,000 for calendar year 1999, $350,000 for
calendar year 2000 and $525,000 for calendar year 2001.

         (c) The  Employer  shall  reimburse  the  Employee  for all  reasonable
expenses  incurred by the Employee in the  performance  of his duties under this
Agreement;  provided, however, that the Employee must furnish to the Employer an
itemized  account,  satisfactory  to the  Employer,  in  substantiation  of such
expenditures.



<PAGE>




                                                         -5-





<PAGE>


         (d) The Employee shall be entitled to such fringe  benefits  including,
but not limited to, medical and insurance  benefits as may be provided from time
to  time  by  the  Employer  to  other  senior  officers  of  the  Employer,   a
non-accountable expense account and a car/insurance allowance. The value of such
fringe benefits (exclusive of any 401-K matching contributions made by Employer)
shall  initially be equal to $30,000 per year and shall  increase by ten percent
(10%) each year.

         (e) The Employee shall be entitled to a commission payout in the amount
of sixty percent (60%) on brokerage  transactions  effected by such Employee. No
ticket charges will be assessed against such commission payout.

         4.  Duties.  The  Employee is engaged as the  Vice-President  and Chief
Financial  Officer.  In addition,  the Employee shall have such other duties and
hold such other offices as may from time to time be  reasonably  assigned to him
by the Board of Directors of the Employer.

         5.       Extent of Services; Vacations and Days Off.

         (a)  During  the  term of his  employment  under  this  Agreement,  the
Employee shall devote such time,  energy and attention  during regular  business
hours to the benefit and business of the Employer as may be reasonably necessary
in performing his duties pursuant to this Agreement.

         (b) The Employee  shall be entitled to  vacations  with pay and to such
personal and sick leave with pay in  accordance  with the policy of the Employer
as may be  established  from time to time by the  Employer  and applied to other
senior officers of the Employer.

         6.       Illness or Incapacity, Termination on Death, Etc.

         (a) If the  Employee  dies  during  the  term  of his  employment,  the
Employer  shall pay to the estate of the Employee such  compensation,  including
any bonus  compensation  earned but not yet paid, as would  otherwise  have been
payable to the  Employee  up to the end of the month in which his death  occurs.
The Employer shall have no additional  financial obligation under this Agreement
to the Employee or his estate.  After  receiving  the payments  provided in this
subparagraph (a), the Employee and his estate shall have no further rights under
this Agreement.

         (b) (i) During any period of disability,  illness or incapacity  during
the term of this  Agreement  which  renders the  Employee  at least  temporarily
unable to perform the services  required under this Agreement for a period which
shall not equal or exceed one hundred and eighty  (180) days in any one (1) year
period,  the Employee shall receive the compensation  payable under Section 3(a)
of this Agreement plus any bonus compensation  earned but not yet paid, less any
benefits  received by him under any disability  insurance carried by or provided
by the Employer.  All rights of the Employee  under this  Agreement  (other than
rights already  accrued)  shall  terminate as provided below upon the Employee's
permanent disability (as defined below), although the Employee shall continue to
receive any disability benefits to which he may be entitled under any disability
income  insurance  which may be carried by or provided by the Employer from time
to time.



<PAGE>


                  (ii) The term "permanent disability" as used in this Agreement
shall  mean  the  inability  of the  Employee,  as  determined  by the  Board of
Directors of the Employer, by reason of physical or mental disability to perform
the duties  required of him under this Agreement for a period of one hundred and
eighty  (180) days in any one-year  period.  Successive  periods of  disability,
illness or  incapacity  will be  considered  separate  periods  unless the later
period of disability,  illness or incapacity is due to the same or related cause
and  commences  less than six months from the ending of the  previous  period of
disability.  Upon such  determination,  the Board of Directors may terminate the
Employee's  employment  under this  Agreement  upon ten (10) days' prior written
notice. If any determination of the Board of Directors with respect to permanent
disability is disputed by the Employee, the parties hereto agree to abide by the
decision of a panel of three  physicians.  The Employee and Employer  shall each
appoint one member,  and the third member of the panel shall be appointed by the
other two members.  The Employee agrees to make himself available for and submit
to examinations  by such physicians as may be directed by the Employer.  Failure
to submit to any such  examination  shall constitute a breach of a material part
of this Agreement.

         7.       Other Terminations.

         (a) (i) The Employee may terminate his employment hereunder upon giving
at least ninety (90) days' prior written notice.

                  (ii) If the  Employee  gives  notice  pursuant to Section 8(a)
above, the Employer shall have the right to relieve the Employee, in whole or in
part,  of his duties under this  Agreement  (without  reduction in  compensation
through the termination date).

         (b) (i) Except as otherwise  provided in this  Agreement,  the Employer
may terminate the  employment of the Employee  hereunder only for good cause and
upon  written  notice;  provided,  however,  that no  breach or  default  by the
Employee  shall be deemed to occur  hereunder  unless  the  Employee  shall have
failed to cure the breach or default  within  thirty (30) days after he received
written notice thereof indicating that it is a notice of termination pursuant to
this Section of this Agreement.

                  (ii)     As used herein, "good cause" shall include:

     (1) the Employee's  conviction of either a felony involving moral turpitude
or any crime in connection  with his employment by the Employer which causes the
Employer a substantial detriment.

     (2) actions by the Employee as an executive  officer of the Employer  which
clearly are contrary to the best interests of the Employer;

     (3) the  Employee's  willful  failure to take actions  permitted by law and
necessary to implement  policies of the Employer's  Board of Directors which the
Board of Directors has communicated to him in writing,  provided that minutes of
a Board of Directors  meeting  attended in its entirety by the Employee shall be
deemed communicated to the Employee;



<PAGE>


     (4)  the  Employee's  continued  failure  to  attend  to his  duties  as an
executive officer of the Employer; or

     (5) any condition  which either  resulted from the  Employee's  substantial
dependence, as determined by the Board of Directors of the Employer, on alcohol,
or  any  narcotic  drug  or  other  controlled  or  illegal  substance.  If  any
determination of substantial dependence is disputed by the Employee, the parties
hereto agree to abide by the decision of a panel of three  physicians  appointed
in the manner and subject to the same penalties for  noncompliance  as specified
in Section 7(b)(ii) of this Agreement.

                  (iii)  Termination  of  the  employment  of the  Employee  for
reasons  other than those  expressly  specified in this  Agreement as good cause
shall be deemed to be a termination of employment "without good cause."

         (c) (i) If the Employer shall  terminate the employment of the Employee
without  good  cause  effective  on a date  earlier  than the  termination  date
provided  for in  Section  2  (with  the  effective  date of  termination  as so
identified  by the  Employer  being  referred  to  herein  as  the  "Accelerated
Termination  Date"),  the Employee,  until the termination  date provided for in
Section  2 or  until  the  date  which  is  six  (6)  months  after  Accelerated
Termination Date,  whichever is later,  shall continue to receive the salary and
other  compensation  and employee  benefits that the Employer has  heretofore in
Section 3 agreed to pay and to  provide  for the  Employee,  in each case in the
amount  and kind and at the time  provided  for in  Section  3;  provided  that,
notwithstanding  such  termination of employment,  the Employee's  covenants set
forth in Section  10 and  Section 11 are  intended  to and shall  remain in full
force and effect.

                  (ii) The  parties  agree that,  because  there can be no exact
measure  of the  damage  that  would  occur to the  Employee  as a  result  of a
termination by the Employer of the Employee's employment without good cause, the
payments and benefits  paid and provided  pursuant to this Section 8(c) shall be
deemed to  constitute  liquidated  damages and not a penalty for the  Employer's
termination of the Employee's  employment  without good cause,  and the Employer
agrees that the Employee should not be required to mitigate his damages.

         (d) If the  employment  of the  Employee is  terminated  for good cause
under  Section  8(b)(ii)  of  this  Agreement,  or if the  Employee  voluntarily
terminates  his  employment by written notice to the Employer under Section 8(a)
of this  Agreement,  the Employer  shall pay to the  Employee  any  compensation
earned  but  not  paid  to the  Employee  prior  to the  effective  date of such
termination.  Under  such  circumstances,  such  payment  shall  be in full  and
complete  discharge of any and all liabilities or obligations of the Employer to
the  Employee  hereunder,  and the  Employee  shall be  entitled  to no  further
benefits under this Agreement.



<PAGE>


         8.  Disclosure.  The  Employee  agrees  that  during  the  term  of his
employment by the  Employer,  he will disclose and disclose only to the Employer
all ideas,  methods,  plans,  developments  or  improvements  known by him which
relate directly or indirectly to the business of the Employer,  whether acquired
by the Employee before or during his employment by the Employer. Nothing in this
Section 9 shall be construed as requiring any such communication where the idea,
plan,  method or  development is lawfully  protected from  disclosure as a trade
secret  of a  third  party  or by any  other  lawful  prohibition  against  such
communication.

         9.  Confidentiality.  The Employee agrees to keep in strict secrecy and
confidence any and all information  the Employee  assimilates or to which he has
access  during his  employment  by the Employer and which has not been  publicly
disclosed  and is not a matter of common  knowledge in the fields of work of the
Employer.  The  Employee  agrees  that  both  during  and  after the term of his
employment by the Employer,  he will not,  without the prior written  consent of
the Employer,  disclose any such  confidential  information to any third person,
partnership, joint venture, company, corporation or other organization.

         10.      Noncompetition and Nonsolicitation.

         The Employee hereby acknowledges that, during and solely as a result of
his  employment by the Employer,  he has received and shall continue to receive:
(1)  special  training  and  education  with  respect  to  the  operations  of a
registered broker/dealer in securities and other related matters, and (2) access
to  confidential   information  and  business  and  professional   contacts.  In
consideration of the special and unique  opportunities  afforded to the Employee
by the  Employer as a result of the  Employee's  employment,  as outlined in the
previous sentence, the Employee hereby agrees as follows:

         (a) During the term of the Employee's  employment,  whether pursuant to
this Agreement, any automatic or other renewal hereof or otherwise,  and, except
as may be  otherwise  herein  provided,  for a period of one (1) year  after the
termination  of his employment  with the Employer,  regardless of the reason for
such  termination,  the Employee  shall not,  directly or  indirectly,  exercise
control over any business which competes with the business of the Employer.  For
purposes of this  Agreement,  "control"  shall mean acting in a decision  making
capacity  for any person,  firm,  partnership,  corporation  or other  entity so
competing with the Employer (a "Competing  Entity").  The Employee shall not own
an equity interest in any Competing Entity.  The restrictions of this Section 10
shall not be violated by outside business  investments that do not in any manner
conflict  with the  services to be rendered by the Employee for the Employer and
that do not  diminish  or  detract  from the  Employee's  ability  to render his
required attention to the business of the Employer.

         (b) During  his  employment  with the  Employer  and,  except as may be
otherwise  herein  provided,  for a  period  of  two  (2)  years  following  the
termination  of his employment  with the Employer,  regardless of the reason for
such  termination,  the  Employee  agrees  he will  refrain  from and will  not,
directly  or  indirectly,  as  an  individual,   partner,   officer,   director,
stockholder,   employee,  advisor,   independent  contractor,   joint  venturer,
consultant, agent, representative,  salesman or otherwise (1) solicit any of the
employees of the Employer to terminate their employment or (2) accept employment
with or seek  remuneration  by any of the clients or  customers  of the Employer
with  whom  the  Employer  did  business  during  the  term  of  the  Employee's
employment.


<PAGE>


         (c) The period of time during  which the  Employee is  prohibited  from
engaging in certain business  practices  pursuant to Sections 10(a) or (b) shall
be extended by any length of time during which the Employee is in breach of such
covenants.

         (d) It is  understood  by and  between  the  parties  hereto  that  the
foregoing  restrictive  covenants  set forth in Sections  10(a)  through (c) are
essential  elements of this  Agreement,  and that,  but for the agreement of the
Employee to comply with such  covenants,  the Employer  would not have agreed to
enter into this Agreement.  Such covenants by the Employee shall be construed as
agreements  independent of any other provision in this Agreement.  The existence
of any claim or cause of action of the Employee  against the  Employer,  whether
predicated on this  Agreement,  or otherwise,  shall not constitute a defense to
the enforcement by the Employer of such covenants.

         (e) It is agreed by the Employer  and  Employee  that if any portion of
the covenants set forth in this Section 10 are held to be invalid, unreasonable,
arbitrary or against public policy, then such portion of such covenants shall be
considered  divisible  both as to time and  geographical  area. The Employer and
Employee  agree that,  if any court of  competent  jurisdiction  determines  the
specified  time period or the  specified  geographical  area  applicable to this
Section 10 to be invalid,  unreasonable,  arbitrary or against public policy,  a
lesser time period or  geographical  area which is determined to be  reasonable,
non-arbitrary  and  not  against  public  policy  may be  enforced  against  the
Employee.  The Employer and the Employee agree that the foregoing  covenants are
appropriate  and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.

         11. Specific Performance.  The Employee agrees that damages at law will
be an insufficient  remedy to the Employer if the Employee violates the terms of
Sections  9, 10 or 11 of this  Agreement  and that  the  Employer  would  suffer
irreparable damage as a result of such violation. Accordingly, it is agreed that
the  Employer  shall be  entitled,  upon  application  to a court  of  competent
jurisdiction,  to obtain  injunctive  relief to enforce the  provisions  of such
Sections,  which  injunctive  relief shall be in addition to any other rights or
remedies  available to the Employer.  The Employee agrees to pay to the Employer
all costs and expenses  incurred by the Employer  relating to the enforcement of
the terms of Sections 9, 10 or 11 of this Agreement,  including  reasonable fees
and disbursements of counsel (both at trial and in appellate proceedings).

         12.  Compliance  with Other  Agreements.  The Employee  represents  and
warrants that the execution of this Agreement by him and his  performance of his
obligations  hereunder  will not  conflict  with,  result  in the  breach of any
provision of or the  termination  of or constitute a default under any Agreement
to which the Employee is a party or by which the Employee is or may be bound.

         13. Waiver of Breach.  The waiver by the Employer of a breach of any of
the  provisions  of this  Agreement by the Employee  shall not be construed as a
waiver of any subsequent breach by the Employee.



<PAGE>


         14.  Binding  Effect;  Assignment.  The rights and  obligations  of the
Employer under this Agreement shall inure to the benefit of and shall be binding
upon the  successors  and assigns of the Employer.  This Agreement is a personal
employment  contract and the rights,  obligations  and interests of the Employee
hereunder may not be sold, assigned, transferred, pledged or hypothecated.

         15. Entire Agreement.  This Agreement contains the entire agreement and
supersedes  all prior  agreements  and  understandings,  oral or  written,  with
respect to the subject matter  hereof.  This Agreement may be changed only by an
agreement  in  writing  signed by the party  against  whom any  waiver,  change,
amendment, modification or discharge is sought.

         16.      Construction and Interpretation.

         (a) This Agreement  shall be construed  pursuant to and governed by the
laws of the State of New York.

         (b) The headings of the various sections in this Agreement are inserted
for convenience of the parties and shall not affect the meaning, construction or
interpretation of this Agreement.

         (c) Any provision of this  Agreement  which is determined by a court of
competent jurisdiction to be prohibited,  unenforceable or not authorized in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining  provisions  hereof  or  affecting  the  validity,  enforceability  or
legality of such  provision in any other  jurisdiction.  In any such case,  such
determination  shall not affect any other provision of this  Agreement,  and the
remaining provisions of this Agreement shall remain in full force and effect. If
any  provision  or  term  of  this  Agreement  is  susceptible  to two  or  more
constructions  or  interpretations,  one or  more  of  which  would  render  the
provision or term void or  unenforceable,  the parties agree that a construction
or interpretation which renders the term or provision valid shall be favored.

         17.  Notice.  All notices which are required or may be given under this
Agreement  shall be in writing  and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted by telecopy or
similar  electronic  transmission  method;  one working day after it is sent, if
sent by recognized  expedited delivery service;  and five days after it is sent,
if mailed,  first class mail,  certified mail,  return receipt  requested,  with
postage prepaid. In each case notice shall be sent to:



<PAGE>


2





         To the Employer:           Redstone Securities, Inc.
                                    8214 Westchester, Suite 500
                                    Dallas, Texas 75225
                                    Attn:  Robert A. Shuey, III
                                    Telecopy: (214) 987-2091

                                    With a copy to:
                                    Maurice J. Bates, Esq.
                                    8214 Westchester, Suite 500
                                    Dallas, Texas 75225
                                    Telecopy:  (214)987-2091

         To the Employee at his address herein first above written.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

                                                     REDSTONE SECURITIES, INC.


                                                     By: /s/ Thomas Laundrie
                                                          Name: Thomas Laundrie
                                                          Title: President


                                    EMPLOYEE:


                                                     /S/ Richard Belz



<PAGE>


                              EMPLOYMENT AGREEMENT


         THIS  EMPLOYMENT  AGREEMENT  is made and  entered  into this 6th day of
November,  1998,  by  and  between  REDSTONE  SECURITIES,  INC.,  a  New  Jersey
corporation (the "Employer"),  and Gary Purcell,  residing at 101 Fairchild Ave,
Plainview, NY (the "Employee").

                              W I T N E S S E T H:

         1.  Employment.  The  Employer  hereby  employs the  Employee,  and the
Employee  hereby  accepts  such  employment,  upon the terms and  subject to the
conditions set forth in this Agreement.

         2.       Term.

         The term of employment  under this Agreement shall commence on the date
hereof  and  shall  continue  for a period of three  (3)  years  unless  earlier
terminated as herein provided.

         3.       Compensation; Reimbursement; etc.

         (a) The  Employer  shall pay to the  Employee as  compensation  for all
services  rendered  by the  Employee  during the term of this  Agreement a basic
annualized  salary of $60,000 per year (the "Basic Salary"),  or such other sums
as the parties may agree on from time to time,  payable monthly or in other more
frequent installments,  as determined by the Employer. The Basic Salary shall be
increased by ten percent (10%) each year.

         (b) In addition to the Basic Salary paid pursuant to Section 3(a),  the
Employer shall pay as incentive  compensation an annual bonus in an amount equal
to twenty percent (20%) of the amount that the annual net income of the Employer
is in excess of the Target  Earnings for such year. For purposes of this Section
3(b), the Target Earnings shall be $200,000 for calendar year 1999, $350,000 for
calendar year 2000 and $525,000 for calendar year 2001.

         (c) The  Employer  shall  reimburse  the  Employee  for all  reasonable
expenses  incurred by the Employee in the  performance  of his duties under this
Agreement;  provided, however, that the Employee must furnish to the Employer an
itemized  account,  satisfactory  to the  Employer,  in  substantiation  of such
expenditures.



<PAGE>




7




<PAGE>


         (d) The Employee shall be entitled to such fringe  benefits  including,
but not limited to, medical and insurance  benefits as may be provided from time
to  time  by  the  Employer  to  other  senior  officers  of  the  Employer,   a
non-accountable expense account and a car/insurance allowance. The value of such
fringe benefits (exclusive of any 401-K matching contributions made by Employer)
shall  initially be equal to $30,000 per year and shall  increase by ten percent
(10%) each year.

         (e) The Employee shall be entitled to a commission payout in the amount
of sixty percent (60%) on brokerage  transactions  effected by such Employee. No
ticket charges will be assessed against such commission payout.

         4. Duties. The Employee is engaged as the Vice-President.  In addition,
the  Employee  shall have such other  duties and hold such other  offices as may
from time to time be reasonably assigned to him by the Board of Directors of the
Employer.


<PAGE>


         5.       Extent of Services; Vacations and Days Off.

         (a)  During  the  term of his  employment  under  this  Agreement,  the
Employee shall devote such time,  energy and attention  during regular  business
hours to the benefit and business of the Employer as may be reasonably necessary
in performing his duties pursuant to this Agreement.

         (b) The Employee  shall be entitled to  vacations  with pay and to such
personal and sick leave with pay in  accordance  with the policy of the Employer
as may be  established  from time to time by the  Employer  and applied to other
senior officers of the Employer.

         6.       Illness or Incapacity, Termination on Death, Etc.

         (a) If the  Employee  dies  during  the  term  of his  employment,  the
Employer  shall pay to the estate of the Employee such  compensation,  including
any bonus  compensation  earned but not yet paid, as would  otherwise  have been
payable to the  Employee  up to the end of the month in which his death  occurs.
The Employer shall have no additional  financial obligation under this Agreement
to the Employee or his estate.  After  receiving  the payments  provided in this
subparagraph (a), the Employee and his estate shall have no further rights under
this Agreement.

         (b) (i) During any period of disability,  illness or incapacity  during
the term of this  Agreement  which  renders the  Employee  at least  temporarily
unable to perform the services  required under this Agreement for a period which
shall not equal or exceed one hundred and eighty  (180) days in any one (1) year
period,  the Employee shall receive the compensation  payable under Section 3(a)
of this Agreement plus any bonus compensation  earned but not yet paid, less any
benefits  received by him under any disability  insurance carried by or provided
by the Employer.  All rights of the Employee  under this  Agreement  (other than
rights already  accrued)  shall  terminate as provided below upon the Employee's
permanent disability (as defined below), although the Employee shall continue to
receive any disability benefits to which he may be entitled under any disability
income  insurance  which may be carried by or provided by the Employer from time
to time.



<PAGE>


                  (ii) The term "permanent disability" as used in this Agreement
shall  mean  the  inability  of the  Employee,  as  determined  by the  Board of
Directors of the Employer, by reason of physical or mental disability to perform
the duties  required of him under this Agreement for a period of one hundred and
eighty  (180) days in any one-year  period.  Successive  periods of  disability,
illness or  incapacity  will be  considered  separate  periods  unless the later
period of disability,  illness or incapacity is due to the same or related cause
and  commences  less than six months from the ending of the  previous  period of
disability.  Upon such  determination,  the Board of Directors may terminate the
Employee's  employment  under this  Agreement  upon ten (10) days' prior written
notice. If any determination of the Board of Directors with respect to permanent
disability is disputed by the Employee, the parties hereto agree to abide by the
decision of a panel of three  physicians.  The Employee and Employer  shall each
appoint one member,  and the third member of the panel shall be appointed by the
other two members.  The Employee agrees to make himself available for and submit
to examinations  by such physicians as may be directed by the Employer.  Failure
to submit to any such  examination  shall constitute a breach of a material part
of this Agreement.

         7.       Other Terminations.

         (a) (i) The Employee may terminate his employment hereunder upon giving
at least ninety (90) days' prior written notice.

                  (ii) If the  Employee  gives  notice  pursuant to Section 8(a)
above, the Employer shall have the right to relieve the Employee, in whole or in
part,  of his duties under this  Agreement  (without  reduction in  compensation
through the termination date).

         (b) (i) Except as otherwise  provided in this  Agreement,  the Employer
may terminate the  employment of the Employee  hereunder only for good cause and
upon  written  notice;  provided,  however,  that no  breach or  default  by the
Employee  shall be deemed to occur  hereunder  unless  the  Employee  shall have
failed to cure the breach or default  within  thirty (30) days after he received
written notice thereof indicating that it is a notice of termination pursuant to
this Section of this Agreement.

                  (ii)     As used herein, "good cause" shall include:

(1) the Employee's  conviction of either a felony  involving  moral turpitude or
any crime in connection  with his  employment  by the Employer  which causes the
Employer a substantial detriment.
     (2) actions by the Employee as an executive  officer of the Employer  which
clearly are contrary to the best interests of the Employer;

(3)  the  Employee's  willful  failure  to  take  actions  permitted  by law and
necessary to implement  policies of the Employer's  Board of Directors which the
Board of Directors has communicated to him in writing,  provided that minutes of
a Board of Directors  meeting  attended in its entirety by the Employee shall be
deemed communicated to the Employee;



<PAGE>


     (4)  the  Employee's  continued  failure  to  attend  to his  duties  as an
executive officer of the Employer; or

     (5) any condition  which either  resulted from the  Employee's  substantial
dependence, as determined by the Board of Directors of the Employer, on alcohol,
or  any  narcotic  drug  or  other  controlled  or  illegal  substance.  If  any
determination of substantial dependence is disputed by the Employee, the parties
hereto agree to abide by the decision of a panel of three  physicians  appointed
in the manner and subject to the same penalties for  noncompliance  as specified
in Section 7(b)(ii) of this Agreement.

                  (iii)  Termination  of  the  employment  of the  Employee  for
reasons  other than those  expressly  specified in this  Agreement as good cause
shall be deemed to be a termination of employment "without good cause."

         (c) (i) If the Employer shall  terminate the employment of the Employee
without  good  cause  effective  on a date  earlier  than the  termination  date
provided  for in  Section  2  (with  the  effective  date of  termination  as so
identified  by the  Employer  being  referred  to  herein  as  the  "Accelerated
Termination  Date"),  the Employee,  until the termination  date provided for in
Section  2 or  until  the  date  which  is  six  (6)  months  after  Accelerated
Termination Date,  whichever is later,  shall continue to receive the salary and
other  compensation  and employee  benefits that the Employer has  heretofore in
Section 3 agreed to pay and to  provide  for the  Employee,  in each case in the
amount  and kind and at the time  provided  for in  Section  3;  provided  that,
notwithstanding  such  termination of employment,  the Employee's  covenants set
forth in Section  10 and  Section 11 are  intended  to and shall  remain in full
force and effect.

                  (ii) The  parties  agree that,  because  there can be no exact
measure  of the  damage  that  would  occur to the  Employee  as a  result  of a
termination by the Employer of the Employee's employment without good cause, the
payments and benefits  paid and provided  pursuant to this Section 8(c) shall be
deemed to  constitute  liquidated  damages and not a penalty for the  Employer's
termination of the Employee's  employment  without good cause,  and the Employer
agrees that the Employee should not be required to mitigate his damages.

         (d) If the  employment  of the  Employee is  terminated  for good cause
under  Section  8(b)(ii)  of  this  Agreement,  or if the  Employee  voluntarily
terminates  his  employment by written notice to the Employer under Section 8(a)
of this  Agreement,  the Employer  shall pay to the  Employee  any  compensation
earned  but  not  paid  to the  Employee  prior  to the  effective  date of such
termination.  Under  such  circumstances,  such  payment  shall  be in full  and
complete  discharge of any and all liabilities or obligations of the Employer to
the  Employee  hereunder,  and the  Employee  shall be  entitled  to no  further
benefits under this Agreement.



<PAGE>


         8.  Disclosure.  The  Employee  agrees  that  during  the  term  of his
employment by the  Employer,  he will disclose and disclose only to the Employer
all ideas,  methods,  plans,  developments  or  improvements  known by him which
relate directly or indirectly to the business of the Employer,  whether acquired
by the Employee before or during his employment by the Employer. Nothing in this
Section 9 shall be construed as requiring any such communication where the idea,
plan,  method or  development is lawfully  protected from  disclosure as a trade
secret  of a  third  party  or by any  other  lawful  prohibition  against  such
communication.

         9.  Confidentiality.  The Employee agrees to keep in strict secrecy and
confidence any and all information  the Employee  assimilates or to which he has
access  during his  employment  by the Employer and which has not been  publicly
disclosed  and is not a matter of common  knowledge in the fields of work of the
Employer.  The  Employee  agrees  that  both  during  and  after the term of his
employment by the Employer,  he will not,  without the prior written  consent of
the Employer,  disclose any such  confidential  information to any third person,
partnership, joint venture, company, corporation or other organization.

         10.      Noncompetition and Nonsolicitation.

         The Employee hereby acknowledges that, during and solely as a result of
his  employment by the Employer,  he has received and shall continue to receive:
(1)  special  training  and  education  with  respect  to  the  operations  of a
registered broker/dealer in securities and other related matters, and (2) access
to  confidential   information  and  business  and  professional   contacts.  In
consideration of the special and unique  opportunities  afforded to the Employee
by the  Employer as a result of the  Employee's  employment,  as outlined in the
previous sentence, the Employee hereby agrees as follows:

         (a) During the term of the Employee's  employment,  whether pursuant to
this Agreement, any automatic or other renewal hereof or otherwise,  and, except
as may be  otherwise  herein  provided,  for a period of one (1) year  after the
termination  of his employment  with the Employer,  regardless of the reason for
such  termination,  the Employee  shall not,  directly or  indirectly,  exercise
control over any business which competes with the business of the Employer.  For
purposes of this  Agreement,  "control"  shall mean acting in a decision  making
capacity  for any person,  firm,  partnership,  corporation  or other  entity so
competing with the Employer (a "Competing  Entity").  The Employee shall not own
an equity interest in any Competing Entity.  The restrictions of this Section 10
shall not be violated by outside business  investments that do not in any manner
conflict  with the  services to be rendered by the Employee for the Employer and
that do not  diminish  or  detract  from the  Employee's  ability  to render his
required attention to the business of the Employer.

         (b) During  his  employment  with the  Employer  and,  except as may be
otherwise  herein  provided,  for a  period  of  two  (2)  years  following  the
termination  of his employment  with the Employer,  regardless of the reason for
such  termination,  the  Employee  agrees  he will  refrain  from and will  not,
directly  or  indirectly,  as  an  individual,   partner,   officer,   director,
stockholder,   employee,  advisor,   independent  contractor,   joint  venturer,
consultant, agent, representative,  salesman or otherwise (1) solicit any of the
employees of the Employer to terminate their employment or (2) accept employment
with or seek  remuneration  by any of the clients or  customers  of the Employer
with  whom  the  Employer  did  business  during  the  term  of  the  Employee's
employment.


<PAGE>


         (c) The period of time during  which the  Employee is  prohibited  from
engaging in certain business  practices  pursuant to Sections 10(a) or (b) shall
be extended by any length of time during which the Employee is in breach of such
covenants.

         (d) It is  understood  by and  between  the  parties  hereto  that  the
foregoing  restrictive  covenants  set forth in Sections  10(a)  through (c) are
essential  elements of this  Agreement,  and that,  but for the agreement of the
Employee to comply with such  covenants,  the Employer  would not have agreed to
enter into this Agreement.  Such covenants by the Employee shall be construed as
agreements  independent of any other provision in this Agreement.  The existence
of any claim or cause of action of the Employee  against the  Employer,  whether
predicated on this  Agreement,  or otherwise,  shall not constitute a defense to
the enforcement by the Employer of such covenants.

         (e) It is agreed by the Employer  and  Employee  that if any portion of
the covenants set forth in this Section 10 are held to be invalid, unreasonable,
arbitrary or against public policy, then such portion of such covenants shall be
considered  divisible  both as to time and  geographical  area. The Employer and
Employee  agree that,  if any court of  competent  jurisdiction  determines  the
specified  time period or the  specified  geographical  area  applicable to this
Section 10 to be invalid,  unreasonable,  arbitrary or against public policy,  a
lesser time period or  geographical  area which is determined to be  reasonable,
non-arbitrary  and  not  against  public  policy  may be  enforced  against  the
Employee.  The Employer and the Employee agree that the foregoing  covenants are
appropriate  and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.

         11. Specific Performance.  The Employee agrees that damages at law will
be an insufficient  remedy to the Employer if the Employee violates the terms of
Sections  9, 10 or 11 of this  Agreement  and that  the  Employer  would  suffer
irreparable damage as a result of such violation. Accordingly, it is agreed that
the  Employer  shall be  entitled,  upon  application  to a court  of  competent
jurisdiction,  to obtain  injunctive  relief to enforce the  provisions  of such
Sections,  which  injunctive  relief shall be in addition to any other rights or
remedies  available to the Employer.  The Employee agrees to pay to the Employer
all costs and expenses  incurred by the Employer  relating to the enforcement of
the terms of Sections 9, 10 or 11 of this Agreement,  including  reasonable fees
and disbursements of counsel (both at trial and in appellate proceedings).

         12.  Compliance  with Other  Agreements.  The Employee  represents  and
warrants that the execution of this Agreement by him and his  performance of his
obligations  hereunder  will not  conflict  with,  result  in the  breach of any
provision of or the  termination  of or constitute a default under any Agreement
to which the Employee is a party or by which the Employee is or may be bound.

         13. Waiver of Breach.  The waiver by the Employer of a breach of any of
the  provisions  of this  Agreement by the Employee  shall not be construed as a
waiver of any subsequent breach by the Employee.



<PAGE>


         14.  Binding  Effect;  Assignment.  The rights and  obligations  of the
Employer under this Agreement shall inure to the benefit of and shall be binding
upon the  successors  and assigns of the Employer.  This Agreement is a personal
employment  contract and the rights,  obligations  and interests of the Employee
hereunder may not be sold, assigned, transferred, pledged or hypothecated.

         15. Entire Agreement.  This Agreement contains the entire agreement and
supersedes  all prior  agreements  and  understandings,  oral or  written,  with
respect to the subject matter  hereof.  This Agreement may be changed only by an
agreement  in  writing  signed by the party  against  whom any  waiver,  change,
amendment, modification or discharge is sought.

         16.      Construction and Interpretation.

         (a) This Agreement  shall be construed  pursuant to and governed by the
laws of the State of New York.

         (b) The headings of the various sections in this Agreement are inserted
for convenience of the parties and shall not affect the meaning, construction or
interpretation of this Agreement.

         (c) Any provision of this  Agreement  which is determined by a court of
competent jurisdiction to be prohibited,  unenforceable or not authorized in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining  provisions  hereof  or  affecting  the  validity,  enforceability  or
legality of such  provision in any other  jurisdiction.  In any such case,  such
determination  shall not affect any other provision of this  Agreement,  and the
remaining provisions of this Agreement shall remain in full force and effect. If
any  provision  or  term  of  this  Agreement  is  susceptible  to two  or  more
constructions  or  interpretations,  one or  more  of  which  would  render  the
provision or term void or  unenforceable,  the parties agree that a construction
or interpretation which renders the term or provision valid shall be favored.

         17.  Notice.  All notices which are required or may be given under this
Agreement  shall be in writing  and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted by telecopy or
similar  electronic  transmission  method;  one working day after it is sent, if
sent by recognized  expedited delivery service;  and five days after it is sent,
if mailed,  first class mail,  certified mail,  return receipt  requested,  with
postage prepaid. In each case notice shall be sent to:



<PAGE>






                                    To the Employer:
                                    Redstone Securities, Inc.
                                    8214 Westchester, Suite 500
                                    Dallas, Texas 75225
                                    Attn:  Robert A. Shuey, III
                                    Telecopy:  (214) 987-2091

                                    With a copy to:
                                    Maurice J. Bates, Esq.
                                    8214 Westchester, Suite 500
                                    Dallas, Texas 75225
                                    Telecopy:  214/987-2091

         To the Employee at his address herein first above written.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

                            REDSTONE SECURITIES, INC.


                             By: Robert A. Shuey III
                           Name: Robert A. Shuey, III
                         Title: Chief Executive Officer


                                    EMPLOYEE:

                                /s/ Gary Purcell

                                  Gary Purcell


<PAGE>



                              EMPLOYMENT AGREEMENT


         THIS  EMPLOYMENT  AGREEMENT  is made and  entered  into this 6th day of
November,  1998,  by  and  between  REDSTONE  SECURITIES,  INC.,  a  New  Jersey
corporation (the  "Employer"),  and Thomas  Laundrie,  residing at 101 Fairchild
Ave, Plainview, NY (the "Employee").

                              W I T N E S S E T H:

         1.  Employment.  The  Employer  hereby  employs the  Employee,  and the
Employee  hereby  accepts  such  employment,  upon the terms and  subject to the
conditions set forth in this Agreement.

         2.       Term.

         The term of employment  under this Agreement shall commence on the date
hereof  and  shall  continue  for a period of three  (3)  years  unless  earlier
terminated as herein provided.

         3.       Compensation; Reimbursement; etc.

         (a) The  Employer  shall pay to the  Employee as  compensation  for all
services  rendered  by the  Employee  during the term of this  Agreement a basic
annualized  salary of $60,000 per year (the "Basic Salary"),  or such other sums
as the parties may agree on from time to time,  payable monthly or in other more
frequent installments,  as determined by the Employer. The Basic Salary shall be
increased by ten percent (10%) each year.

         (b) In addition to the Basic Salary paid pursuant to Section 3(a),  the
Employer shall pay as incentive  compensation an annual bonus in an amount equal
to twenty percent (20%) of the amount that the annual net income of the Employer
is in excess of the Target  Earnings for such year. For purposes of this Section
3(b), the Target Earnings shall be $200,000 for calendar year 1999, $350,000 for
calendar year 2000 and $525,000 for calendar year 2001.

         (c) The  Employer  shall  reimburse  the  Employee  for all  reasonable
expenses  incurred by the Employee in the  performance  of his duties under this
Agreement;  provided, however, that the Employee must furnish to the Employer an
itemized  account,  satisfactory  to the  Employer,  in  substantiation  of such
expenditures.



<PAGE>




                                                        -14-





<PAGE>


         (d) The Employee shall be entitled to such fringe  benefits  including,
but not limited to, medical and insurance  benefits as may be provided from time
to  time  by  the  Employer  to  other  senior  officers  of  the  Employer,   a
non-accountable expense account and a car/insurance allowance. The value of such
fringe benefits (exclusive of any 401-K matching contributions made by Employer)
shall  initially be equal to $30,000 per year and shall  increase by ten percent
(10%) each year.

         (e) The Employee shall be entitled to a commission payout in the amount
of sixty percent (60%) on brokerage  transactions  effected by such Employee. No
ticket charges will be assessed against such commission payout.

         4. Duties. The Employee is engaged as the President.  In addition,  the
Employee  shall have such other  duties and hold such other  offices as may from
time to time be  reasonably  assigned  to him by the Board of  Directors  of the
Employer.


<PAGE>


5.       Extent of Services; Vacations and Days Off.

         (a)  During  the  term of his  employment  under  this  Agreement,  the
Employee shall devote such time,  energy and attention  during regular  business
hours to the benefit and business of the Employer as may be reasonably necessary
in performing his duties pursuant to this Agreement.

         (b) The Employee  shall be entitled to  vacations  with pay and to such
personal and sick leave with pay in  accordance  with the policy of the Employer
as may be  established  from time to time by the  Employer  and applied to other
senior officers of the Employer.

         6.       Illness or Incapacity, Termination on Death, Etc.

         (a) If the  Employee  dies  during  the  term  of his  employment,  the
Employer  shall pay to the estate of the Employee such  compensation,  including
any bonus  compensation  earned but not yet paid, as would  otherwise  have been
payable to the  Employee  up to the end of the month in which his death  occurs.
The Employer shall have no additional  financial obligation under this Agreement
to the Employee or his estate.  After  receiving  the payments  provided in this
subparagraph (a), the Employee and his estate shall have no further rights under
this Agreement.

         (b) (i) During any period of disability,  illness or incapacity  during
the term of this  Agreement  which  renders the  Employee  at least  temporarily
unable to perform the services  required under this Agreement for a period which
shall not equal or exceed one hundred and eighty  (180) days in any one (1) year
period,  the Employee shall receive the compensation  payable under Section 3(a)
of this Agreement plus any bonus compensation  earned but not yet paid, less any
benefits  received by him under any disability  insurance carried by or provided
by the Employer.  All rights of the Employee  under this  Agreement  (other than
rights already  accrued)  shall  terminate as provided below upon the Employee's
permanent disability (as defined below), although the Employee shall continue to
receive any disability benefits to which he may be entitled under any disability
income  insurance  which may be carried by or provided by the Employer from time
to time.



<PAGE>


                  (ii) The term "permanent disability" as used in this Agreement
shall  mean  the  inability  of the  Employee,  as  determined  by the  Board of
Directors of the Employer, by reason of physical or mental disability to perform
the duties  required of him under this Agreement for a period of one hundred and
eighty  (180) days in any one-year  period.  Successive  periods of  disability,
illness or  incapacity  will be  considered  separate  periods  unless the later
period of disability,  illness or incapacity is due to the same or related cause
and  commences  less than six months from the ending of the  previous  period of
disability.  Upon such  determination,  the Board of Directors may terminate the
Employee's  employment  under this  Agreement  upon ten (10) days' prior written
notice. If any determination of the Board of Directors with respect to permanent
disability is disputed by the Employee, the parties hereto agree to abide by the
decision of a panel of three  physicians.  The Employee and Employer  shall each
appoint one member,  and the third member of the panel shall be appointed by the
other two members.  The Employee agrees to make himself available for and submit
to examinations  by such physicians as may be directed by the Employer.  Failure
to submit to any such  examination  shall constitute a breach of a material part
of this Agreement.

         7.       Other Terminations.

         (a) (i) The Employee may terminate his employment hereunder upon giving
at least ninety (90) days' prior written notice.

                  (ii) If the  Employee  gives  notice  pursuant to Section 8(a)
above, the Employer shall have the right to relieve the Employee, in whole or in
part,  of his duties under this  Agreement  (without  reduction in  compensation
through the termination date).

         (b) (i) Except as otherwise  provided in this  Agreement,  the Employer
may terminate the  employment of the Employee  hereunder only for good cause and
upon  written  notice;  provided,  however,  that no  breach or  default  by the
Employee  shall be deemed to occur  hereunder  unless  the  Employee  shall have
failed to cure the breach or default  within  thirty (30) days after he received
written notice thereof indicating that it is a notice of termination pursuant to
this Section of this Agreement.

                  (ii)     As used herein, "good cause" shall include:

     (1) the Employee's  conviction of either a felony involving moral turpitude
or any crime in connection  with his employment by the Employer which causes the
Employer a substantial detriment.

     (2) actions by the Employee as an executive  officer of the Employer  which
clearly are contrary to the best interests of the Employer;

     (3) the  Employee's  willful  failure to take actions  permitted by law and
necessary to implement  policies of the Employer's  Board of Directors which the
Board of Directors has communicated to him in writing,  provided that minutes of
a Board
of Directors  meeting  attended in its entirety by the Employee  shall be deemed
communicated to the Employee;



<PAGE>

     (4)  the  Employee's  continued  failure  to  attend  to his  duties  as an
executive officer of the Employer; or

     (5) any condition  which either  resulted from the  Employee's  substantial
dependence, as determined by the Board of Directors of the Employer, on alcohol,
or  any  narcotic  drug  or  other  controlled  or  illegal  substance.  If  any
determination of substantial dependence is disputed by the Employee, the parties
hereto agree to abide by the decision of a panel of three  physicians  appointed
in the manner and subject to the same penalties for  noncompliance  as specified
in Section 7(b)(ii) of this Agreement.

                  (iii)  Termination  of  the  employment  of the  Employee  for
reasons  other than those  expressly  specified in this  Agreement as good cause
shall be deemed to be a termination of employment "without good cause."

         (c) (i) If the Employer shall  terminate the employment of the Employee
without  good  cause  effective  on a date  earlier  than the  termination  date
provided  for in  Section  2  (with  the  effective  date of  termination  as so
identified  by the  Employer  being  referred  to  herein  as  the  "Accelerated
Termination  Date"),  the Employee,  until the termination  date provided for in
Section  2 or  until  the  date  which  is  six  (6)  months  after  Accelerated
Termination Date,  whichever is later,  shall continue to receive the salary and
other  compensation  and employee  benefits that the Employer has  heretofore in
Section 3 agreed to pay and to  provide  for the  Employee,  in each case in the
amount  and kind and at the time  provided  for in  Section  3;  provided  that,
notwithstanding  such  termination of employment,  the Employee's  covenants set
forth in Section  10 and  Section 11 are  intended  to and shall  remain in full
force and effect.

                  (ii) The  parties  agree that,  because  there can be no exact
measure  of the  damage  that  would  occur to the  Employee  as a  result  of a
termination by the Employer of the Employee's employment without good cause, the
payments and benefits  paid and provided  pursuant to this Section 8(c) shall be
deemed to  constitute  liquidated  damages and not a penalty for the  Employer's
termination of the Employee's  employment  without good cause,  and the Employer
agrees that the Employee should not be required to mitigate his damages.

         (d) If the  employment  of the  Employee is  terminated  for good cause
under  Section  8(b)(ii)  of  this  Agreement,  or if the  Employee  voluntarily
terminates  his  employment by written notice to the Employer under Section 8(a)
of this  Agreement,  the Employer  shall pay to the  Employee  any  compensation
earned  but  not  paid  to the  Employee  prior  to the  effective  date of such
termination.  Under  such  circumstances,  such  payment  shall  be in full  and
complete  discharge of any and all liabilities or obligations of the Employer to
the  Employee  hereunder,  and the  Employee  shall be  entitled  to no  further
benefits under this Agreement.



<PAGE>


         8.  Disclosure.  The  Employee  agrees  that  during  the  term  of his
employment by the  Employer,  he will disclose and disclose only to the Employer
all ideas,  methods,  plans,  developments  or  improvements  known by him which
relate directly or indirectly to the business of the Employer,  whether acquired
by the Employee before or during his employment by the Employer. Nothing in this
Section 9 shall be construed as requiring any such communication where the idea,
plan,  method or  development is lawfully  protected from  disclosure as a trade
secret  of a  third  party  or by any  other  lawful  prohibition  against  such
communication.

         9.  Confidentiality.  The Employee agrees to keep in strict secrecy and
confidence any and all information  the Employee  assimilates or to which he has
access  during his  employment  by the Employer and which has not been  publicly
disclosed  and is not a matter of common  knowledge in the fields of work of the
Employer.  The  Employee  agrees  that  both  during  and  after the term of his
employment by the Employer,  he will not,  without the prior written  consent of
the Employer,  disclose any such  confidential  information to any third person,
partnership, joint venture, company, corporation or other organization.

         10.      Noncompetition and Nonsolicitation.

         The Employee hereby acknowledges that, during and solely as a result of
his  employment by the Employer,  he has received and shall continue to receive:
(1)  special  training  and  education  with  respect  to  the  operations  of a
registered broker/dealer in securities and other related matters, and (2) access
to  confidential   information  and  business  and  professional   contacts.  In
consideration of the special and unique  opportunities  afforded to the Employee
by the  Employer as a result of the  Employee's  employment,  as outlined in the
previous sentence, the Employee hereby agrees as follows:

         (a) During the term of the Employee's  employment,  whether pursuant to
this Agreement, any automatic or other renewal hereof or otherwise,  and, except
as may be  otherwise  herein  provided,  for a period of one (1) year  after the
termination  of his employment  with the Employer,  regardless of the reason for
such  termination,  the Employee  shall not,  directly or  indirectly,  exercise
control over any business which competes with the business of the Employer.  For
purposes of this  Agreement,  "control"  shall mean acting in a decision  making
capacity  for any person,  firm,  partnership,  corporation  or other  entity so
competing with the Employer (a "Competing  Entity").  The Employee shall not own
an equity interest in any Competing Entity.  The restrictions of this Section 10
shall not be violated by outside business  investments that do not in any manner
conflict  with the  services to be rendered by the Employee for the Employer and
that do not  diminish  or  detract  from the  Employee's  ability  to render his
required attention to the business of the Employer.

         (b) During  his  employment  with the  Employer  and,  except as may be
otherwise  herein  provided,  for a  period  of  two  (2)  years  following  the
termination  of his employment  with the Employer,  regardless of the reason for
such  termination,  the  Employee  agrees  he will  refrain  from and will  not,
directly  or  indirectly,  as  an  individual,   partner,   officer,   director,
stockholder,   employee,  advisor,   independent  contractor,   joint  venturer,
consultant, agent, representative,  salesman or otherwise (1) solicit any of the
employees of the Employer to terminate their employment or (2) accept employment
with or seek  remuneration  by any of the clients or  customers  of the Employer
with  whom  the  Employer  did  business  during  the  term  of  the  Employee's
employment.


<PAGE>


         (c) The period of time during  which the  Employee is  prohibited  from
engaging in certain business  practices  pursuant to Sections 10(a) or (b) shall
be extended by any length of time during which the Employee is in breach of such
covenants.

         (d) It is  understood  by and  between  the  parties  hereto  that  the
foregoing  restrictive  covenants  set forth in Sections  10(a)  through (c) are
essential  elements of this  Agreement,  and that,  but for the agreement of the
Employee to comply with such  covenants,  the Employer  would not have agreed to
enter into this Agreement.  Such covenants by the Employee shall be construed as
agreements  independent of any other provision in this Agreement.  The existence
of any claim or cause of action of the Employee  against the  Employer,  whether
predicated on this  Agreement,  or otherwise,  shall not constitute a defense to
the enforcement by the Employer of such covenants.

         (e) It is agreed by the Employer  and  Employee  that if any portion of
the covenants set forth in this Section 10 are held to be invalid, unreasonable,
arbitrary or against public policy, then such portion of such covenants shall be
considered  divisible  both as to time and  geographical  area. The Employer and
Employee  agree that,  if any court of  competent  jurisdiction  determines  the
specified  time period or the  specified  geographical  area  applicable to this
Section 10 to be invalid,  unreasonable,  arbitrary or against public policy,  a
lesser time period or  geographical  area which is determined to be  reasonable,
non-arbitrary  and  not  against  public  policy  may be  enforced  against  the
Employee.  The Employer and the Employee agree that the foregoing  covenants are
appropriate  and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.

         11. Specific Performance.  The Employee agrees that damages at law will
be an insufficient  remedy to the Employer if the Employee violates the terms of
Sections  9, 10 or 11 of this  Agreement  and that  the  Employer  would  suffer
irreparable damage as a result of such violation. Accordingly, it is agreed that
the  Employer  shall be  entitled,  upon  application  to a court  of  competent
jurisdiction,  to obtain  injunctive  relief to enforce the  provisions  of such
Sections,  which  injunctive  relief shall be in addition to any other rights or
remedies  available to the Employer.  The Employee agrees to pay to the Employer
all costs and expenses  incurred by the Employer  relating to the enforcement of
the terms of Sections 9, 10 or 11 of this Agreement,  including  reasonable fees
and disbursements of counsel (both at trial and in appellate proceedings).

         12.  Compliance  with Other  Agreements.  The Employee  represents  and
warrants that the execution of this Agreement by him and his  performance of his
obligations  hereunder  will not  conflict  with,  result  in the  breach of any
provision of or the  termination  of or constitute a default under any Agreement
to which the Employee is a party or by which the Employee is or may be bound.

         13. Waiver of Breach.  The waiver by the Employer of a breach of any of
the  provisions  of this  Agreement by the Employee  shall not be construed as a
waiver of any subsequent breach by the Employee.



<PAGE>


         14.  Binding  Effect;  Assignment.  The rights and  obligations  of the
Employer under this Agreement shall inure to the benefit of and shall be binding
upon the  successors  and assigns of the Employer.  This Agreement is a personal
employment  contract and the rights,  obligations  and interests of the Employee
hereunder may not be sold, assigned, transferred, pledged or hypothecated.

         15. Entire Agreement.  This Agreement contains the entire agreement and
supersedes  all prior  agreements  and  understandings,  oral or  written,  with
respect to the subject matter  hereof.  This Agreement may be changed only by an
agreement  in  writing  signed by the party  against  whom any  waiver,  change,
amendment, modification or discharge is sought.

         16.      Construction and Interpretation.

         (a) This Agreement  shall be construed  pursuant to and governed by the
laws of the State of New York.

         (b) The headings of the various sections in this Agreement are inserted
for convenience of the parties and shall not affect the meaning, construction or
interpretation of this Agreement.

         (c) Any provision of this  Agreement  which is determined by a court of
competent jurisdiction to be prohibited,  unenforceable or not authorized in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining  provisions  hereof  or  affecting  the  validity,  enforceability  or
legality of such  provision in any other  jurisdiction.  In any such case,  such
determination  shall not affect any other provision of this  Agreement,  and the
remaining provisions of this Agreement shall remain in full force and effect. If
any  provision  or  term  of  this  Agreement  is  susceptible  to two  or  more
constructions  or  interpretations,  one or  more  of  which  would  render  the
provision or term void or  unenforceable,  the parties agree that a construction
or interpretation which renders the term or provision valid shall be favored.

         17.  Notice.  All notices which are required or may be given under this
Agreement  shall be in writing  and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted by telecopy or
similar  electronic  transmission  method;  one working day after it is sent, if
sent by recognized  expedited delivery service;  and five days after it is sent,
if mailed,  first class mail,  certified mail,  return receipt  requested,  with
postage prepaid. In each case notice shall be sent to:



<PAGE>


         To the Employer:           Redstone Securities, Inc.
                                    8214 Westchester, Suite 500
                                    Dallas, Texas 75225
                                    Attn:  Robert A. Shuey, III
                                    Telecopy:  (214) 987-2091

                                    With a copy to:
                                    Maurice J. Bates, Esq.
                                    8214 Westchester, Suite 500
                                    Dallas, Texas 75225
                                    Telecopy:  (214) 987-2091

         To the Employee at his address herein first above written.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

                                                     REDSTONE SECURITIES, INC.


                             By: Robert A. Shuey III
                           Name: Robert A. Shuey, III
                         Title: Chief Executive Officer

                                    EMPLOYEE:


                               /s/ Thomas Laundrie
                                 Thomas Laundrie


<PAGE>


                             AMENDMENT TO AGREEMENT
                                       AND
                             PLAN OF REORGANIZARION

WHEREAS,  the  undersigned  are  parties  to a  certain  Agreement  and  Plan of
Reorganization dated November 6, 1998; and

         WHEREAS,  Article  3.1(a)(2)  and  Article  8.4 set  forth the terms of
conversion and disposition of the Equity Subordinated Lender Shares; and

         WHEREAS, the parties desire to amend said articles as follows:


         1. The Equity  subordinated  Lender  Shares held ten shares each by EMH
Enterprises,  Richard Belz,  Thomas Laundire and Gary Purcell shall be delivered
along with a stock power  endorsed in blank to Charles M.  O'Rourke,  Esq. to be
held in escrow until said escrow agent  receives  evidence  that the NASD Equity
Subordinated Loans to Redstone Securities, Inc. by lenders is paid in full. Upon
such  evidence of payment,  the 40 Equity  subordinated  Lender  Shares shall be
delivered  by the escrow agent to the Company and such shares shall be cancelled
without further consideration to the Lenders.


         2. All references in the above stated  articles to the  cancellation of
the Equity Subordinated Lender Shares at the Effective Time is hereby amended to
read that such  Shares  shall be  cancelled  at the time of payoff of the Equity
Subordinated Loans outstanding held by said Lenders.


         IN WITNESS WHEREOF, the Acquiror, the Merger Sub and the Company have


<PAGE>


executed or caused this Amended agreement to be executed  effective this 3rd day
of February 1999.

                                  EUROMED, Inc.
                          By: /s/ Robert A. Shuey, III
                           Name: Robert A. Shuey, III
                         Title: Chief Executive Officer

                           REDSTONE ACQUISITION CORP.
                          By: /s/ Robert A. Shuey, III
                           Name: Robert A. Shuey, III
                         Title: Chief Executive Officer

                           REDSTONE SECURITIES, INC..
                       By: /s/ Thomas Laundrie, President
                              Name: Thomas Laundrie
                                Title: President

                              Agreed and Accepted:
                                /s/ Richard Belz
                                  Richard Belz

                               /s/ Thomas Laundrie
                                 Thomas Laundrie

                                /s/ Gary Purcell
                                  Gary Purcell

                                 EMH ENTERPRISES


                         By: /s/ Abe Fishman____________
                                   Abe Fishman