<PAGE>

                                                                   EXHIBIT 10.12
 
                           ASSET PURCHASE AGREEMENT

                            COTTONWOOD VENTURES, LC
                                       &
                         TELALEASING ENTERPRISES, INC.



     THIS ASSET PURCHASE AGREEMENT ("Agreement") is made June 4, 1996, by and
between Cottonwood Venture, LC, hereinafter referred to as "Cottonwood" or
"Seller," and Telaleasing Enterprises, Inc., hereinafter referred to as
"Telaleasing", "TEI", "Purchaser" or "Buyer".

                             W I T N E S S E T H,
                             ------------------- 

     WHEREAS, the Seller owns and operates pay telephones and related service
facilities pursuant to agreements which are sometimes styled "Public
Communication Location Agreements," "Public Telephone Equipment and Service
Contracts," "Pay Telephone Agreements," Coin Operated Telephone Equipment and
Service Contracts," "Contracts," "Pay Phone Location Agreements," "Royalty
Agreements," "Vending Agreements," "Leases," or other similar names and
hereinafter are called "Location Agreements"; and

     WHEREAS, Cottonwood is an Iowa Limited Liability Company, and

     WHEREAS Winegard Realty Company and Western States Financial Group, Inc.
are the sole members of Cottonwood. Western States Financial Group, Inc. is an
Iowa Corporation and Winegard Realty Company is an Iowa Corporation solely owned
by Winegard Company. Western States Financial Group, Inc., Winegard Realty
Company and Winegard Company will jointly and severally guarantee fully,
absolutely and without recourse the performance and obligations of Cottonwood
hereunder.

     WHEREAS, Purchaser is an Illinois corporation, solely owned by Davel
Communications Group, Inc. ("Davel"). Davel will guarantee fully, absolutely and
without recourse the performance and obligations of Purchaser hereunder.

     WHEREAS, Purchaser is in the business of owning and operating pay
telephones and providing associated services; and

     WHEREAS, Purchaser and Seller entered into a Letter of Intent dated May 1,
1996 and a Memorandum of Agreement subsequent thereto on May 8, 1996 which
Letter and Memorandum were assigned to Davel's wholly owned subsidiary,
Telaleasing Enterprises, Inc. Said Letter of Intent and Memorandum contemplate
the transaction memorialized by this Agreement. Any rights, duties and
obligations of Davel, Telaleasing or Cottonwood created by, or arising out of,
said Letter of Intent or Memorandum are terminated and void as of the date of
this Agreement. This Agreement shall be the sole
<PAGE>
 
expression of the intent of the parties, their rights duties and obligations
with respect to all matters arising out of the transaction contemplated by the
Letter of Intent, the Memorandum or this Agreement.

     WHEREAS, Subject to the terms and conditions hereinafter set forth, the
Seller desires to sell, and the Purchaser desires to purchase all of Seller's
installed paytelephones consisting of units in Arizona, Iowa and Utah together
with associated Location Agreements, equipment, software, furniture, fixtures,
computers, office equipment, parts, contracts and inventory.

     NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree as follows:

     1.   ASSETS TO BE PURCHASED.

          Subject to the terms and conditions set forth herein, Purchaser agrees
to purchase and acquire from the Seller, and the Seller agrees to sell,
transfer, assign and convey to the Purchaser, free and clear of any and all
liens and encumbrances (excepting obligations imposed by the Location Agreements
which shall be assumed by Purchaser) approximately 909 installed Pay Telephones
located in Arizona, Iowa and Utah ("Installed Pay Telephones"), associated
enclosures, equipment, inventory, software, computers, fixtures, furniture,
tools, parts, supplies, associated Location Agreements, the name "Cottonwood"
and all assets and records directly used in the operation of the Installed Pay
Telephones. All of said assets, including the Installed Pay Telephones, may be
collectively referred to herein as the "Assets" and are more fully described
below. No liabilities are assumed by the Purchaser except as explicitly
described in this Agreement. The Assets include, but are not limited to, the
following:

          (a)  Installed Pay Telephones, Equipment and Location Agreements. All
equipment, communications equipment, Pay Telephones, enclosures, masts, cables,
wiring, electrical wiring, conduit, slabs and related property used in
connection with, or located at, all of Seller's Installed Pay Telephones and
associated Location Agreements, a true and correct list of which is attached
hereto as Exhibit 1-a. No transfer of any FCCI based technology or equipment is
intended by this paragraph. Any FCCI technology or equipment present in the
Installed Pay Telephone Base at Closing shall be removed by Buyer and returned
to Seller as soon as practical. All rights, duties, obligations and liabilities
arising out of the Location Agreements and attributable to periods prior to
Closing shall be retained by Seller and all such rights, duties, obligations and
liabilities attributable to periods after Closing shall be assumed by and be the
property and obligation of the Purchaser. A few Location Agreements may not be
memorialized by a writing but are nonetheless assigned by this Agreement. All
written Location Agreements are listed in Exhibit 1-a and the originals of said
Agreement are attached to Exhibit 1-a,
 
          (b)  Equipment and Inventory. As described in Exhibit 1-b. No sale or
transfer of any FCCI based technology or equipment is intended by this
paragraph,

          (c)  Business Records. As requested by Purchaser, all business records
and copies of financial records directly pertaining to the Assets or necessary
for the operation of the Assets,

          (d)  Warranties and Licenses. All warranties and licenses and patents,
if any and to the extent transferable, relating to any of Assets including, but
not limited to, computer software licenses. No sale or transfer of any FCCI
based technology, licences or software is intended by this paragraph,

          (e)  Prepaid Expenses and Deposits. All coin in the Pay Telephones at
Closing for which Seller shall receive a credit at Closing, above and beyond the
purchase price, based on polling procedures satisfactory to the parties.

          (f)  Accounts Receivable. All accounts receivable attributable to
periods after Closing. Seller shall provide such notification to payers
regarding payment for amounts attributable to post closing
<PAGE>
 
periods as Purchaser shall reasonably request. All accounts receivable
attributable to periods prior to closing shall remain the property of Seller and
are not conveyed hereby.

          (g)  Revenues. All revenues attributable to periods subsequent to
Closing.

          (h)  Name. Buyer shall have the right to use the name "Cottonwood" in
its pay phone and telecommunications operations; however, Seller makes no
representation that it has any proprietary or exclusive right to such name.
 
     2.   CONSIDERATION.

          (a)  Purchase Price. As consideration for the transfer and assignment
of the Assets, Purchaser shall pay a total purchase price computed as follows:

               (i)   $2,850.00 for each Installed Pay Telephone as of the
Closing, but not to exceed 909 Installed Pay Telephones. All Installed Pay
Telephones shall have been installed prior to May 8, 1996 except for 21 to be
installed in Arizona which shall be installed prior to Closing; plus,

               (ii)  $10,000 for 15 locations and associated contracts some of
which are fully or partially installed as further set forth on Exhibit 2(a)(ii);
plus,

               (iii) $400 for each Protel Upgrade Kit in inventory as of
Closing. A Protel upgrade kit shall consist of a new or fully warranted as if
new refurbished Protel 2000 or 7000 series circuit board, relay and cable; less,

               (iv)  $600 for each Installed Pay Telephone which has not been
upgraded with a 2000 or 7000 series Protel circuit board.

          (b)  Payment at Closing. 91.5% of the purchase price shall be paid in
by wire transfer to Seller's account as directed by Seller at Closing. The
balance of the purchase price shall be paid at Closing into escrow and held and
paid as set forth at (P) 18. The escrowed amount is held as security against,
and is subject to deduction for, Sellers failure to perform its representations,
warranties and covenants herein including but not limited to payment by Seller
of those items specified in paragraphs 3(l), 3(m), 3(o), 3(q), 3(r), 6(b), 11,
12, 14 and 15 of this Agreement.
 



     3.   REPRESENTATIONS AND WARRANTIES.

                    Seller's Representations and Warranties

          The Seller represents and warrants to the Purchaser that the following
are true and correct as of the date hereof, and will be true and correct on the
Closing Date except as Seller may notify Purchaser prior to Closing in a signed
writing. Any such notification prior to Closing which modifies any of the
following representations and warranties shall, at the sole option of Purchaser,
result in termination of this Agreement without any liability for such
termination to Seller:

          (a)  Taxes. No claim or liability is pending or has been assessed or
asserted, or has been threatened against the Seller in connection with any taxes
which are, or may, become a lien against the Assets.

          (b)  Financial Information. The Seller has furnished to Buyer detailed
financial information which is accurate in all material respects. To the best of
Seller's knowledge no fact or condition
<PAGE>
 
exists, or is contemplated or threatened, which would have a material adverse
effect on the business of Seller or the Assets.

          (c)  No Finders or Brokers. No agent, broker or other person acting
pursuant to the Seller' authority is entitled to make any claim against the
Purchaser or the Seller for any commission or finder's fee in connection with
the transactions contemplated by this Agreement except that Lanier Consulting is
entitled to a commission from the Seller the payment of which commission shall
be the sole obligation of the Seller. Buyer shall have no obligation hereunder
to pay or direct funds to Lanier.

          (d)  Approval of Government Agencies. No approval of any governmental
or administrative agency or authority is required as a condition to the
execution and delivery of this Agreement by the Seller or its consummation of
the transactions contemplated hereby.

          (e)  Approval of Third Parties. There is no unobtained approval of any
third party, except pursuant to release of liens, required as a condition to the
execution and delivery of this Agreement by the Seller or the consummation of
the transactions contemplated hereby. The obligation for the receipt of all such
approvals shall rest solely with Seller and is a condition precedent to Closing
and payment.

          (f)  No Prohibition Against Purchaser. The Seller is not a party to,
or otherwise subject to, any agreement, indenture, instrument, lease, judgment
or any other decree or any other regulation or demand of any government, bureau,
board or agency which would prohibit the consummation of the transaction
contemplated by his Agreement or would otherwise be breached or impaired by such
consummation.

          (g)  Title to Assets. The Seller is the owner of all the Assets and
will convey the Assets to the Purchaser free and clear of all mortgages,
pledges, liens (including liens for taxes due and payable), encumbrances,
charges, claims, title retention agreements or other security interests or
arrangements except as specifically provided herein. Purchaser shall assume no
responsibility for any liability, claim or obligation of Seller arising prior to
the date of Closing and otherwise only as provided in this Agreement.

          (h)  Litigation. Seller has operated the Assets in material compliance
with all applicable laws, rules and regulations except as may be immaterial to
this transaction. There are no actions, lawsuits or proceedings pending or
threatened against the Seller in law or in equity (except for a threatened suit
by First Continental Communications, Inc. and Bruce Boland or related entities)
or before any governmental agency, that if determined adversely to the Seller
would materially affect the Assets being sold hereunder or that would bring into
question the validity of this Agreement or any action taken or to be taken in
accordance with or in connection with this Agreement.

          (i)  Contractual Interests. The Location Agreements are in full force
and effect. To the best of Seller's knowledge there are no existing defaults
under these agreements on the part of Seller, which are, individually or in the
aggregate, material to the operation of the Assets. All available originals, and
where none is available an exact copy, if available, of each Location Agreement
as scheduled at Exhibit 1-b and associated documents have been furnished to the
Purchaser. The Seller is not a party to any other material contract, agreement
or understanding (whether oral or written) relating to the Assets or Location
Agreements.

          (j)  Fixed Assets and Inventory. The Assets conveyed by this Agreement
are conveyed in an "as is" condition and no warranty as to condition or fitness
is made except that Seller warrants that all Installed Pay Telephones are
operational (except to the extent pending, filed applications for lines have not
been approved) as of Closing and that it has no knowledge of any condition or
state of the Assets which would have a material adverse effect on the Assets,
taken as a whole.
<PAGE>
 
          (k)  Employment Agreements. Seller has no employment or consulting
contracts relating to the Assets which will cause any lien to attach or charge
to be imposed on or against the Assets.

          (l)  Location Agreements. Seller warrants that as of the execution of
this Agreement, it has no knowledge of any claims existing or contemplated
against Seller whatsoever by the parties to the Location Agreements.

          (m)  Payment of All Taxes. The Seller has paid, or will pay as they
become due, all sales, excise, use, income or other taxes or similar charges due
and payable or to become due and payable by Seller for all periods prior to
Closing, the non-payment of which may subject Purchaser to liability, jointly or
severally, in whole or in part for such amounts. Notwithstanding anything to the
contrary contained in this Agreement, Seller shall be responsible and liable for
all taxes relating to the Assets or their use on or before the Closing and
Purchaser shall be responsible and liable for all taxes relating to the Assets
and their use after Closing. After the Closing, each party shall cooperate with
the other in dealing with any taxing authority with respect to the business
conducted and the Assets. Purchaser may, at its sole discretion if Seller has
failed to pay such taxes or charges within 10 days of Seller's receipt of
written notice, pay said taxes or charges and (i) give prompt notice to Seller
for reimbursement, such reimbursement to be made within three (3) business days;
or (ii) pay such taxes or charges and deduct same as a credit against the
balance of the purchase price or any other consideration due to Seller. Buyer
shall not pay any such taxes which are the subject of dispute between Seller and
the applicable taxing authority provided Seller gives Buyer written notice of
such dispute and provided that such non-payment does not disrupt or interfere
with Buyer's continued use or revenues from the purchased assets. This provision
does not relieve Seller from its obligation to pay such charges or taxes if
Purchaser does not avail itself of the foregoing remedies.

          (n)  Noncancelability of Location Agreements. The Location Agreements
are not terminable due to the execution of this Agreement or the performance of
the terms hereof.

          (o)  Payment of All Commissions. The Seller has paid, or will pay, on
or prior to the Closing Date, all commissions due from Seller or attributable to
periods prior to Closing under all Location Agreements. Alternatively, the
Seller shall pay such commissions as they become due after the Closing for the
period before the Closing. If the Seller fails to pay any such commissions
arising for periods before the Closing, the Purchaser may pay any such
commissions at its sole discretion if Seller has failed to pay such commissions
within 10 days of Seller's receipt of written notice, pay said commissions and
(i) give prompt notice to Seller for reimbursement, such reimbursement to be
made within three (3) business days; or (ii) pay such commissions and deduct
same as a credit against the balance of the purchase price or any other
consideration due to Seller. Buyer shall not pay any such commissions which are
the subject of dispute between Seller and the applicable location provided
Seller gives Buyer written notice of such dispute and provided that such non-
payment does not disrupt or interfere with Buyer's continued use or revenues
from the purchased assets. This provision does not relieve Seller from its
obligation to pay such commissions if Purchaser does not avail itself of the
foregoing remedies.

          (p)  Installed Pay Telephone Keys. The Seller has delivered to the
Purchaser, on or prior to the Closing Date, all keys to the Installed Pay
Telephones, including keys to the upper housing and lower housing, and there are
no other keys or copies thereof held by any other parties, including employees
of Seller to the best of Seller's knowledge and belief.

          (q)  Payment of Telephone Charges. The Seller has paid, or will pay,
on the later of the Closing date or when billed by the local exchange carrier,
all telephone bills and charges due from the Seller to the local exchange
carrier, any interexchange carriers or to any other entity or party for services
provided for all periods prior to Closing and attributable to the Assets.
Alternatively, the Purchaser may pay any such bills and charges at its sole
discretion if Seller has failed to pay such bills and charges within 10 days of
Seller's receipt of written notice, pay said bills and charges and (i) give
prompt notice to Seller for reimbursement, such reimbursement to be made within
three (3) business days; or (ii) pay such bills and deduct same as a credit
against the balance of the purchase price or any other consideration due to
Seller. Buyer shall not pay any such bills or charges which are the subject of
dispute between Seller and the
<PAGE>
 
applicable creditor authority provided Seller gives Buyer written notice of such
dispute and provided that such non-payment does not disrupt or interfere with
Buyer's continued use or revenues from the purchased assets. This provision does
not relieve Seller from its obligation to pay such bills or charges if Purchaser
does not avail itself of the foregoing remedies.

          (r)  Corporate Standing. Cottonwood Venture, L..C. is a Limited
Liability Company duly organized and validly existing in good standing under the
laws of the State of Iowa with full power an authority to own its properties and
conduct its business as conducted. Seller shall provide a Certificate of
Existence from the State of Iowa as of a recent date satisfactory to Buyer.

          (s)  Corporate Authority. This Agreement and the transactions
contemplated hereby have been duly and validly authorized and, at Closing, good
title to the Assets will be vested in the Seller and transferred to the
Purchaser free and clear of any claims or encumbrances except for any liens
created by Purchaser or obligations of Purchaser. This Agreement shall, when
executed, be a valid and binding obligation of Seller and its Guarantors. Seller
shall provide Purchaser at or prior to Closing with Certified Resolutions and a
Managing Member's Certificate substantially in the form as provided at Exhibit
3-s as evidence of authority for the transaction memorialized by this agreement.

                  Purchaser's Representations and Warranties

     The Purchaser represents and warrants to the Seller that the following are
true and correct as of the date hereof, and will be true and correct on the
Closing Date except as Purchaser may notify Seller prior to Closing in a signed
writing. Any such notification prior to Closing which modifies any of the
following representations and warranties shall, at the sole option of Seller,
result in termination of this Agreement without any liability for such
termination to Purchaser:

          (t)  No Finders or Brokers. No agent, broker or other person acting
pursuant to the Purchaser's authority is entitled to make any claim against the
Seller for any commission or finder's fee in connection with the transactions
contemplated by this Agreement. Lanier Consulting is entitled to a commission
from the Seller, pursuant to Seller's agreement with Lanier, the payment of
which commission shall be the sole obligation of the Seller. Buyer shall have no
obligation hereunder to pay or direct funds to Lanier.

          (u)  Approval of Government Agencies. No approval of any governmental
or administrative agency or authority is required as a condition to the
execution and delivery of this Agreement by the Purchaser or its consummation of
the transactions contemplated hereby.

          (v)  Approval of Third Parties. No approval of any third party is
required as a condition to the execution and delivery of this Agreement by the
Purchaser or its consummation of the transactions contemplated hereby. The
obligation for the receipt of any such approvals shall rest solely with Seller
and is a condition precedent to Closing and payment.

          (w)  No Prohibition Against Purchaser. The Purchaser is not a party
to, or otherwise subject to, any agreement, indenture, instrument, lease,
judgment or any other decree or any other regulation or demand of any
government, bureau, board or agency which would prohibit the consummation of the
transactions contemplated by his Agreement or would otherwise be breached or
impaired by such consummation.

          (x)  Corporate Standing. Telaleasing Enterprises, Inc. is a
corporation duly organized and validly existing in good standing under the laws
of the State of Illinois with full power and authority to own its properties and
conduct its business as conducted.

          (y)  Corporate Authority. This Agreement and the transactions
contemplated hereby have been duly and validly authorized and Purchaser shall
provide at or prior to Closing the Seller with
<PAGE>
 
Certified Resolutions or other reasonable evidence of authority for the
transaction memorialized by this agreement.

     4.   ACCESS TO RECORDS/VERIFICATION OF ASSETS.

          Prior to Closing Seller will permit representatives of Purchaser full
access to all the property, books, contracts, documents, records, reports, and
data bases of Seller relating to the Assets and will furnish such information
concerning same as Purchaser or its agents may reasonably request. Purchaser and
Seller agree that the basis for the establishment of the purchase price is the
financial statements and accounting information previously provided and the
number of Installed Pay Telephones.

     5.   DUE DILIGENCE.

          This Agreement shall be binding upon the parties effective as of the
date of execution subject to verification, by the Purchaser, from information,
records, documents and other items provided by the Seller sufficient to verify
the factual basis for the warranties and representations made to it by the
Seller herein.

     6.   TRANSITION MATTERS.

          (a)  Implementation of Change With Owners. After Closing Seller shall
fully cooperate with Purchaser, but only as specifically requested from time to
time, in advising parties to the Location Agreements that the business of Seller
is under new management as of the date of Closing and to advise them as to the
manner in which to place requests for service in the future.

          (b)  Non-Coin Long Distance. Seller is entitled to receive
compensation for long distance traffic from 0+ and 0- traffic from Operator
Service Providers. All such commissions, payments or other monies due and owing
Seller attributable to periods prior to Closing shall be the property of Seller
and shall be properly paid to Seller. This and any other property of Seller
which may come into Purchaser's possession shall be promptly delivered by
Purchaser to Seller. All such commissions, payments or other monies due and
owing Seller attributable to periods after Closing shall be the property of
Purchaser and shall be properly payable to Purchaser. This and any other
property of Purchaser which may come into Seller's possession shall be promptly
delivered by Seller to Purchaser. After Closing Seller shall provide such
notification to payors regarding payment for amounts attributable to post
closing periods as Purchaser shall reasonably request. Seller agrees to assist
as required in the implementation of any change of Long Distance Provider
requested by Purchaser after Closing Date subject to compliance with applicable
regulations.

          (c)  Coin. The parties shall poll the phones at Closing and Seller
shall be credited for all coin in the phones at Closing. Buyer shall be entitled
thereafter to remove and retain all coin in the phone at Closing without further
accounting to Seller for such coin.

          (d)  Local Lines. After Closing Seller will cooperate in the transfer
of local telephone company lines and services to Purchaser, as required.
Purchaser shall use its reasonable best efforts to proceed promptly to effect a
transfer of service to the local exchange carrier and will accomplish all such
transfers no later than July 15, 1996.

          (e)  Records and Rate Files. Seller shall cooperate with Purchaser in
making available all rate files, databases and similar information prior to
Closing to facilitate the transfer of the Installed Pay Telephones to Buyer at
Closing. Seller will cooperate in providing such records in a format and media
convenient to Buyer.
<PAGE>
 
          (f)  Public Utility Commissions. Seller shall fully cooperate with
Buyer in obtaining the approval of the Arizona Public Utility Commission for the
operation of the Installed Pay Telephones located in Arizona. Such cooperation
shall include, but not be limited to, Buyer's use of Seller's authority, if any,
pending approval of Buyer's application for COCOT authority, which shall be
promptly filed and prosecuted by Buyer. Similar cooperation shall be provided
within the States of Iowa and Utah. In the event Buyer's use of said COCOT
authority is in violation of applicable law or regulation or causes any such
violation, then Seller shall have the right to rescind such use.

          (g)  FCCI Based Technology. There is no intention by this Agreement to
sell or otherwise transfer to Buyer any technology, equipment, licenses,
software or other items, tangible or intangible, which relate in any manner to
FCCI based technology. To the extent such items are in possession of Buyer after
Closing they shall be promptly returned to Seller. At Closing there may be
certain Installed Pay Telephones utilizing circuit boards based on FCCI
technology, Buyer shall as soon as practical replace such circuit boards and
return those based on FCCI technology to Seller.

     7.   CLOSING.

          The transactions contemplated by this Agreement shall be consummated
on or before June 4, 1996. Said date shall be known herein as "the Closing Date"
or the "Closing." The Seller and the Purchaser shall take the following actions
on the Closing Date:

          (a)  The Seller shall deliver to the Purchaser the following fully
executed documents as a condition precedent to payment:

               (i)   A Bill of Sale substantially in the form as set forth at
                     Exhibit 7-a-i transferring ownership of the Assets except
                     for those items conveyed pursuant to (P)7(a)(ii).

               (ii)  An Assignment and Assumption of the Location Agreements
                     substantially in the form as set forth at Exhibit 7-a-ii;
 
               (iii) All existing, available originally executed Location
                     Agreements;

               (iv)  Such other documents as may be reasonably required to
                     consummate and evidence the transactions and transfers
                     contemplated by this Agreement as may be requested by
                     Buyer.

          (b)  The Purchaser shall pay the sums provided to Seller and the
Escrow agent as set forth and in the manner provided by (P)2.

          (c)  Transfer of Assets. On or prior to Closing Seller shall deliver
all of the Assets to Purchaser. Seller shall deliver all keys (and any copies
thereof) to all Installed Pay Telephones (both upper housing and lower housing
keys).

          (d)  Place of Closing. All transactions contemplated herein shall be
consummated at Seller's Iowa office or at such other places the parties may
mutually determine in writing.

          (e)  Exhibits. Any Exhibits not provided at the time of execution of
this Agreement shall be provided at or prior to Closing.

     8.   CONTINUING RELATIONSHIPS.
<PAGE>
 
     The Seller agrees to use its reasonable efforts for a period not to exceed
30 days from closing to assure an orderly transition and favorable business
relationship between the Purchaser and Seller's existing phone customers and
suppliers. The Seller shall not, from and after the Closing Date, solicit orders
from such customers. In addition, the Seller shall, from and after such time,
direct to the Purchaser all inquiries from such customers and other persons
regarding the business of Seller. The Seller shall, from and after the Closing
Date, maintain the absolute confidentiality of all matters relating to the
Assets and business for three (3) years following the Closing Date. Except for
information which Seller has made publicly available or is otherwise in the
public domain, Purchaser shall not use or disclose any information which
Purchaser may have acquired concerning the Seller, or the business practices of
Seller, that are not directly related to the Assets. Without limiting the
foregoing and except for information which Seller has made publicly available or
is otherwise in the public domain, Purchaser shall not use or divulge to any
third person any financial information concerning the Seller, including, but not
limited to, the Financial Statements (except for financial information directly
related to the Installed Pay Telephones). None of the foregoing restrictions on
disclosure by Seller or Purchaser shall apply to disclosures mandated by a
court, taxing authority or other governmental entity with authority to require
such disclosure.

     Except for passive investment as less than a 10% shareholder in any
publicly traded company, neither Seller nor any of its members and certain
individuals including but not limited to Randy Winegard and Robert W. Seery,
shall for a period of thirty-six (36) months from the date of Closing directly
or indirectly, own, manage, operate, join, control, participate in, advise, or
be connected in any manner with any person, firm, corporation or other entity
which is, or becomes engaged in the operation of pay telephones or in the
solicitation for the installation or sale of any associated services, including
but not limited to long distance services, to any customers of Seller within the
States of Utah, Iowa and Arizona or any person or entity within such States.
This covenant on the part of the Seller, its officers and shareholders shall be
construed as an agreement independent of any other provisions of this Agreement.
The parties hereto agree that this restrictive covenant may be enforced in law
or in equity, including, but not limited to, injunctive relief against Seller.
The parties hereto agree that in the event of the breach of this restrictive
covenant, the Purchaser and related entities may not have an adequate remedy at
law other than an injunction, or that damages will be difficult to ascertain as
the result of such breach and that, if an injunction is sought by the Purchaser
or related entities, Seller waives any requirement that the Purchaser post any
bond and the unsuccessful party agrees to pay any attorneys' fees and court
costs in the event the successful party receives its requested relief.

     This paragraph, (P)8, shall not apply to or hinder in any way Seller's
operation of its approximately eight installed pay telephones in the State of
New York which are not subject to this Agreement.

     9.   CONDUCT OF BUSINESS.

          From the date of this Agreement through the Closing Date, the Seller
shall:

          (a)  not enter into any material or unusual contracts affecting the
business of Seller without the prior written consent of the Purchaser;

          (b)  not create any security interests in any of the Assets;

          (c)  continue to operate the business in a routine and regular
fashion.

     10.  CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.

          The obligations of the Purchaser to acquire the Assets in accordance
with the terms of this Agreement and the obligations of Seller to sell the
Assets shall be subject to the fulfillment on, or prior to, the Closing Date of
each of the following conditions:
<PAGE>
 
          (a)  Accuracy of Representations. All representations and warranties
of the Purchaser and Seller contained in this Agreement, and Exhibits hereto or
otherwise made in writing pursuant to this Agreement shall be true and correct
in all material respects on the Closing Date with the same force and effect as
though made on and as of the Closing Date.

          (b)  Performance of Obligations. The Seller and Purchaser shall have
performed and complied with all of the obligations and conditions required by
this Agreement to be performed or complied with by Seller and Purchaser on or
prior to the Closing Date.

          (c)  No Change of Condition and Due Diligence. The Assets shall not
have been adversely affected in any way, directly or indirectly, which would
affect Purchaser's operation or use of the Assets.

          (d)  State Regulatory Qualification. There shall be no bar to the
operation of the Installed Pay Telephones by Buyer in Arizona immediately after
Closing due to regulatory requirements of Arizona.

     11.  BULK TRANSFERS.

          The parties agree that Seller and Purchaser will not comply with the
requirements of any applicable law dealing with bulk transfers of assets. Seller
agree to indemnify and hold Purchaser harmless from any loss, expenses, costs
(including legal fees and expenses) incurred by Purchaser from failure to so
comply.

     12.  COMPLIANCE WITH TAX PROVISIONS.

          Seller agrees to indemnify and hold Purchaser harmless from and
against any and all sales, excise, use, income or other taxes due as a result of
this transaction. If the Seller does not pay any such taxes the Purchaser may
pay any such taxes at its sole discretion if Seller has failed to pay such taxes
within 10 days of Seller's receipt of written notice, pay said taxes and (i)
give prompt notice to Seller for reimbursement, such reimbursement to be made
within three (3) business days; or (ii) pay such taxes and deduct same as a
credit against the balance of the purchase price or any other consideration due
to Seller. This provision does not relieve Seller from its obligation to pay
such taxes if Purchaser does not avail itself of the foregoing remedies.
Purchaser shall not pay any such taxes which are the subject of dispute between
Seller and the applicable taxing authority provided Seller gives Purchaser
written notice of such dispute and provided that such non-payment does not
disrupt or interfere with Purchaser's continued use or revenues from the
purchased assets. Notwithstanding the foregoing, Purchaser knows of no taxes,
sales taxes, excise taxes, use taxes or other taxes (other than federal income
taxes) that will become due as a result of the transactions contemplated by this
Agreement.

          Purchaser agrees to indemnify and hold Seller harmless from and
against any and all sales, excise, use, income or other taxes due as a result of
Purchaser's use or operation of the Assets on and after the Closing Date. If the
Purchaser does not pay any such taxes the Seller may pay any such taxes at its
sole discretion if Purchaser has failed to pay such taxes within 10 days of
Purchaser's receipt of written notice, pay said taxes and give prompt notice to
Purchaser for reimbursement, such reimbursement to be made within three (3)
business days. This provision does not relieve Purchaser from its obligation to
pay such taxes if Seller does not avail itself of the foregoing remedy. Seller
shall not pay any such taxes which are the subject of dispute between Purchaser
and the applicable taxing authority provided Purchaser gives Seller written
notice of such dispute. Notwithstanding the foregoing, Purchaser knows of no
taxes, sales taxes, excise taxes, use taxes or other taxes (other than federal
income taxes) that will become due as a result of the transactions contemplated
by this Agreement.
<PAGE>
 
     13.  ADDITIONAL INSTRUMENTS.

          The Seller agree from time to time, upon the request of the Purchaser,
to execute and deliver to the Purchaser such other instruments of sale,
transfer, assignment and conveyance and to take such other action as the
Purchaser may reasonably request to effectively vest ownership in the Purchaser
of all of the Assets sold, transferred, assigned and conveyed hereunder.

     14.  EXPENSES.

          Each party hereto shall pay all expenses incurred by it in connection
with the negotiation, execution and performance of this Agreement, whether or
not the transactions contemplated herein are consummated, including the fees and
expenses of the counsel and accountants of each.

     15.  INDEMNIFICATION.

          (a)  Seller. The Seller agrees to indemnify the Purchaser fully and
hold the Purchaser harmless from and against and in respect of all demands,
actions or causes of action, assessments, losses, damages, liabilities,
judgments, costs and reasonable expenses asserted against or incurred by the
Purchaser arising out of a breach of any representation, warranty or agreement
of the Seller contained in this Agreement or in any Exhibit hereto or arising
out of any act or omission of the Seller prior to the Closing Date (except with
respect of liabilities specifically assumed by the Purchaser). Further, without
limitation of the foregoing, Seller agrees to indemnify the Purchaser fully and
hold the Purchaser harmless from and against and in respect of all demands,
actions or causes of action, assessments, losses, damages, liabilities,
judgments, costs and reasonable expenses asserted against or incurred by the
Purchaser arising out of any claim or action by First Continental
Communications, Inc. and Bruce Boland or related entities and which claim could
have been asserted against Seller based on facts existing prior to Closing. In
no event shall Seller's aggregate obligation under this section, 15(a), exceed
the purchase price paid to it under section 2 hereof.

          (b)  Purchaser. The Purchaser agrees to indemnify the Seller fully and
hold the Seller harmless from and against and in respect of all demands,
actions, or causes of action, assessments, losses, damages, liabilities,
judgements, costs and reasonable expenses asserted against or incurred by the
Seller arising out of a breach of any representation, warranty or agreement of
the Purchaser contained in this Agreement or in any Exhibit hereto or arising
out of any act or omission of the Purchaser after the Closing Date (except with
respect of liabilities specifically retained by the Seller).

          (c)  De Minimus Recovery Limitation. Notwithstanding the provisions of
sections 15(a) and 15(b) no party shall be liable for any indemnification or
breach of representation or warranty until the amount of all damages or losses
exceeds $5,000 in the aggregate. The limitations of this section shall not apply
to any operating liabilities or revenues or taxes. Once the $5,000 limit is
exceeded, the party liable shall be liable for the entire amount of such loss or
damage, including the $5,000 threshold amount.

          (d)  Method of Asserting and Handling Claims For Indemnification. In
the event that any claims or demand for which an Indemnifying Party would be
liable to an Indemnified Party under this Agreement is asserted against or
sought to be collected from such Indemnified Party by a third party, the
Indemnified Party shall promptly notify in writing the Indemnifying Party of
such claim or demand, specifying the nature of and specific basis for such claim
or demand and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of such
claim and demand (the "Claim Notice")). The Indemnifying Party shall not be
obligated to indemnify the Indemnified Party with respect to any such claim or
demand if the Indemnified Party fails to notify the Indemnifying Party thereof
in accordance with the provisions of this Agreement in reasonably sufficient
time so that the Indemnifying Party's ability to defend against the claim or
demand is not prejudiced. The Indemnifying Party shall have thirty (30) days
from the personal delivery or mailing of the Claim Notice (the
<PAGE>
 
"Notice Period") to notify the Indemnified Party (i) whether or not the
Indemnifying Party disputes its liability to the Indemnified Party hereunder
with respect to such claim or demand and (ii) whether or not the Indemnifying
Party desires, at its sole cost and expense, to defend the Indemnified Party
against such claim or demand. In the event that the Indemnifying Party notified
the Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand and except as hereinafter
provided, the Indemnifying Party shall have the right to defend by all
appropriate proceedings, and control the settlement of any such claim or
proceeding which proceedings shall be settled or prosecuted by him to a final
conclusion. If the Indemnified Party desires to participate in, but not control,
any such defense or settlement it may do so at its sole cost and expense. If
requested by the Indemnifying Party, the Indemnified Party agrees to cooperate
with the Indemnifying Party and its counsel in contesting any claim or demand
which the Indemnifying Party elects to contest, including, without limitation,
by executing or causing to have executed any power of attorney authorizing the
Indemnifying Party to act on behalf of the Indemnified Party or the Companies,
or, if appropriate and related to the claim in question, in making any
counterclaim against the person asserting the third-party claim or demand, or
any cross-complaint against any person. No claim may be settled without the
consent of the Indemnifying Party.

     16.  SURVIVAL OF REPRESENTATION.

          All representations, warranties and agreements contained in this
Agreement or any Exhibit hereto or made pursuant of the transactions
contemplated by this Agreement shall survive the Closing Date for a period of
twelve months from the Closing Date.

     17.  MISCELLANEOUS PROVISIONS.

          (a)  Publicity. All notices to third parties and all other publicity
concerning the transaction contemplated by this Agreement shall be planned and
coordinated by Seller and Purchaser. Seller and Purchaser agree not to make any
public disclosure regarding this transaction without the prior written approval
of other, except as otherwise required by this Agreement, or applicable law.
Nothing in this paragraph 17 shall prevent Buyer from disclosing elements of
this agreement to financial analysts, accountants and others in the financial
community in the normal course of its business.

          (b)  Effect of Headings. The subject headings of the articles,
sections and paragraphs of this Agreement are included for purposes of
convenience only and shall not affect the construction or interpretation of any
of its provisions.

          (c)  Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

          (d)  Waiver of Compliance. Any failure of Purchaser, on the one hand,
or Seller, on the other hand, to comply with any obligation, covenant, agreement
or condition herein may be expressly waived in writing. Failure to insist upon
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.

          (e)  Availability of Equitable Remedies. Since a breach of various
provisions of this Agreement could not adequately be compensated by money
damages, Seller or Purchaser, as the case may be, may obtain, in addition to any
other remedy available to it, an injunction restraining such breach and specific
performance of such provisions of this Agreement without proof of loss or
imminent loss, and no bond or other security shall be required in connection
therewith.

          (f)  Parties in Interest. Nothing in this Agreement, whether express
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any person other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third person to any party to this
Agreement, nor shall any
<PAGE>
 
provision give any third person any right of subrogation or action over or
against any party to this Agreement.

          (g)  Binding on Successors. This Agreement shall be binding on, and
inure to the benefit of, the parties to it and their respective heirs, legal
representatives and successors.

          (h)  Full Disclosure. No representation or warranty made by any party
hereto and no certificate or document furnished or to be furnished to any party
hereto pursuant to this Agreement contains or will contain any untrue statement
of a material fact or fails to contain information necessary to make the
statements contained therein not misleading, subject to the provisions of
section 4 hereof.

          (i)  Exhibits. The exhibits referred to herein shall be attached
hereto and are a part of this Agreement as if fully set forth herein.

          (j)  Notices. All notices, requests, demands or other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been delivered five days after posting by certified United States Mail, with
postage prepaid:

     (1)  If to Purchaser:
                                    Davel Communications Group, Inc.
                                    601 West Morgan
                                    Jacksonville, IL  62650
                                    Attn: T.C. Rammelkamp, Jr.

     (2)  If to Seller:             Cottonwood Venture, L.C.
                                    3000 Kirkwood Street
                                    Burlington, IA  52601
                                    Attn: Pat Haney

          and to                    Western States Financial Group, Inc.
                                    2700 Westown Parkway
                                    Suite 220
                                    West Des Moines,  IA 50266
                                    Attn: Robert W. Seery
 
or to such other person or address as a party shall furnish to the other parties
hereto in writing.

          (k)  Governing Law. This Agreement shall be governed and construed in
accordance with the law of the State of Illinois.

          (l)  Entire Agreement. This Agreement, including the exhibits and
other documents referred to herein which form a part hereof, embodies the entire
agreement and understanding or the parties hereto in respect to the subject
matter contained herein. There are no restrictions, promises, warranties,
covenants or understandings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by the parties hereto.

          (m)  Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
<PAGE>
 
          (n)  Non-Disclosure. Seller agrees that it shall not negotiate for the
sale, trade or other transfer of any of the assets which are the subject of this
Agreement after the execution of this Agreement and prior to the earlier of
termination of the Agreement or Closing.

     18.  ESCROW PROVISIONS.

          On the date of Closing the amount determined in accordance with the
provisions of (P) 6(c) and (P) 2(b) shall be paid into escrow account number
611801616 at First Star Bank Burlington to secure payment of the items set forth
at paragraphs 3(a), 3(b), 3(c), 3(g), 3(h), 3(i), 3(l), 3(m), 3(n), 3(o), 3(q),
6(b), 6(c), 6(e), 11, 12, 14 and 15 of this Agreement. The escrow Agreement
shall provide that both parties will submit a preliminary accounting to each
other within 45 days of Closing at which time, upon written direction to the
escrow agent signed by both parties, the escrow agent shall disburse one-half of
the funds, in accordance with said written direction. The escrow Agreement shall
provide that both parties will submit a final accounting to each other within 90
days of Closing at which time, upon written direction to the escrow agent signed
by both parties, the escrow agent shall disburse the balance of escrow funds, in
accordance with said written direction. The terms of the Escrow Agreement shall
be substantially as set forth at Exhibit 18.

     19.  GUARANTY.

     In accordance with the terms of the Guaranties attached hereto at Exhibits
19(1) - 19(3), Winegard Realty Company, Western States Financial Group, Inc. and
Winegard Company being all the members or shareholders of members of Seller
hereby fully guaranty, individually and severally, the performance of this
Agreement in all of its particulars by Seller.

     In accordance with the terms of the Guarantys attached hereto at Exhibit
19(4), Davel Communications Group, Inc. being the sole shareholder of Buyer
hereby fully guaranties the performance of this Agreement in all of its
particulars by Buyer.

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

                                    PURCHASER:

                                    TELALEASING ENTERPRISES, INC., 
                                    an Illinois Corporation
 

                                    ----------------------------------------
                                    By: Theodore C. Rammelkamp, Jr.
                                    Its: Senior Vice President & General Counsel

ATTEST


-----------------------------
By: Ronnie Stucker
Its: Vice President

                                    SELLER:
                                    
                                    COTTONWOOD VENTURE, L.C. 
                                    an Iowa Limited Liability Company


                                    ----------------------------------------
                                    By Winegard Realty Company
                                    Its Managing Member
<PAGE>
 
                                           By: Randy Winegard
                                           President, Winegard Realty Company

ATTEST

------------------------------
By: Garry Cox
Its: Attorney in fact