FORM 10-Q
                     SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

                 Quarterly Report Under Section 13 or 15 (d)
                   Of the Securities Exchange Act of 1934

For the quarter ended--         Commission File Number 0-9318
  October 3, 1998

                             SHOPSMITH, INC.
                          (Name of Registrant)

Ohio__________________            			  _______31-0811466_____
(State of Incorporation)     		  (IRS Employer Identification Number)
                              	
6530 Poe Avenue
Dayton, Ohio  ___________           45414_______
(Address of Principal               (Zip Code)
Executive Offices)

Registrant's Telephone 937-898-6070



Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15 (d) of the 
Securities Exchange Act of 1934 during the preceding 12 months (or 
for such shorter period that the registrant was required to file 
such reports), and (2) has been subject to such filing 
requirements for the past 90 days.

						Yes _X_        No ___

Indicate the number of shares outstanding of each of the 
registrant's classes of common stock as of November 5, 1998.

Common shares, without par value: 2,605,233 shares.
<PAGE>
                      SHOPSMITH, INC. AND SUBSIDIARIES

                                 INDEX

                                                Page No.
Part I.  Financial information:
         Item 1.  Financial Statements		
	
   Consolidated Balance Sheets-
       October 3, 1998 and April 4, 1998                 3 - 4

					
   Statements of Consolidated Operations and 
       Retained Earnings - Three and Six Months
       Ended October 3, 1998 and October 4, 1997        	5		 	
			                                                          
   Consolidated Statements of Cash Flows
       Six Months Ended October 3, 1998  and 
              October 4, 1997                            6


   Notes to Financial Statements	 	                      7 - 8                	

          Item 2.  Management's Discussion and Analysis
          of Financial Condition and Results
          of Operations						                            9 - 10		           

Item 3.  Quantitative and qualitative disclosures 
  		     about market risk		                             10         				       

Part II.  Other Information	                             11
<PAGE>
<TABLE>
                       SHOPSMITH INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                          October 3,1998      April 4,1998
                                            (Unaudited)
                ASSETS 
<S>                                      <C>                  <C>
Current Assets:
 Cash                                     $     148,965        $    316,669 
 Restricted cash                                148,547             264,880 
 Short-term investments                       1,008,693           2,851,355 
 Accounts receivable:
  Trade, less allowance for doubtful accounts:
    $326,556 on October 3 and $317,408
    on April 4                                  799,522             518,417 
 Inventories                                  3,098,810           2,301,790 
 Deferred income taxes (Note 2)                 385,000             382,000 
 Prepaid expenses                               478,133             310,160 
           Total current assets               6,067,670           6,945,271 
Properties:
 Machinery, equipment and tooling             7,095,987           7,006,954 
 Leasehold improvements                         216,064             190,835 
            Total cost                        7,312,051           7,197,789 
 Less accumulated depreciation and
  amortization                                6,809,086           6,711,089 
             Net properties                     502,965             486,700 

Deferred income taxes (Note 2)                  634,000             629,000 

Other assets                                     15,644              15,594 

Total assets                             $    7,220,279      $    8,076,565 
</TABLE>
                                     Continued
<PAGE>
<TABLE>
                           SHOPSMITH INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                            October 3,          April 4,
                                             1998                1998
                                           (Unaudited)
<S>                                        <C>                 <C>
LIABILITIES AND SHAREHOLDERS'EQUITY
Current Liabilities:
  Accounts payable                          $   1,089,996    $   1,279,547 
  Customer advances                                23,749           39,854 
  Accrued liabilities:
  Compensation, employee benefits and
    payroll taxes                                 200,299          657,154 
  Sales taxes payable                             110,720          131,071 
  Accrued recourse liability                      341,227          275,841 
  Accrued expenses                                268,360          389,328 
  Other                                           164,214          135,343 
           Total current liabilities            2,198,565        2,908,138 

Shareholders' Equity:
  Preferred shares- without par value;
   authorized 500,000; none issued
  Common shares- without par 
   value;authorized 5,000,000; issued 
   and outstanding 2,605,233 at 
   October 3 and 2,624,375 at April 4           2,805,882        2,869,075 
 Retained earnings                              2,215,832        2,299,352 
             Total shareholders' equity         5,021,714        5,168,427 

Total Liabilities and Shareholders' Equity  $   7,220,279    $   8,076,565 
<FN> 
              See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>

                         SHOPSMITH, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>

                                     Three Months Ended    Six Months Ended
                               October 3,  October 4,  October 3,  October 4,
                                1998        1997        1998        1997
                           (Unaudited)   (Unaudited)  (Unaudited) (Unaudited)
<S>                       <C>          <C>         <C>          <C>
Net sales                  $ 3,607,126  $ 4,449,170 $  6,949,043 $  8,166,933 
Cost of products sold        1,745,194    1,964,719    3,237,101    3,558,884 
Gross margin                 1,861,932    2,484,451    3,711,942    4,608,049 

Selling expenses             1,451,401    1,413,259    2,971,141    2,976,037 
Administrative expenses        528,121      673,566      937,829    1,140,020 
  Total operating expense    1,979,522    2,086,825    3,908,970    4,116,057 

Income (loss) from operations (117,590)     397,626     (197,028)     491,992 

Interest income, net            20,091       24,210       59,367       49,210 

Other income, net                5,975        3,473        9,759       12,628 

Income (loss) before 
    income taxes               (91,524)     425,309     (127,902)     553,830 

Income tax provision           (31,758)       3,878      (44,382)       3,878 

Net income (loss)              (59,766)     421,431      (83,520)     549,952 

Non-owner changes in equity
   (Note 5)                        -            -            -            - 

Comprehensive income (loss)    (59,766)     421,431      (83,520)     549,952 

Retained earnings: 
    Beginning                2,275,598      755,634    2,299,352      627,113 
    Ending                   2,215,832    1,177,065    2,215,832    1,177,065 

Net income (loss) per 
common share (Note 3)
 Basic                     $    (0.02)  $      0.16  $     (0.03) $      0.21 
 Diluted                   $    (0.02)  $      0.15  $     (0.03) $      0.20 
<FN>
             See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>              	
                       SHOPSMITH INC. AND SUBSIDIARIES 
                    CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>

                                                   Six Months Ended
                                               October 3,       October 4,
                                                 1998             1997
                                              (Unaudited)       (Unaudited)
<S>                                           <C>              <C>
Cash flows from operating activities:
 Net income (loss)                             $    (83,520)    $    549,952 
  Adjustments to reconcile net 
   income to cash provided from operating activities:
    Depreciation and amortization                    97,997            7,095 
    Provision for doubtful accounts                  75,388           93,788 
    Deferred income taxes                            (8,000)         (20,000)
    Cash provided from (required for) changes
     in assets and liabilities:
      Restricted cash                               116,333          (55,457)
      Accounts receivable                          (291,106)        (207,975)
      Inventories                                  (797,020)        (284,542)
      Other current assets                         (167,973)        (147,045)
      Other assets                                      (50)             - 
      Accounts payable and customer advances       (205,656)        (160,083)
      Other current liabilities                    (569,304)        (331,849)
Cash provided from (used in) operating activities(1,832,911)        (456,116)

Cash flows from  investing 
activities:
 Maturity of short-term investments               1,842,662         (195,958)
 Property additions                                (114,262)        (104,842)
Cash provided from (used in) investing activities 1,728,400         (300,800)

Cash flows from financing activities:
 Common shares issued                                 4,594            1,672 
 Common shares repurchased (note 4)                 (67,787)             - 
Cash provided from (used in) financing activities   (63,193)           1,672 

Net increase (decrease) in cash                    (167,704)        (755,244)

Cash:
  At beginning of period                            316,669        1,106,873 
  At end of period                             $    148,965      $   351,629 
<FN> 
              See notes to consolidated financial statements.
</TABLE>
<PAGE>
                      SHOPSMITH, INC. AND SUBSIDIARIES 
                        NOTES TO FINANCIAL STATEMENTS

1. In the opinion of management, all adjustments (consisting of only normal
 and recurring adjustments) have been made as of October 3, 1998 and
 October 4, 1997 to present the financial statements fairly.  However, the
 results of operations for the three months and six months then ended
 are not necessarily indicative of results for the fiscal year.  The
 financial statements and notes are presented as permitted by Form 10-Q, and 
 do not contain certain information included in the annual financial
 statements.  The financial statements accompanying this report should be
 read in conjunction with the financial statements and notes thereto
 included in the Annual Report to Shareholders for the year ended
 April 4, 1998.

2. The provision for income taxes is as follows:
                                 Three Months Ended      Six Months Ended
                                 10/3/98    10/4/97     10/3/98     10/4/97
Provision (Recovery)
  at statutory rates            $(31,118)  $145,000    $(43,487)  $188,000 
Local                               (640)     3,878        (895)     3,878 
Change in valuation allowance        -     (145,000)        -     (188,000)

Net provision                   $(31,758) $   3,878  $  (44,382) $   3,878 

Provisions for Federal, state and local income taxes are calculated at
statutory rates.  In the previous year, provisions were offset by reductions
in previously established valuation reserves related to the utilization of
net operating loss carryforwards, tax credit carryforwards and other timing 
differences.

3. Basic earnings per share are computed by dividing net income by the
weighted average number of common shares outstanding during the period.
Diluted earnings per share reflect per share amounts that would have
resulted if stock options had been converted into common stock.  The
following reconciles amounts reported in the financial statements.

                                      Three Months Ended   Six Months Ended  
                                      10/3/98   10/4/97   10/3/98   10/4/97
 Net income (loss)                 $ (59,766) $ 421,431  $ (83,520) $ 549,952 

 Weighted average common shares used
 to compute basic earnings per share 2,602,970 2,664,275 2,600,661 2,664,192 
  Effect of dilutive options            16,451   107,848    26,457    97,303 
  Total shares to compute 
    diluted earnings per share       2,619,421 2,772,123 2,627,118 2,761,495 

   Basic earnings (loss) per share   $  (0.02) $    0.16  $   (0.03) $   0.21 

   Diluted earnings (loss) per share $  (0.02) $    0.15  $   (0.03) $   0.20 
<PAGE>
4. The Company repurchased 26,000 of its common shares at a cost of $67,787
during the first quarter of the fiscal year.  These transactions follow a
1997 announcement that its Board of Directors had approved a plan to
repurchase up to 200,000 Common Shares in market and other transactions from
time to time on a discretionary and indefinite basis.  A total of 62,000
shares were repurchased in the previous fiscal year.  In the second quarter 
ended October 3, 1998, 6,858 common shares were issued upon the 
exercise of certain stock options. 

5. Effective this current year, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. This Statement establishes standards for reporting and
displaying comprehensive income and its components.  Comprehensive income is
defined as net income and all other non-owner changes in equity. 
Components of comprehensive income, as it applies to the Company, would
include the write-up or write-down of securities held for sale to market 
value.  The effects of such adjustments to comprehensive income for the
quarters and six months ended October 3, 1998 and October 4, 1997 are not
material and do not affect the Company's reported results of operations or
financial position.

6. The Financial Accounting Standards Board recently issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information.
This Statement, which is effective beginning with annual financial 
statements issued for periods beginning after December 15, 1997 requires
financial and descriptive information about an entity's operating segments
to be included in the financial statements.  

7. On September 30, 1998 the Company signed an agreement to purchase its
current operating facility for $2,900,000.  The purchase agreement, expiring
November 30, 1998, is contingent upon receipt of adequate financing.
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations

Operations
Net sales declined in the second quarter of the year to $3,607,000, down 
19% from the $4,449,000 reported a year ago.  The reduction in volume, 
continuing from the first quarter, is due mostly to declines in 
demonstration and mail sales.  The Company has devoted its resources to 
strengthen these efforts.  Gross margins were off by $623,000 or 25% 
because of the reduced volume coupled with capacity level adjustments in 
the second quarter.

Total operating expenses were reduced by $107,000 or 5% in the quarter 
when compared to last year's results.  These reductions, due primarily 
to lower compensation levels, travel, promotion and incentive 
provisions, were partially offset by start up costs in new marketing 
efforts.  These efforts are focused on retailing, new products, Internet 
sales and demonstration sales of products other than the Shopsmith Mark V.

For the six months ended October 4, 1998, sales were $6,949,000 or 15% 
down from the $8,167,000 reported last year.  Gross profits declined in 
the six months to $3,712,000, down 19% from $4,608,000 for the same 
period last year because of reduced volume and capacity utilization.  As 
with the second quarter, total operating expenses declined due to 
reduced support levels, partly offset by costs of new efforts.

Provisions for Federal, state and local income taxes for the current 
year are based on anticipated annual effective tax rates. In the 
previous year, Federal income tax expense was eliminated as the expense 
was offset by reductions in valuation reserves related to deferred tax 
amounts, including tax loss and credit carryforwards pursuant to SFAS 
109.

As a result of the above factors, net losses of $60,000 and $84,000 were 
incurred in the quarter and six months ended October 3, 1998 compared to 
net income of $421,000 and $550,000 recorded for the same periods last 
year. 

Liquidity and Financial Position
Working capital was reduced by $168,000 to $3,869,000 since the first of 
the year mostly due to the year to date net loss of $84,000, 
acquisitions of common stock and purchase of properties net of 
provisions for depreciation.  The expansion of inventories and accounts 
receivable of $1,088,000 together with the liquidation of current 
liabilities by $688,000 in the six months ending October 3, 1998 were 
the main reason that operating activities consumed $1,833,000 of cash.  
Short-term investments were utilized to fund these operating cash 
requirements. Cash of $456,000 was required in the first half of last 
year mainly to increase inventory and reduce current liabilities.  Net 
income supplied $550,000 during that period.

The current ratio and debt to equity ratios were 2.76 and .44 at October 
3, 1998 compared to 2.39 and .56 at the beginning of the year.
<PAGE>
The Company's assets include $35,000 of currently recoverable income 
taxes and $1,019,000 of deferred tax assets at October 3, 1998.  
Presently, the Company believes that these assets are realizable and 
represent management's best estimate based on the weight of available 
evidence as prescribed in SFAS 109.  Management will continue to 
evaluate these assets and the need for valuation allowances based on 
near-term operating results and longer-term projections.

Note 7 to the financial statements refers to a purchase of current 
facilities subject to receipt of related financing.  This addition will 
replace an existing operating lease and will lock in a majority of 
occupancy costs at current levels.  Of the $2,900,000 purchase amount, 
the Company expects to incur debt of approximately $2,100,000.

Year 2000 Impact
The year 2000 issue is related to computer software utilizing two digits 
rather than four to define the year.  As a result, any of the Company's 
computer programs or any of the Company's suppliers that have date 
sensitive software may cause system failures or generate incorrect data.

The Company has identified information technology applications that will 
require modification to ensure year 2000 compliance.  Evaluation and 
testing of on-going programs is underway.  Replacement of certain of 
these systems has been identified and a vendor has been selected.  Non-
information technology systems are presently being evaluated.  While no 
formal contingency plan has been adopted, the Company believes that it 
has alternative measures available in the event of failures in any one 
area.

The Company is communicating with its major suppliers and financial 
institutions to assess the impact on the Company's operations should 
they fail to achieve Year 2000 compliance.  Based on responses to date, 
many of these third parties indicate programs in place without specific 
confirmation of year 2000 compliance.

Costs incurred to date for year 2000 activities have not been material 
to the Company.  Also, the Company believes that its current estimate of 
total costs of compliance will not have a material adverse impact on 
results of operations or financial condition.

Achievement of year 2000 compliance is subject to a variety of risks 
beyond the Company's control, including continued availability of 
personnel, and preparedness of third parties.  The failure of the 
Company, its customers, vendors, taxing and governmental authorities to 
achieve Year 2000 readiness could adversely affect the Company's 
operations and/or financial condition.

Forward Looking Statements
The foregoing discussion and the Company's consolidated financial 
statements contain certain forward-looking statements that involve risks 
and uncertainties, including but not limited to the following: (a) the 
adequacy of operating cash flows over the next several years together 
with currently available working capital to finance the operating needs 
of the Company and (b) successful implementation of Year 2000 compliance 
by the Company and its suppliers. 

Item 3.   Quantitative and qualitative disclosures about market risk.
               Not applicable.
<PAGE>
                                                                      
                PART II.  OTHER INFORMATION

Item 4.

The Company held its Annual Meeting of Shareholders on July 29, 
1998.  At the meeting, shareholders  (a) elected Messrs. John R. 
Folkerth, J. Michael Herr and Edward A. Nicholson as directors of 
the Company and (b) approved the appointment of Crowe, Chizek and 
Company as independent public accountants for the Company.  Votes 
were tabulated as follows:
                                                                     Broker
Issue                           For         Against    Withheld     Non votes
Election of Directors:
  John R. Folkerth          1,693,573        --        86,099       N/A
  J. Michael Herr           1,747,177        --        32,495       N/A
  Edward A. Nicholson       1,752,172        --        27,500       N/A
Appointment:
  Crowe, Chizek and Company 1,767,523      1,524       10,665       N/A

Directors continuing in office were Robert L. Folkerth, John L. Schaefer,
Brady L. Skinner and Richard L. Snell.

Item 6.
(a) Exhibits:

(10.11) Purchase agreement, dated September 30, 1998 between Angeles 
Partners XIV and the Company related to 6530 Poe Avenue, Dayton, Ohio 
property.

(27)      Financial Data Schedule for the period ended October 3, 1998.

(b)        Reports on Form 8-K
                 None
                                                                          
                             SIGNATURES

    Pursuant to the requirements of the Securities and Exchange Act of 
1934, the registrant has duly caused this report to be signed on its 
behalf by the undersigned thereunto duly authorized.

                                                                     
                                                                                
                                     SHOPSMITH, INC.
                                              

                                   
                                     By /s/ William C.Becker
                                     William C. Becker
                                     Vice President of Finance ( Principal
                                     Financial and Accounting Officer)
<PAGE>
EXHIBIT 10.11
Date: November 12, 1998

PURCHASE AGREEMENT

	THIS PURCHASE AGREEMENT (this "Agreement") is made as of 
________________, 1998 (the "date of this Agreement") by and 
between ANGELES PARTNERS XIV, a California limited 
partnership ("Seller"), whose address is One Insignia 
Financial Plaza, P.O. Box 1089, Greenville, South Carolina 
29602, and SHOPSMITH, INC., an Ohio corporation 
("Purchaser"), whose address is 6530 Poe Avenue, Dayton, Ohio 
45414.

SECTION 1.	DESCRIPTION OF PROPERTY; AGREEMENT OF PURCHASE AND SALE.

	1.1  Purchase and Sale; Property.  Seller agrees to sell 
and convey to Purchaser, and Purchaser agrees to purchase and 
pay for, upon the terms and conditions contained in this 
Agreement, the following:

		1.1.1  The parcel(s) of land located at 6530 Poe 
Avenue, Dayton, Ohio, as more fully described in Exhibit A 
(the "Land");

		1.1.2  The two story building containing approximately 
115,000 square feet and all other buildings, structures, 
landscaping and other improvements on the land (the 
"Improvements," the Land and the Improvements being 
collectively referred to as the "Premises");

		1.1.3  All fixtures, equipment, machinery, heating, 
ventilating and air conditioning equipment and systems, 
plumbing and electrical equipment and systems, furnishings, 
furniture, alarm systems, sprinkler systems and all other 
personal property that is owned by Seller and attached to, 
appurtenant to or located on or used in connection with the 
operation, management or maintenance of the Premises (all of 
the foregoing being collectively referred to as the "Personal 
Property"). 

		1.1.4  All right, title and interest of Seller in and 
to easements, rights-of-way, air rights, riparian rights, 
rights of ingress or egress, and all other rights, privileges 
and appurtenances owned by Seller and in any way related to, 
or used in connection with, the Premises and/or the Personal 
Property, including, but not limited to, the Access Easement 
and the Parking Easement (as hereinafter defined) set forth 
in Section 12 hereof.
<PAGE>
		1.1.5  All right, title and interest of Seller in and 
to any tenant leases, including the Agreement of Lease dated 
August 18, 1987, as amended by a First Amendment to Lease 
dated September 28, 1990, as further amended by a Revised 
Amendment No. 2 to Lease dated April 4, 1994, each between 
Seller and Purchaser (such lease, as amended, the "Lease"), 
security deposits, rents and profits affecting the Premises.  
Notwithstanding the foregoing, at Purchaser's option, the Lease may be
terminated rather than assigned to Purchaser at the Closing (as 
hereinafter defined).

	The term "Property," as used in this Agreement, shall mean 
all property, whether real or personal, set out in this 
Section 1.1.

SECTION 2.	PURCHASE PRICE.

	2.1  Purchase Price.  The total purchase price for the 
Property shall be Two Million Nine Hundred Thousand and 
No/100 Dollars ($2,900,000.00) (the "Purchase Price"), 
payable as follows:

		2.1.1  The sum of $1,000.00 shall be paid as an 
earnest money deposit (the "Deposit") to Chicago Title 
Insurance Company, a Missouri corporation (the "Escrow 
Agent") on or before ______________, 1998.  The Deposit shall 
be held by the Escrow Agent in accordance with the terms set 
forth in this Agreement and either (1) paid to Purchaser, 
with interest, or credited to the Purchase Price at the 
Closing;(2) paid to Seller, with interest, if this Agreement 
is terminated by Seller due to Purchaser's default pursuant 
to Section 13.1; or (3) returned to Purchaser, with interest, 
if this Agreement is terminated by Purchaser pursuant to the 
exercise of any right of termination provided to Purchaser in 
this Agreement (including, but not limited to, Seller's 
default or the failure of any condition).  This Section 2.1.1 
shall survive the termination of this Agreement.  If 
requested by the Escrow Agent, Seller, Purchaser and the 
Escrow Agent shall enter into an escrow agreement consistent 
with the terms of this Agreement containing such additional 
escrow terms as the Escrow Agent may reasonably require.

		2.1.2  The balance of the Purchase Price shall be paid 
in full at the time of Closing by certified or cashier's 
check or by wire transfer of immediately available Federal 
Reserve System funds.

	2.2  Adjustments.  The portion of the Purchase Price 
payable at the Closing shall be subject to prorations and 
adjustments as provided in this Agreement.
<PAGE>
SECTION 3.	INSPECTIONS.

	3.1  Inspection Period.  Purchaser shall have a period of 
sixty (60) days after the date of this Agreement (the 
"Inspection Period"), in which to inspect the Property for 
all purposes whatsoever, including, without limitation, the 
determination of the character, size (including quantity of 
acreage), condition (whether environmental or otherwise), 
accessibility, state of repair, zoning and suitability of the 
Property for the purpose it is being acquired.  If the 
Property is not satisfactory to Purchaser, in Purchaser's 
sole discretion, Purchaser may elect not to purchase the 
Property by sending written notice of termination to Seller 
and the Escrow Agent, postmarked not later than the last day 
of the Inspection Period.  Upon receipt of that notice, the 
Escrow Agent shall return the Deposit and any interest 
thereon to Purchaser.  In that event, this Agreement shall 
terminate and neither party shall have any further rights or 
obligations under this Agreement other than those rights 
and/or obligations that are expressly stated to survive 
expiration or termination of this Agreement.

	3.2  Entry for Inspections.  Immediately upon the execution 
of this Agreement and thereafter continuously through the 
date of the Closing, Seller shall disclose to Purchaser the 
service contractors employed or hired by Seller who have been 
engaged to operate or maintain the Property.  During that 
time, Purchaser may, at Purchaser's sole risk and expense, 
undertake a complete physical inspection of the Property as 
Purchaser deems appropriate.  Purchaser agrees to indemnify 
and save Seller harmless against all liabilities, claims, 
damages, penalties, costs and expenses (including, but not 
limited to, reasonable attorneys' fees and expenses) incurred 
by or asserted against Seller in connection with or arising 
out of the entry upon the Premises by Purchaser or 
Purchaser's employees, agents or contractors.  This 
obligation shall survive the expiration or termination of 
this Agreement.
<PAGE>
SECTION 4.  TITLE AND SURVEY.

	4.1  Title.  Promptly after the date of this Agreement, 
Purchaser shall obtain a commitment for an Owner's Policy of 
Title Insurance (the "Commitment") issued by a title agency 
selected by Purchaser (the "Title Company") and dated as of a 
current date, pursuant to which the Title Company shall 
commit to issue to Purchaser an ALTA (Form B-1970 & 1984, if 
available) Owner's Policy of title insurance, in the amount 
of the Purchase Price, insuring in Purchaser marketable fee 
simple title to the Premises, subject only to the following 
"Permitted Exceptions":

	(a)  All legal highways;

	(b)  Zoning, building and other laws, ordinances, codes and 
regulations;

	(c)  Matters disclosed by the Survey pursuant to Section 
4.2;

	(d)  Easements, rights-of-way, conditions, covenants and 
restrictions of record, to the extent that those easements, 
rights-of-way, conditions, covenants and restrictions do not 
interfere with, obstruct, or otherwise impair Purchaser's 
proposed use of the Premises; and

	(e)  Real estate taxes that are a lien upon the Premises, 
but not yet due and payable.

The Commitment shall also insure Purchaser's interests under 
the Access Easement and the Parking Easement, subject only to 
the Permitted Exceptions.

Any mortgage or other monetary liens on the Property 
("Monetary Liens") are to be discharged and paid by Seller at 
the time of Closing.  At the Closing, and as a condition to 
Purchaser's obligations under this Agreement, the Title 
Company shall deliver to Purchaser the policy of title 
insurance in accordance with the Commitment (the "Title 
Policy").  Seller shall provide an affidavit and such other 
instruments and assurances as may be required by the Title 
Company to delete the "standard" or "general" exceptions from 
the Title Policy.

	4.2  Survey.  Promptly after the date of this Agreement, 
Purchaser shall obtain an as-built survey and metes and 
bounds description of the Premises, the Access Easement and 
the Parking Easement prepared by a registered land surveyor 
or engineer, duly licensed in the State of Ohio, showing the 
acreage of the Premises, the Access Easement and the Parking 
Easement to the nearest 1/1,000th of an acre, and containing 
the certifications and the minimum standard detail 
requirements for land surveys most recently adopted by the 
ALTA/ACSM and the specifications set forth as item numbers 1 
through 4 and 6 through 11 of ALTA/ACSM's Table A (the 
"Survey").  
<PAGE>
	4.3  Defects and Cure.  Purchaser shall notify Seller of 
Purchaser's disapproval of any matter contained in the 
Commitment or the Survey on or before the later of (a) the 
last day of the Inspection Period or (b) 15 days after 
Purchaser's receipt of both the Commitment and the Survey and 
copies of the documents referred to in the Commitment as 
exceptions or exclusions from coverage.  Except for real 
estate taxes that are to be prorated at Closing, Monetary 
Liens and the 30 Foot Ingress/Egress Easement (as defined in 
Section 12.3), Purchaser's failure to notify Seller of 
disapproval of any matter within the foregoing time period 
shall be deemed approval of that matter.  If the Survey 
discloses conditions that are not in conformity with the 
criteria set forth above or that might otherwise adversely 
affect Purchaser's proposed use of the Premises, or if the 
Commitment discloses matters other than the Permitted 
Exceptions and Monetary Liens (collectively, "Defects"), 
those Defects shall, as a condition to Purchaser's 
obligations under this Agreement, be cured or removed at or 
before the Closing.  If Seller fails to cure and remove all 
Defects within the period allowed for cure, this Agreement 
may be terminated, at Purchaser's election, by written 
notice.  Purchaser may, at its sole election, proceed to 
close this transaction notwithstanding any Defects, in which 
event the Defects shall be deemed additional Permitted 
Exceptions.  If Purchaser elects to terminate this Agreement, 
the Deposit and any interest thereon shall be refunded to 
Purchaser, and neither party shall have any further rights 
and/or obligations that are expressly stated to survive 
expiration or termination of this Agreement.

SECTION 5.	CONDITIONS TO CLOSING.

	5.1  Purchaser's Conditions.  The obligation of Purchaser 
to close the transaction contemplated by this Agreement is 
subject to the following conditions, which, together with any 
other conditions set forth in this Agreement, are for 
Purchaser's benefit and which may be waived by Purchaser at 
its sole option: 

		5.1.1  The representations and warranties of Seller 
contained in Section 6 of this Agreement shall be true on the 
date of Closing in all material respects as though those 
representations and warranties were made on that date.

		5.1.2  Seller shall not have breached any material 
affirmative covenant contained in this Agreement to be 
performed by Seller on or before the date of Closing.
<PAGE>
		5.1.3  The conditions set forth in Sections 3 and 4 
shall have been satisfied; and, in the event Purchaser has 
delivered a notice of Defects pursuant to Section 4, Seller 
has remedied the Defects in the manner and within the time 
period provided in this Agreement, or Purchaser has waived 
same in writing.

		5.1.4  Seller shall have timely delivered to Purchaser 
in satisfactory form the documents and all other items 
referred to in Section 7 below.

		5.1.5  At Closing, the Title Company shall have 
delivered or irrevocably committed itself in writing to 
deliver the Title Policy described in Section 4.1.

		5.1.6  Purchaser shall have obtained financing for the 
acquisition of the Property from a lender, whether, public or 
institutional (including, without limitation, low cost 
financing from the State of Ohio), in an amount and upon such 
terms and conditions as shall be satisfactory to Purchaser, 
in Purchaser's sole discretion.

		5.1.7  Purchaser shall have obtained all building, 
zoning and environmental permits and approvals necessary for 
Purchaser's continued use of the Premises as presently 
operated (including a conditional use permit relating to 
Purchaser's retail activities on the Premises) and for any 
modification of or repairs to the Premises for Purchaser's 
intended use.  Seller shall cooperate with Purchaser in its 
efforts to obtain such permit, including executing the 
applications to be submitted therefor.

		5.1.8  Seller shall have completed patching and 
repairing of the asphalt covered area of the Premises, 
together with restriping the same, no later than the Closing.  
Seller shall present to Purchaser a plan acceptable to 
Purchaser for the completion of the foregoing no later than 
ten (10) days after the date of this Agreement.  If such work 
shall not be completed and fully paid for by the date of the 
Closing, Purchaser, at its option and in lieu of exercising 
its right to terminate this Agreement, may elect to have an 
amount equal to the cost of completing such work, as 
determined by Purchaser, withheld from the Purchase Price and 
deposited with the Escrow Agent to be applied to the cost of 
completing such work in accordance with the plan acceptable 
to Purchaser.  
<PAGE>
		5.1.9  The Access Easement, the Parking Easement and 
the related subordination agreements described in Section 12 
of this Agreement shall have been obtained.  

	If any of these conditions is not satisfied or waived, 
Purchaser shall have the right to terminate this Agreement by 
notice to Seller no later than the date of Closing or such 
earlier time as may be provided above.  In the event that the 
applications for the conditional use permit referred to in 
Section 5.1.7 of this Agreement shall be pending as of the 
date of Closing, Purchaser shall have the right to extend the 
period for satisfaction of such conditions for a period of up 
to sixty (60) days.  In the event of termination of this 
Agreement, the Escrow Agent shall immediately refund the 
Deposit and all accrued interest thereon to Purchaser, this 
Agreement shall terminate, and neither party shall have any 
further rights or obligations under this Agreement other than 
those rights and/or obligations which are expressly stated to 
survive expiration or termination of this Agreement.

SECTION 6.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.

	6.1  Seller's Representations, Warranties and Covenants.  
Seller represents, warrants and covenants to Purchaser as to 
the following matters, and shall be deemed to remake all of 
the following representations, warranties and covenants as of 
the date of Closing.

		6.1.1   The execution and delivery of this Agreement 
by Seller, the execution and delivery of every other document 
and instrument delivered pursuant to this Agreement by or on 
behalf of Seller, and the consummation of the transactions 
contemplated by this Agreement, have been duly authorized and 
validly executed and delivered by Seller, and, to Seller's 
best knowledge, will not (a) constitute or result in the 
breach of or default under any oral or written agreement to 
which Seller is a party or which affect the Property; (b) 
constitute or result in a violation of any order, decree or 
injunction with respect to which Seller and/or the Property 
is bound; (c) cause or entitle any party to have a right to 
accelerate or declare a default under any oral or written 
agreement to which Seller is a party or which affects the 
Property; and/or (d) violate any provision of any municipal, 
state or federal law, statutory or otherwise, to which Seller 
or the Property may be subject.
<PAGE>
		6.1.2   To Seller's best knowledge, the Property 
is in compliance with all applicable federal, state and 
local statutes, laws, ordinances, orders, requirements, 
rules and regulations (including, but not limited to, 
building, zoning and environmental laws and the 
Americans With Disabilities Act).

		6.1.3    To Seller's best knowledge, all 
required building permits, occupancy permits or other 
required approvals or consents of governmental 
authorities or public or private utilities having 
jurisdiction have been obtained with respect to the 
Property.

		6.1.4   To Seller's best knowledge, Seller has 
received no written notice of violation of any 
applicable federal, state or local statute, law, 
ordinance, order, requirement, rule or regulation, or 
of any covenant, condition, restriction or easement 
affecting the Property. 

		6.1.5   To Seller's best knowledge, the Property 
is in compliance with all covenants, conditions, 
restrictions, easements and similar matters affecting 
the Property. 

		6.1.6   With respect to environmental matters:

		(i)   To Seller's best knowledge, no toxic, 
hazardous, explosive or otherwise dangerous materials, 
substances, pollutants or wastes, as those terms are 
used in the Clean Air Act, the Clean Water Act, 
Resource Conservation and Recovery Act of 1976, the 
Hazardous Materials Transportation Act, the 
Comprehensive Environmental Response, Compensation and 
Liability Act of 1980 ("CERCLA"), the Emergency 
Planning and Community Right-to-Know Act or in any 
other federal, state or local law environmental law 
(collectively "Environmental Laws"), petroleum 
products, polychlorinated biphenyls, or radioactive 
materials (all of the above being collectively referred 
to herein as "Hazardous Materials") have been or are 
stored, treated, disposed of, managed, generated, 
manufactured, produced, released, emitted or discharged 
on, in or under the Property, other than such of the 
foregoing as are used by Purchaser in connection with 
its operations on the Premises.
<PAGE>
		(ii)   To Seller's best knowledge, Seller is in 
compliance with all Environmental Laws and has obtained 
all environmental licenses, permits, approvals, 
registrations and authorizations (federal, state and 
local) material to the Premises (other than such of the 
foregoing as are required to be obtained by Purchaser 
in connection with the operation of its business on the 
Premises).  All such licenses, permits, approvals, 
registrations and authorizations remain in full force 
and effect as of the Closing and may be effectively 
transferred or assigned to Purchaser on or after the 
Closing.

		(iii) To Seller's best knowledge, no 
governmental or private action, suit or proceeding to 
enforce or impose liability under any Environmental 
Laws has been instigated or, to the knowledge of 
Seller, threatened against Seller and no lien has been 
created under the Environmental Laws.

		(iv)  To Seller's best knowledge, none of the 
Premises consists of "wetlands" under applicable 
federal or state law.

		(v)   To Seller's best knowledge, there are no 
underground storage tanks on the Premises (other than 
three(3) underground fuel oil storage tanks) and no 
underground storage tanks have been removed from the 
Premises. 

		6.1.7   To Seller's best knowledge, there are no 
encroachments onto the Land of any improvement on any 
adjoining property, and there are no encroachments onto 
any adjoining property of any improvements on the Land, 
other than as shown on the Survey of the Premises 
prepared by Shaw Weiss & DeNaples, dated September 22, 
1997, updated January 8, 1998, if any.

		6.1.8   To Seller's best knowledge, there is no 
pending or threatened litigation, arbitration, 
administrative action or examination, claim, or demand 
whatsoever relating to the Property.  No attachments, 
execution proceedings, liens, assignments or insolvency 
proceedings are pending or, to Seller's best knowledge, 
threatened against Seller or the Property, nor are any 
of the foregoing contemplated by Seller.  Seller is not 
contemplating the institution of insolvency 
proceedings.
<PAGE>
		6.1.9   Except for a possible taking of a small 
portion of the front of the Land not to exceed 20 feet 
in width in connection with the addition of an 
interchange at Wyse Road located to the south of the 
Premises, Seller has no knowledge of any pending or 
contemplated eminent domain, condemnation, or other 
governmental or quasi-governmental taking of any part 
or all of the Property.

		6.1.10  To Seller's best knowledge, there are no 
public improvements that have been ordered to be made 
and/or that have not been previously assessed, and 
there are no special, general or other assessments 
pending, threatened against, or affecting the Property.

		6.1.11  To Seller's best knowledge, there are no 
leases, management contracts, service contracts or 
other agreements, either oral or written, pertaining to 
the Property that will survive the Closing or to which 
Purchaser or the Property will be bound except those to 
which Purchaser is already a party thereto.

		6.1.12  Seller has paid or will pay in full all 
bills and invoices for labor and material of any kind 
arising from the ownership, operation, management, 
repair, maintenance or leasing of the Property 
(including, without limitation, all bills and invoices 
relating to the work to be performed by Seller pursuant 
to Section 5.1.8), and there are no actual or potential 
claims for mechanic's liens, brokerage commissions or 
other claims outstanding or available to any party in 
connection with the ownership, operation, management, 
repair, maintenance or leasing of the Property.

		6.1.13  Between the date of this Agreement and 
the date of Closing, Seller will keep the Property 
insured in accordance with its obligations under 
Article IX of the Lease.

		6.1.14  Between the date of this Agreement and 
the date of Closing, no part of the Property will be 
sold, encumbered or transferred in favor of or to any 
party whatsoever except for the Easements.  There are 
no purchase contracts, options or any other agreements 
of any kind, oral or written, by which any person or 
entity other than Seller will have acquired or will 
have any basis to assert any right, title or interest 
in, or right to possession, use, enjoyment or proceeds 
of, any part or all of the Property, except for the 
Access Easement, if and to the extent such easement 
shall encumber the Premises.
<PAGE>
		6.1.15  Seller is not a foreign person within 
the meaning of Section 1445 of the Internal Revenue 
Code of 1990, as amended.

		6.1.16  To Seller's best knowledge, the 
continued compliance with all legal requirements 
relating to the Property is not dependent upon 
facilities located at any other property; and the 
compliance by any other property with any legal 
requirements applicable to the other property is not 
dependent upon the Property.

		6.1.17   The Premises are assessed separately 
from all other adjacent property for purposes of real 
property taxes.

		6.1.18  Adequate supplies of all public 
utilities, including, but not limited to, water, 
sanitary sewer, gas, electricity, telephone, storm 
sewer and drainage facilities and other utilities 
required by law or by the normal use and operation of 
the Premises (a) are installed to the property lines of 
the Premises, (b) are connected pursuant to valid 
permits, (c) are adequate to service the Premises, (d) 
are adequate to permit full compliance with all 
requirements of law and normal usage of the Premises by 
the  occupants and their licensees and invitees, and 
(e) either enter the Premises through adjoining public 
streets, or if they pass through adjoining private 
land, do so in accordance with valid public easements 
or private easements that inure to the benefit of 
Seller and its successors in title to the Premises.

		6.1.19  To Seller's best knowledge, Seller has 
not received and has no actual knowledge of any notice 
or request, formal or informal, from any insurance 
company or board of fire underwriters (a) identifying 
any defects in the Property that would adversely affect 
the insurability of the Property  or (b) requesting the 
performance of any work or alteration with respect to 
the Property.

		6.1.20  To Seller's best knowledge, no fact or 
condition exists that would result in the termination 
or impairment of access to the Premises from adjoining 
public or private streets or ways or that could result 
in discontinuation of necessary sewer, water, electric, 
gas, telephone or other utilities or services.  All 
sewage, sanitation, plumbing, water retention, refuse 
disposal, and similar facilities servicing the Premises 
are in full compliance with governmental and 
environmental protection authorities' laws, rules and 
regulations.
<PAGE>
		6.1.21  To Seller's best knowledge, the 
Improvements are structurally sound, and the roof, 
plumbing systems, heating systems, ventilating and air-
conditioning systems and electrical systems are 
operable, and, with regular maintenance, repair or 
replacement, as may be required because of 
deterioration from use or age, are adequate to serve 
the needs of the Improvements.

	6.2	Survival.  All of the representations, 
warranties and covenants made by Seller in Section 6.1 
and elsewhere in this Agreement shall survive Closing 
for a period of one (1) year. 

SECTION 7.	CLOSING AND TRANSFER OF TITLE.

	7.1  Closing.  The parties agree to close this 
purchase and sale (the "Closing") no later than thirty 
(30) days after the last day of the Inspection Period, 
at 10:00 a.m., in the offices of the Title Company, or 
such earlier date to which Seller and Purchaser may 
agree.

	7.2  Seller's Documents; Other Deliveries.  At 
Closing, Seller shall execute and/or deliver to 
Purchaser the following.

		7.2.1   A limited warranty deed to the Premises 
conveying marketable, fee simple title to the Premises 
to Purchaser free, clear, and unencumbered, subject, 
however, to the Permitted Exceptions.  The conveyance 
made by the limited warranty covenants contained in 
such deed shall include the items set forth in 
paragraphs A through D of the Deed from Mid-States 
Development Company, an Ohio general partnership, to 
Seller dated December 1, 1985 and recorded at 
Microfiche No. 85-0701D11 of the Montgomery County, 
Ohio Deed Records.
<PAGE>
		7.2.2   A Bill of Sale with full warranties of 
title, conveying the Personal Property to Purchaser.

		7.2.3   An assignment of any warranties, 
guarantees, licenses and permits with respect to the 
Property.

		7.2.4   All other documents and instruments 
referred to in Section 5.

		7.2.5   All of the Personal Property.

		7.2.6   All blueprints, construction plans, 
specifications and plats in Seller's possession for all 
of the Improvements and Personal Property.

		7.2.7   An owner's affidavit as to mechanics' 
liens, persons in possession of the Premises, 
unrecorded agreements, and such other matters required 
by the Title Company as a condition to its deletion of 
the standard exceptions relating to such matters from 
the Title Policy.

		7.2.8   An owner's affidavit, in form and 
substance satisfactory to Purchaser, signed under 
penalty of perjury and containing Seller's U.S. 
taxpayer identification number, to the effect that 
Seller is not a foreign person within the meaning of 
Section 1445(f) of the Internal Revenue Code.

		7.2.9   A certificate in affidavit form, 
satisfactory to Purchaser, executed by an officer of 
Seller, and dated as of the date of Closing, which 
provides that all Seller's representations, warranties 
and covenants set forth in this Agreement are, as of 
the date of Closing, true and correct with the same 
force and effect as if each warranty, representation 
and covenant were made again at Closing.

		7.2.10  All consents that may be required from 
any third person or entity in connection with the sale 
of the Property.

		7.2.11  Certified copies of the resolutions of 
Seller or Seller's partners' board of directors (if 
Seller or any of its partners are a corporation) or its 
partners (if Seller or any of its partners are a 
partnership) evidencing authorization of the officer(s) 
or partner(s) acting for Seller and/or Seller's 
partners and authorization and approval of this 
Agreement and the transactions contemplated by this 
Agreement, in form and substance satisfactory to 
Purchaser's counsel and the Title Company.
<PAGE>
		7.2.12  A fully executed Access Easement and 
Parking Easement, together with related subordination 
agreements in accordance with Section 12 hereof.

		7.2.13  An assignment to Purchaser of Seller's
right, title and interest under the Lease, or, at 
Purchaser's option, a termination of the Lease. 

		7.2.14  A termination of the Stock Option 
Agreement pursuant to Section 19 hereof.
 
		7.2.15  Such other documents or instruments as 
may be reasonably required by Purchaser, required by 
other provisions of this Agreement, or reasonably 
necessary to effectuate Closing, including, but not 
limited to, a closing statement.  All of the documents 
and instruments to be delivered by Seller shall be in 
the form and substance reasonably satisfactory to 
counsel for Purchaser.
	7.3	Purchaser's Documents.  At Closing, Purchaser 
shall execute and/or deliver to Seller the following 
documents:

		7.3.1   A certified copy of the resolution of 
Purchaser's board of directors evidencing authorization 
of the officer(s) acting for Purchaser and 
authorization and approval of this Agreement and the 
transactions contemplated by this Agreement.

		7.3.2   A termination of the Stock Option 
Agreement pursuant to Section 19 hereof.

		7.3.3   Such other documents and instruments as 
Seller or the Title Company shall reasonably request in 
order to consummate this transaction, or reasonably 
necessary to effectuate Closing, including, but not 
limited to, a closing statement.

SECTION 8.  POSSESSION.

	Purchaser is in possession of the Property and will 
continue to be at Closing.  Between the date of this 
Agreement and Closing, Seller shall continue to operate 
the Property in accordance with its present standards 
and shall maintain the Property in its present 
condition and repair, ordinary wear and tear expected, 
in accordance with the Lease.
<PAGE>
SECTION 9.  PRORATIONS AND EXPENSES.

	9.1  Proration of Real Estate Taxes. Pursuant to 
Section 3 of the Lease, Purchaser is responsible for 
payment of real estate taxes over and above the real 
estate taxes paid by Seller during the first year of 
the term of the Lease.  The real estate taxes which are 
a lien for the year in which the Closing occurs shall 
be prorated as of the date of the Closing in accordance 
with the customary method of tax proration in 
Montgomery County, Ohio; provided that only that 
portion of such taxes as Seller is obligated to pay 
pursuant to the terms of Section 3 of the Lease shall 
be the subject of such proration.

	9.2  Utility Expenses; Miscellaneous Expenses.  
Purchaser shall continue to be responsible for all 
charges for consumption of utilities as provided in the 
Lease.  The parties will prorate, as of the date of 
Closing, any miscellaneous income (including rent under 
the Lease) and expenses related to the Property.

	9.3  Estimates.  All items that are not subject to an 
exact determination shall be estimated by the parties.  
When any item so estimated is capable of exact 
determination after Closing, the party in possession of 
the facts necessary to make the determination and the 
parties shall adjust the prior estimate within 10 days 
after both parties have received the reports.  Either 
party will be entitled, at its own expense, to audit 
the records supporting the determination made.  All 
prorations shall be made as of 11:59 p.m. on the day 
prior to the date of Closing.
<PAGE>
SECTION 10.  CONDEMNATION OR CASUALTY.

	10.1  Condemnation.  If between the date of this 
Agreement and the date of Closing all or any portion of 
the Property is taken or is made subject to 
condemnation, eminent domain or other governmental or 
quasi-governmental acquisition proceedings, then the 
following provisions shall apply.  In the event Seller 
receives a written notice from any governmental or 
quasi-governmental authority with powers of eminent 
domain to the effect that a condemnation as to any 
portion or all of the Property is pending or 
contemplated, Seller shall notify Purchaser promptly 
after receipt of the notice.  If the proposed or 
pending condemnation is one that could reasonably be 
expected to render any portion of the Premises 
untenantable, then Purchaser may, upon receipt of 
notice of the event, cancel this Agreement at any time 
prior to Closing, in which event the Deposit and any 
interest thereon shall be returned to Purchaser, this 
Agreement shall terminate, and neither party shall have 
any further rights or obligations under this Agreement 
other than those rights and/or obligations which are 
expressly stated to survive expiration or termination 
of this Agreement.  In the event that Purchaser shall 
not elect to terminate, then this Agreement shall 
remain in full force and effect, and Seller shall be 
entitled to all monies received or collected prior to 
the Closing by reason of the condemnation, except to 
the extent Purchaser shall be entitled to such proceeds 
pursuant to Article XI of the Lease.  In that event, 
this transaction shall close in accordance with the 
terms and conditions of this Agreement except that 
there will be an abatement of the Purchase Price equal 
to the amount of the gross proceeds received by Seller.  
If, however, Seller has not received any proceeds by 
reason of such condemnation prior to the Closing and 
Purchaser does not elect to terminate Purchaser's 
obligations under this Agreement, then the Closing 
shall take place without abatement of the Purchase 
Price, and Seller shall assign and transfer to 
Purchaser at Closing by written instrument all of 
Seller's right, title and interest in any condemnation 
awards.
<PAGE>
	10.2  Casualty.  In the event of substantial loss or 
damage to the Property prior to the Closing by fire or 
other casualty, Purchaser may, at any time after 
receipt of notice or knowledge of that event, cancel 
this Agreement, in which event the Deposit and any 
interest thereon shall be immediately refunded, this 
Agreement shall terminate and neither party shall have 
any further rights or obligations under this Agreement 
other than those rights and/or obligations which are 
expressly stated to survive expiration or termination 
of this Agreement.  In the event that Purchaser shall 
not elect to terminate, or if the loss or damage is not 
"substantial," then this Agreement shall remain in full 
force and effect and Purchaser shall proceed to close 
and take the Property as damaged, in which event 
Purchaser shall be entitled to receive the insurance 
proceeds plus the amount of any deductible, co-
insurance or self-insurance carried by Seller, so that 
Purchaser shall receive, in effect, the full 
replacement cost of the loss or damage, as the cost is 
determined in the settlement with the insurer.  Seller 
and Purchaser shall each be entitled to participate in 
the settlement.  As used in this Section 10.2, the term 
"substantial loss or damage"  means any loss or damage 
resulting to the Property which the parties reasonably 
estimate will require more than 30 days to repair or 
restore.

SECTION 11. [Intentionally omitted]


SECTION 12.  EASEMENTS FOR ACCESS AND PARKING
<PAGE>
	12.1  Access Easement. There currently exists a 
driveway to the north of the Premises running easterly 
off of Poe Avenue and providing access from Poe Avenue 
to the Premises and being 100 feet in width (the 
Driveway).  The Driveway is located partially on the 
Premises and partially on the property to the north of 
the Premises (the Adjacent Property).  Purchaser's 
obligations under this Agreement shall be conditioned 
upon the execution and delivery of an Easement 
Agreement with respect to the joint use of the Driveway 
by Purchaser and the owner of the Adjacent Property 
(the "Adjacent Owner") in the form of Exhibit B hereto, 
with such changes thereto as shall be acceptable to 
Purchaser in its sole and absolute discretion (such 
easement, the "Access Easement").  Seller shall use its 
best efforts to obtain the Adjacent Owner's agreement 
to execute and deliver the Access Easement at Closing.  
No changes shall be made to the form of the agreement 
attached as Exhibit B hereto without Purchaser's prior 
written consent.  Seller shall also use its best 
efforts to obtain subordination agreements from the 
holders of any mortgages or leases affecting the 
Adjacent Property.  The forms of such subordination 
agreements are attached to this Agreement as Exhibits 
C-1 and C-2 and shall not be changed without 
Purchaser's prior written consent.  If Seller is unable 
to obtain the Access Easement or subordination 
agreements and if Seller has used its best efforts to 
do so, Purchaser's sole remedy shall be to terminate 
this Agreement.

	12.2  Parking Easement.  Purchaser's obligations under 
this Agreement shall be conditioned upon the execution 
and delivery of an Easement Agreement for parking 
purposes between Purchaser and the owner of the 
property located to the east of the Premises (the "East 
Adjacent Owner") in the form of Exhibit C hereto, with 
such changes thereto as shall be acceptable to 
Purchaser in its sole and absolute discretion (such 
easement, the "Parking Easement").  Seller shall use 
its best efforts to obtain the East Adjacent Owner's 
agreement to execute and deliver the Parking Easement 
at Closing.  No changes shall be made to the form of 
the agreement attached as Exhibit C hereto without 
Purchaser's prior written consent.  Seller shall also 
use its best efforts to obtain subordination agreements 
from the holders of any mortgages or leases affecting 
the property to the east of the Premises which will be 
encumbered by the Parking Easement.  The forms of such 
subordination agreements are attached to this Agreement 
as Exhibits C-1 and C-2 and shall not be changed 
without Purchaser's prior written consent.  If Seller 
is unable to obtain the Parking Easement or 
subordination agreements and if Seller has used its 
best efforts to do so, Purchaser's sole remedy shall be 
to terminate this Agreement.
<PAGE>
	As an alternative to the execution and delivery of the 
Parking Easement at closing, Seller may cause the East 
Adjacent Owner to convey the Easement Parcel (as 
defined in the Parking Easement) to Purchaser and take 
such other actions in connection therewith including 
the release of any mortgages and leases affecting the 
Easement Parcel, all in accordance with paragraph 4 of 
the Parking Easement.  If Seller is unable to cause the 
East Adjacent Owner to so convey the Easement Parcel to 
Purchaser by Closing, Purchaser's sole remedy shall be 
to terminate this Agreement.

	12.3  30-Foot Ingress/Egress Easement.  Purchaser's 
obligations under this Agreement shall be conditioned 
upon the termination, release and abandonment of that 
certain 30-foot ingress and egress easement set forth 
in a deed dated August 23, 1978 and recorded at 
Microfiche No. 78-471A03, Montgomery County, Ohio Deed 
Records (the "30 Foot Easement"), which easement 
benefits the Premises and other real property.  Seller 
shall use its best efforts to obtain an instrument 
signed by all parties benefitted by such 30 Foot 
Easement (including any lessees and mortgagees) 
terminating, releasing and abandoning the same.  If 
Seller is unable to obtain such an instrument and if 
Seller has used its best efforts to do so, Purchaser's 
sole remedy shall be to terminate this Agreement.

SECTION 13.  DEFAULT.

	13.1  Purchaser's Default.  In the event that Seller 
is ready, willing and able to convey the Property in 
accordance with this Agreement, and Purchaser is 
obligated under the terms of this Agreement to 
consummate the transaction evidenced by this Agreement 
but fails to consummate this Agreement and take title, 
the parties recognize and agree that the damages Seller 
will sustain will be substantial, but difficult if not 
impossible to ascertain.  Therefore, the parties agree 
that, in the event of Purchaser's default, Seller shall 
be entitled to receive and retain the Deposit and any 
interest thereon as liquidated damages for Purchaser's 
failure to close.  Seller's right to receive and retain 
the Deposit and any interest thereon shall constitute 
the waiver by Seller of all other rights and remedies 
against Purchaser except for those rights and/or 
obligations that are expressly stated to survive the 
termination of this Agreement.
<PAGE>
	13.2  Seller's Default.  If Closing is not concluded 
through no fault of Purchaser, Purchaser, at its 
option, may (a) elect to enforce the terms of this 
Agreement by action for specific performance, and/or 
exercise any other right or remedy available to it at 
law or in equity or (b) terminate this Agreement by 
notice to Seller.  In either of the foregoing events, 
Purchaser shall be entitled to an immediate refund of 
the Deposit and any interest thereon after notice to 
Seller and to the Escrow Agent.  In the event of a 
successful specific performance action by Purchaser, 
the full Purchase Price shall be paid to Seller at the 
time of Closing.  Upon any termination under (b) above, 
the parties shall have no further rights and 
obligations under this Agreement other than those 
rights and/or obligations that are expressly stated to 
survive expiration or termination of this Agreement.

	Copies of all notices with regard to any termination 
and/or request for the delivery of the Deposit in 
connection with a failure to close pursuant to this 
Section 13 shall be sent to the Escrow Agent and the 
Escrow Agent shall act in accordance with this 
Agreement (or, if applicable, any separate Escrow 
Agreement).

SECTION 14.  BROKER.

	Each party represents and warrants to the other that 
it has dealt with no agent or broker who has in any way 
participated in the sale of the Property, except that 
Seller represents that it has dealt with Miller-
Valentine Realty, Inc., an Ohio corporation ("MV 
Realty").  Seller agrees to pay the brokerage 
commission due to MV Realty.  Any other fees or 
commissions that may be claimed shall be the sole 
responsibility of the party breaching the preceding 
warranty.  Each party agrees to indemnify and hold the 
other harmless against any and all claims, judgments, 
costs of suit, attorneys' fees and other reasonable 
expenses that the other may incur by reason of any 
action or claim made against the other by any agent, 
advisor or intermediary appointed by or instructed by 
Seller or Purchaser, as the case may be, arising out of 
this Agreement or the sale of the Property to 
Purchaser.

SECTION 15.  ASSIGNMENT.

	This Agreement shall be binding upon and shall inure 
to the benefit of the parties and their respective 
heirs, personal representatives, successors and 
assigns.
<PAGE>
SECTION 16.  NOTICES.

	All notices permitted or required under this Agreement 
shall be in writing, and shall be deemed properly 
delivered when deposited in the United States mail, 
postage prepaid, certified or registered mail, return 
receipt requested, addressed to the parties at their 
respective addresses set forth below or as they may 
otherwise specify by written notice delivered in 
accordance with this Section:

	As to Purchaser:	Shopsmith, Inc.
					6530 Poe Avenue
					Dayton, Ohio 45414
					Attention: John R. Folkerth

	As to Seller:		Angeles Partners XIV
					One Insignia Financial Plaza
					P.O. Box 1089
					Greeneville, South Carolina 29602
					Attention: Ken Cobler
SECTION 17.  EXPENSES.

	Seller shall pay for any transfer tax, conveyance fee 
or similar charge in connection with the sale of the 
Premises.  All costs of the Survey and Legal 
Descriptions to be prepared in accordance with Section 
4.2 and all costs incurred in connection with the 
release of the 30-Foot Easement pursuant to Section 
12.3 shall be paid by MV Realty pursuant to a separate 
agreement between Purchaser and MV Realty executed 
simultaneously with this Agreement.  Purchaser shall 
pay all costs, fees and premiums of the Commitment and 
the Title Policy and the recording charges for the deed 
and any mortgage Purchaser may place upon the Premises.  
Any other miscellaneous closing expenses properly 
allocable to both parties (including, but not limited 
to, escrow fees) shall be divided equally between 
Purchaser and Seller.  Each party shall pay for its own 
legal and accounting fees and incidental expenses.
<PAGE>
SECTION 18.  COOPERATION.

	From time to time at the request of Purchaser, and 
without further consideration, Seller shall execute and 
deliver, and/or join with Purchaser in executing and 
delivering, such applications for licenses, variances, 
zoning changes, approvals, permits and consents from 
governmental bodies, utility companies, financial 
institutions and other entities and shall supply such 
information, arrange such meetings, and execute such 
forms and take such action as Purchaser may reasonably 
request in order to proceed with and fully implement 
Purchaser's use of the Property or to effectuate the 
transactions contemplated by this Agreement; provided, 
however, that Seller shall not be required to incur any 
expenses in connection with these matters, nor shall 
any permanent changes be made to the status of the 
Premises (zoning or otherwise) prior to the Closing 
without Seller's consent (which shall not be 
unreasonably withheld).  Seller shall not file an 
objection to or oppose Purchaser's intended use of the 
Property.

SECTION 19.  STOCK OPTION AGREEMENT.

	Pursuant to a certain Stock Option Agreement dated as 
of March 29, 1994 between Purchaser and Seller (the 
"Stock Option Agreement"), Purchaser granted to Seller 
an option to purchase Common Shares of Purchaser on and 
subject to the terms and conditions set forth in the 
Stock Option Agreement.  Seller agrees that the Stock 
Option Agreement and all of Seller's rights and 
interests thereunder shall terminate effective as of 
the date of the Closing, without payment of any sum 
whatsoever.  At the Closing, Seller and Purchaser shall 
enter into an agreement evidencing such termination.

SECTION 20.  MISCELLANEOUS.

	20.1  Gender.  Words of any gender used in this 
Agreement shall be held and construed to include any 
other gender, any words in the singular number shall be 
held to include the plural, and vice versa, unless the 
context requires otherwise.

	20.2  Attorneys' Fees.  If either party commences an 
action against the other to enforce any of the terms of 
this Agreement or because of the breach by either party 
of any of the terms of this Agreement, the losing or 
defaulting party shall pay to the prevailing party its 
reasonable attorneys' fees, costs and expenses incurred 
in connection with the prosecution or defense of such 
action.  The term "prevailing party" means the party 
obtaining substantially the relief sought, whether by 
compromise, settlement or judgment.
<PAGE>
	20.3  Captions.  The captions in this Agreement are 
inserted only for the purpose of convenient reference 
and in no way define, limit, or prescribe the scope or 
intent of this Agreement or any part of this Agreement.

	20.4  Construction.  No provisions of this Agreement 
shall be construed by any court or other judicial 
authority against any part by reason of that party's 
being deemed to have drafter or structured the 
provisions.

	20.5  Entire Agreement.  This Agreement constitutes 
the entire contract between the parties and supersedes 
all prior understandings, if any, there being no other 
oral or written promises, conditions, representations, 
understandings or terms of any kind as conditions or 
inducements to the execution of this Agreement and none 
have been relied upon by either party.  Any subsequent 
conditions, representations, warranties or agreements 
shall not be valid and binding upon the parties unless 
in writing and signed by both parties.

	20.6  Recording.  The parties agree that this 
Agreement shall not be recorded.

	20.7  Time of Essence.  TIME IS OF THE ESSENCE UNDER 
THIS AGREEMENT.

	20.8  Original Document.  This Agreement shall be 
executed by the parties in counterparts, each of which 
shall be deemed an original, but all of such 
counterparts taken together shall constitute one and 
the same Agreement.  The phrase "date of this 
Agreement" and similar phrases as used herein shall 
mean the date on which the last of Seller or Purchaser 
shall sign this Agreement as indicated below.

	20.9  Governing Law.  This Agreement shall be 
construed, and the rights and obligations of Seller and 
Purchaser shall be determined, in accordance with the 
laws of the State of Ohio.
<PAGE>


	WITNESS the execution hereof as of the day and year 
indicated below.

						PURCHASER:

						SHOPSMITH, INC.,
						an Ohio corporation


					
	By:____________________________
						   Name:
						   Title:

					
	Date:__________________________

						SELLER:

						ANGELES PARTNERS XIV,
						a California limited partnership

						By:	Angeles Realty Corporation 
II, a _____________ corporation, as general partner


						
	By:_______________________
							   Name:
							   Title:

					
	Date:__________________________

EXHIBITS TO PURCHASE AGREEMENT NOT INCLUDED