The Great Bagel and Coffee Company





                            STOCK PURCHASE AGREEMENT





                           Dated as of March 29, 1996









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                                TABLE OF CONTENTS


ARTICLE I.  PURCHASE AND SALE OF SHARES
         1.01.    Plan; Purchase and Sale of the Shares
         1.02.    Consideration
         1.03.    Closing
         1.04.    Deliveries at Closing
         1.05.    Actions Subsequent to Closing

ARTICLE II.  REPRESENTATIONS AND WARRANTIES OF THE GB&C ENTITIES
                           AND THE STOCKHOLDERS
         2.01.    Organization and Corporate Power
         2.02.    Capitalization
         2.03.    Authority of each GB&C Entity and each Stockholder
         2.04.    Ownership of Capital Stock; Related Rights
         2.05.    Investment Representations
         2.06.    Real and Personal Property
         2.07.    Financial Statements
         2.08.    Taxes
         2.09.    Collectibility of Accounts Receivable
         2.10.    Inventories
         2.11.    Absence of Certain Developments
         2.12.    Intellectual Property
         2.13.    Contracts
         2.14.    Litigation
         2.15.    Insurance
         2.16.    Warranty or Other Claims
         2.17.    Finder's Fee
         2.18.    Transactions with Interested Persons
         2.19.    Permits; Compliance with Laws
         2.20.    Environmental Compliance
         2.21.    Disclosure
         2.22.    Employees; Labor Matters
         2.23.    Customers, Distributors and Suppliers
         2.24.    Banking Relations
         2.25.    Powers of Attorney
         2.26.    Corporate Records;Copies of Documents
         2.27.    Employee Benefit Programs
         2.28.    List of Directors and Officers
         2.29.    Non-Foreign Status
         2.30.    Transfer of Shares
         2.31.    Attributes Regarding Pooling Accounting
         2.32.    Definition of the GB&C Entities' Knowledge

                                        i

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         2.33.    Stockholder Personal Guaranties

ARTICLE III.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
         3.01.    Organization
         3.02.    Certificate of Incorporation and By-Laws
         3.03.    Capitalization
         3.04.    Authority Relative to this Agreement
         3.05.    Consents and Approvals; No Violations
         3.06.    SEC Reports
         3.07.    Absence of Certain Changes
         3.08.    Brokers
         3.09.    DAKA Common Stock
         3.10.    Definition of the Company's Knowledge
         3.11.    Disclosure
         3.12.    No Investment Company
         3.13.    Tax Representations

ARTICLE IV  COVENANTS OF THE GB&C ENTITIES AND THE STOCKHOLDERS
         4.01.    Conduct of Respective Businesses of the GB&C Entities Pending
                  the Transactions Contemplated Hereby
         4.02.    Sale of Shares; Acquisition Proposals
         4.03.    Breach of Representations and Warranties
         4.04.    Confidentiality
         4.05.    Further Action; Reasonable Best Efforts
         4.06.    Access
         4.07.    Financial Information
         4.08.    General Release
         4.09.    Affiliates of the GB&C Entities

ARTICLE V.  COVENANTS OF THE COMPANY
         5.01.    Consents and Approvals
         5.02.    Confidentiality

ARTICLE VI.  CONDITIONS
         6.01.    Conditions to the Obligations of the Company
         6.02.    Conditions to the Obligations of the Stockholders

ARTICLE VII.  TERMINATION OF AGREEMENT
         7.01.    Termination
         7.02.    Effect of Termination
         7.03.    Right to Proceed

                                       ii

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ARTICLE VIII.  SURVIVAL; INDEMNIFICATION
         8.01.    Survival of Representations, Warranties, Etc
         8.02.    Indemnification by the Stockholders
         8.03.    Limitations on Indemnification by Stockholders
         8.04.    Indemnification by the Company
         8.05.    Limitations on Indemnification by the Company
         8.06.    Notice; Defense of Claims
         8.07.    Indemnification by the GB&C Entities

ARTICLE IX.  REGISTRATION RIGHTS
         9.01.    Definitions
         9.02.    Resale Registration
         9.03.    Registration Procedures
         9.04.    Registration Expenses
         9.05.    Indemnification and Contribution
         9.06.    Restrictions on Sale
         9.07.    Transfer of Registration Rights

ARTICLE X.  NON-COMPETITION AGREEMENT
         10.01.            Non-Competition Agreement

ARTICLE XI.  MISCELLANEOUS
         11.01.            Fees and Expenses
         11.02.            Accounting Matters and Tax Returns
         11.03.            Governing Law
         11.04.            Notices
         11.05.            Entire Agreement
         11.06.            Assignability
         11.07.            Captions and Gender
         11.08.            Execution in Counterparts
         11.09.            Amendments; Waivers
         11.10.            Publicity and Disclosures
         11.11.            Specific Performance
         11.12.            Severability


                                       iii

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                            STOCK PURCHASE AGREEMENT


     This Stock Purchase  Agreement (the "Agreement") is made as of this ___ day
of March, 1996, by and among DAKA  International,  Inc., a Delaware  corporation
(the  "Company"  or "DAKA"),  The Great Bagel and Coffee  Franchising  Corp.,  a
Delaware  corporation  ("GB&C1"),  GBC  Credit  Company,  a  Nevada  corporation
("GB&C2"),  Gemini Production Facility,  Inc. an Arizona corporation  ("GB&C3"),
The Great Bagel and Coffee Company,  an Arizona corporation  ("GB&C4"),  Mark C.
Gordon, Brian H. Loeb, Jason R. Olivier,  Michael F. Zerbib, Nicholas D. Zerbib,
and Thierry E.  Zerbib.  GB&C1,  GB&C2,  GB&C3 and GB&C4 are  referred to herein
individually as a "GB&C Entity" and collectively as the "GB&C Entities." Mark C.
Gordon, Brian H. Loeb, Jason R. Olivier,  Michael F. Zerbib,  Nicholas D. Zerbib
and Thierry E. Zerbib are referred to herein individually as a "Stockholder" and
collectively as the "Stockholders."


                               W I T N E S S E T H

         WHEREAS, Mark C. Gordon is the record and beneficial owner of 0.98 of a
share of the common stock, no par value per share, of GB&C1,  0.98 of a share of
the  common  stock,  no par value per  share,  of GB&C2,  0.98 of a share of the
common stock,  no par value per share,  of GB&C3,  and 1.96 shares of the common
stock, no par value per share, of GB&C4; and

         WHEREAS,  Brian H. Loeb is the  record and  beneficial  owner of 12.005
shares of the common stock, no par value per share,  of GB&C1,  12.005 shares of
the common stock, no par value per share, of GB&C2,  12.005 shares of the common
stock, no par value per share,  of GB&C3,  and 24.01 shares of the common stock,
no par value per share, of GB&C4; and

         WHEREAS,  Jason R.  Olivier is the record  and  beneficial  owner of 51
shares of the common stock,  no par value per share,  of GB&C1, 51 shares of the
common stock,  no par value per share,  of GB&C2, 51 shares of the common stock,
no par value per share,  of GB&C3,  and 102 shares of the common  stock,  no par
value per share, of GB&C4; and

         WHEREAS, Michael F. Zerbib is the record and beneficial owner of 12.005
shares of the common stock, no par value per share,  of GB&C1,  12.005 shares of
the common stock, no par value per share, of GB&C2,  12.005 shares of the common
stock, no par value per share,  of GB&C3,  and 24.01 shares of the common stock,
no par value per share, of GB&C4; and

         WHEREAS,  Nicholas  D.  Zerbib is the  record and  beneficial  owner of
12.005  shares of the common  stock,  no par value per share,  of GB&C1,  12.005
shares of the common stock, no par value per share,  of GB&C2,  12.005 shares of
the common  stock,  no par value per share,  of GB&C3,  and 24.01  shares of the
common stock, no par value per share, of GB&C4; and

         WHEREAS, Thierry E. Zerbib is the record and beneficial owner of 12.005
shares of the common stock, no par value per share,  of GB&C1,  12.005 shares of
the common stock, no 

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par value per share,  of GB&C2,  12.005 shares of the common stock, no par value
per share,  of GB&C3,  and 24.01  shares of the common  stock,  no par value per
share, of GB&C4; and

         WHEREAS,  the  Stockholders  collectively  own  all of the  issued  and
outstanding capital stock of all of the GB&C Entities (the "Shares"); and

         WHEREAS,  the Stockholders desire to transfer to DAKA all of the Shares
in exchange for shares of the common  stock,  par value $.01 per share,  of DAKA
(the  "DAKA  Common  Stock") to be issued to the  Stockholders  by DAKA and DAKA
desires to acquire from the  Stockholders all of the Shares in exchange for such
shares  of DAKA  Common  Stock in an  arrangement  (i) that  will  qualify  as a
reorganization  under the  provisions  of Section  368(a)(1)(B)  of the Internal
Revenue Code of 1986, as amended (the  "Code"),  and (ii) that will be accounted
for  as  a  pooling  of  interests,   whereby,   after  giving  effect  to  such
transactions,  DAKA will own beneficially and of record the Shares, on the terms
and conditions hereinafter set forth;

         NOW  THEREFORE,  in  consideration  of the  foregoing  and  the  mutual
covenants and  agreements  hereinafter  set forth,  the parties  hereto agree as
follows:


ARTICLE I.  PURCHASE AND SALE OF SHARES.

         1.01.  Plan;  Purchase  and Sale of the  Shares.  

         The Company and the Stockholders  hereby adopt plans of  reorganization
pursuant to the provisions of Section  368(a)(1)(B)  with respect to each of the
GB&C Entities.  The terms and conditions governing these plans of reorganization
are hereinafter set forth. Subject to the terms and conditions of this Agreement
and in reliance on the  representations,  warranties  and  covenants  herein set
forth,  the Company  hereby  agrees to purchase from the  Stockholders,  and the
Stockholders hereby agree to sell and deliver to the Company, at the Closing (as
hereinafter  defined in Section 1.03  hereof),  the Shares free and clear of any
and all liens, claims,  options,  charges,  encumbrances or rights of any nature
("Claims").

<PAGE>

         1.02.  Consideration.  

         Subject to the terms and  conditions of this  Agreement and in reliance
on the  representations,  warranties  and  covenants  set forth  herein,  and in
consideration  of the sale and delivery by the  Stockholders of the Shares,  the
Company hereby agrees to issue to the  Stockholders  for the Shares an aggregate
number of shares of DAKA Common Stock calculated by dividing (i) $7,871,736,  by
(ii) the Closing Price, with each Stockholder receiving the percentage of shares
of DAKA Common Stock set forth next to such  Stockholder's name on Schedule 1.02
attached hereto. For purposes of this Agreement,  the term "Closing Price" shall
mean the average per share  closing  sale price of DAKA Common Stock as reported
on the Nasdaq  National  Market over the thirty (30)  trading  days  immediately
preceding the third trading day prior to the Closing Date. No fractional  shares
will be issued by the Company to the Stockholders.  Instead, the total number of
shares of DAKA  Common  Stock to be issued to each  Stockholder  (regardless  of
whether  such  Stockholder's  Shares  are  represented  by a single or  multiple
certificates)  will be rounded up or down to the nearest  number of whole shares
of DAKA Common  Stock (or in the case of .5, to the next higher  whole  number).
Reference is made to the  representations and warranties of the Stockholders set
forth in Section 2.05 hereof, including,  without limitation, the acknowledgment
and  understanding  that  (a)  the  DAKA  Common  Stock  to  be  issued  to  the
Stockholders hereunder has not been registered under the Securities Act of 1933,
as amended (the  "Securities  Act"), or any state  securities laws, (b) the DAKA
Common  Stock to be issued to the  Stockholders  hereunder  will be  subject  to
transfer  restrictions  under the Securities Act and applicable state securities
laws and may not be  transferred  unless such transfer or  disposition  does not
require  registration  under  said  laws,  and  (c)  the  Company  will  place a
restrictive  legend to the foregoing effect on the  certificate(s)  representing
the DAKA Common Stock to be issued to the Stockholders hereunder. At the written
request  of the  Stockholders  furnished  not later than 30 days  following  the
Closing Date, the Company shall allocate the aggregate  number of shares of DAKA
Common Stock among each of the GB&C Entities,  based on the relative fair market
values of each of the GB&C Entities (as determined by the Stockholders (it being
acknowledged  that the Company has not participated in the determination of such
relative   value)),   and  issue   replacement   certificates  to  each  of  the
Stockholders;  it being the intent of each  Stockholder,  if written  request is
made therefor, to receive the consideration set forth in this Section 1.02 based
on the relative value of each of the GB&C Entities.

         1.03. Closing. 

         The sale and delivery and the  purchase  and  acceptance  of the Shares
(the  "Closing")  shall take place at the  offices of the Company not later than
five days after the day on which all of the  conditions  to Closing set forth in
Article VI (other than  conditions to be satisfied at the Closing which shall be
satisfied  or  waived  as of the  Closing)  have  been  satisfied  or  waived in
accordance  with the  terms  hereof,  such day being  referred  to herein as the
Closing Date.  Notwithstanding  anything in Section 7.01 to the contrary, in the
event all conditions to Closing have been satisfied or waived on or prior to the
applicable  termination  date  specified  therein,  then neither  party shall be
entitled to exercise its right of termination as contemplated  therein by reason
of the fact that this Section  1.03  contemplates  that the Closing  shall occur
five days after  satisfaction or waiver of all such  conditions,  such provision
being  included  for  the  convenience  of the  parties  and  their  counsel  in
connection with the Closing.

         1.04. Deliveries at Closing. 

         At the Closing,  (a) each  Stockholder  shall deliver a certificate  or
certificates  representing  all Shares owned  beneficially and of record by such
Stockholder,  together  with stock powers (or the  equivalent)  duly executed in
blank and such other  documents  as may be  required  to transfer to the Company
good and valid title to such Shares free and clear of all Claims, (b) DAKA shall
deliver to each  Stockholder  a certificate  or  certificates  representing  the
appropriate number of shares of DAKA Common Stock bearing the legend provided in
Section  2.05(d)  hereof  issued  in the  name of  such  Stockholder,  (c)  each
Stockholder  shall  deliver the  instruments  provided by Sections 4.08 and 4.09
hereof and(d) each Stockholder shall resign any office such Stockholder holds as
a director  and/or officer of any GB&C Entity  effective as of the Closing Date.
All transfer, excise or similar taxes arising out of the sale or delivery of the
Shares to the Company shall be paid by the Stockholders.
                                                        

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         1.05. Actions  Subsequent to Closing.

         The Stockholders and the Company after the Closing, and without further
consideration,  shall  from  time to time  execute  and  deliver  or cause to be
executed and  delivered  such  further  instruments  of  transfer,  assignments,
consents or documents as may be reasonably necessary or appropriate to carry out
the intent and purposes hereof.

ARTICLE II.  REPRESENTATIONS AND WARRANTIES OF THE GB&C ENTITIES
                  AND THE STOCKHOLDERS

         In order to  induce  the  Company  to enter  into this  Agreement,  the
Stockholders, jointly and severally, make to the Company the representations and
warranties  contained in this Article II,  except that the  representations  and
warranties in Sections  2.03(b) and 2.04 are made severally by each  Stockholder
as to himself.

         2.01.    Organization and Corporate Power.

                  (a) GB&C1 is a corporation  duly organized,  validly  existing
and in good standing  under the laws of the State of Delaware,  and is qualified
to do  business  as a foreign  corporation  in each  jurisdiction  in which such
qualification is required.  GB&C has all required  corporate power and authority
to own its  property,  to  carry  on its  business  as  presently  conducted  or
contemplated,  to enter into and perform this  Agreement  and generally to carry
out the  transactions  contemplated  hereby.  The copies of the  Certificate  of
Incorporation  and  By-laws  of  GB&C1,  as  amended  to date,  which  have been
furnished  to counsel for the Company by GB&C1,  are correct and complete at the
date  hereof.  GB&C1  is not in  violation  of any  term of its  Certificate  of
Incorporation or By-laws, or in violation of any term of any material agreement,
instrument,  judgment,  decree,  order,  or,  except as  reflected  in schedules
furnished to the Company hereunder as of the date hereof,  any statute,  rule or
government regulation applicable to GB&C1.

                  (b) GB&C2 is a corporation  duly organized,  validly  existing
and in good standing under the laws of the State of Nevada,  and is qualified to
do  business  as a  foreign  corporation  in each  jurisdiction  in  which  such
qualification is required.  GB&C2 has all required corporate power and authority
to own its  property,  to  carry  on its  business  as  presently  conducted  or
contemplated,  to enter into and perform this  Agreement  and generally to carry
out the  transactions  contemplated  hereby.  The copies of the  Certificate  of
Incorporation  and  By-laws  of  GB&C2,  as  amended  to date,  which  have been
furnished  to counsel for the Company by GB&C2,  are correct and complete at the
date  hereof.  GB&C2  is not in  violation  of any  term of its  Certificate  of
Incorporation or By-Laws, or in violation of any term of any material agreement,
instrument,  judgment,  decree,  order,  or,  except as  reflected  in schedules
furnished to the Company hereunder as of the date hereof,  any statute,  rule or
government regulation applicable to GB&C2.

                   (c) GB&C3 is a corporation  duly organized,  validly existing
and in good standing under the laws of the State of Arizona, and is qualified to
do  business  as a  foreign  corporation  in each  jurisdiction  in  which  such
qualification is required.  GB&C3 has all required corporate power and authority
to own its  property,  to  carry  on its  business  as  presently  conducted  or
contemplated,  to enter into and perform this  Agreement  and generally to carry
out the  transactions  contemplated  hereby.  The copies of the  Certificate  of
Incorporation  and  By-laws  of  GB&C3,  as  amended  to date,  which  have been
furnished  to counsel for the Company by GB&C3,  are correct and complete at the
date  hereof.  GB&C3  is not in  violation  of any  term of its  Certificate  of
Incorporation or By-Laws, or in violation of any term of any material agreement,
instrument,  judgment,  decree,  order,  or,  except as  reflected  in schedules
furnished to the Company hereunder as of the date hereof,  any statute,  rule or
government regulation applicable to GB&C3.

<PAGE>

                  (d) GB&C4 is a corporation  duly organized,  validly  existing
and in good standing under the laws of the State of Arizona, and is qualified to
do  business  as a  foreign  corporation  in each  jurisdiction  in  which  such
qualification is required.  GB&C4 has all required corporate power and authority
to own its  property,  to  carry  on its  business  as  presently  conducted  or
contemplated,  to enter into and perform this  Agreement  and generally to carry
out the  transactions  contemplated  hereby.  The copies of the  Certificate  of
Incorporation  and  By-laws  of  GB&C4,  as  amended  to date,  which  have been
furnished  to counsel for the Company by GB&C4,  are correct and complete at the
date  hereof.  GB&C4  is not in  violation  of any  term of its  Certificate  of
Incorporation or By-Laws, or in violation of any term of any material agreement,
instrument,  judgment,  decree,  order,  or,  except as  reflected  in schedules
furnished to the Company hereunder as of the date hereof,  any statute,  rule or
government regulation applicable to GB&C4.

         2.02.  Capitalization.  

         The  authorized  and issued  capital stock of each of the GB&C Entities
are as set forth in Schedule  2.02(a)  hereto.  All of the Shares have been duly
and validly authorized and issued and are fully paid and non-assessable and have
been issued in compliance with applicable federal and state securities laws. The
Shares are held of record and  beneficially  by the  Stockholders in the amounts
indicated in Schedule  2.02(b) hereto,  free and clear of any Claims.  Except as
set forth on Schedule 2.02(a) or Schedule 2.02(b),  no Stockholder is the record
or  beneficial  owner of any  capital  stock,  partnership  interest,  shares of
beneficial  interest or other  similar  interest in any GB&C  Entity.  Except as
provided  above  or in said  Schedule  2.02(a),  (i)  there  are no  outstanding
subscriptions,  options,  warrants,  commitments,  agreements,  arrangements  or
commitments  of any  kind  for or  relating  to the  issuance,  or sale  of,  or
outstanding  securities  convertible  into or  exchangeable  for,  any shares of
capital  stock  of any  class  or  other  equity  interests  of any of the  GB&C
Entities;  (ii) no person has any  preemptive  right,  right of first refusal or
similar right to acquire the Shares, any other shares of capital stock of any of
the GB&C  Entities in  connection  with the  transactions  contemplated  by this
Agreement or otherwise;  (iii) there are no  restrictions on the transfer of any
shares of capital stock of any of the GB&C Entities, other than those imposed by
relevant  state and  federal  securities  laws;  (iv) no person has any right to
cause any of the GB&C Entities to effect the  registration  under the Securities
Act of 1933,  as  amended,  of any  shares  of its  capital  stock or any  other
securities  (including  debt  securities);  (v) none of the GB&C Entities has an
obligation to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein,  or to pay any dividend or make any other distribution
in respect thereto; (vi) there are no voting trusts,  stockholders'  agreements,
or proxies relating to any securities of any of the GB&C Entities and (vii) none
of the GB&C Entities  owns or has any direct or indirect  interest in or control
over any corporation, partnership, joint venture or other entity of any kind.

         2.03.    Authority of each GB&C Entity and each Stockholder.

                  (a)  Each of the  GB&C  Entities  has full  right,  power  and
authority  to enter  into  this  Agreement  and  each  agreement,  document  and
instrument to be executed and delivered by it pursuant to or as  contemplated by
this  Agreement  and to  carry  out the  transactions  contemplated  hereby  and
thereby. The execution, delivery and performance by each of the GB&C Entities of
this Agreement and each such other agreement,  document and instrument have been
duly authorized by all necessary  corporate  action of each of the GB&C Entities
and the  Stockholders  and no other  corporate  action on the part of any of the
GB&C  Entities or the  Stockholders  is required in connection  therewith.  This
Agreement  and each  agreement,  document  and  instrument  to be  executed  and
delivered by any of the GB&C  Entities  pursuant to or as  contemplated  by this
Agreement constitute, or will when executed and delivered constitute,  valid and
binding obligations of each of the GB&C Entities, enforceable in accordance with
their  respective  terms.  Except as  reflected  in  schedules  furnished to the
Company hereunder as of the date hereof, the execution, delivery and performance
by each of the GB&C Entities of this  Agreement  and each such other  agreement,
document and instrument:

<PAGE>

(i)  do not and will not violate any  provision of the charter or by-laws of any
     of the GB&C Entities;

(ii) do not and will not violate any laws of the United States,  or any state or
     other jurisdiction applicable to any of the GB&C Entities or require any of
     the GB&C Entities to obtain any approval, consent or waiver of, or make any
     filing with, any person or entity  (governmental or otherwise) that has not
     been obtained or made;

(iii)do not and will not  result in a breach  of,  constitute  a default  under,
     accelerate  any  obligation  under,   require  a  consent  under,  cause  a
     termination  under, or give rise to a right of termination of any indenture
     or loan or credit  agreement  or any other  material  agreement,  contract,
     instrument,  mortgage,  lien, lease,  permit,  authorization,  order, writ,
     judgment,  injunction,  decree, determination or arbitration award, whether
     written or oral,  to which any of the GB&C  Entities is a party or by which
     the property of any of the GB&C Entities is bound or affected, or result in
     the creation or imposition of any mortgage, pledge, lien, security interest
     or other  charge  or  encumbrance  on any of the  assets of any of the GB&C
     Entities.
                                                     
                  (b) Each  Stockholder  has full  right,  authority,  power and
capacity  to  enter  into  this  Agreement  and  each  agreement,  document  and
instrument to be executed and delivered by him pursuant to or as contemplated by
this  Agreement  and to  carry  out the  transactions  contemplated  hereby  and
thereby.  This  Agreement  and each  agreement,  document and  instrument  to be
executed and delivered by such  Stockholder  pursuant to or as  contemplated  by
this Agreement constitute, or when executed and delivered will constitute, valid
and binding  obligations of such  Stockholder,  enforceable  in accordance  with
their  respective  terms.  Except as  reflected  in  schedules  furnished to the
Company hereunder,  the execution,  delivery and performance by such Stockholder
of this Agreement and each such agreement, document and instrument:

(i)  do not and will not violate any laws of the United States,  or any state or
     other  jurisdiction  applicable to such  Stockholder or such Stockholder to
     obtain any  approval,  consent or waiver of, or make any filing  with,  any
     person or entity  (governmental or otherwise) that has not been obtained or
     made;

(ii) do not and will not  result in a breach  of,  constitute  a default  under,
     accelerate any  obligation  under or give rise to a right of termination of
     any indenture or loan or credit agreement or any other material  agreement,
     contract, instrument, mortgage, lien, lease, permit, authorization,  order,
     writ, judgment,  injunction,  decree, determination or arbitration award to
     which  such  Stockholder  is a  party  or by  which  the  property  of such
     Stockholder  is bound or affected,  or result in the creation or imposition
     of any  mortgage,  pledge,  lien,  security  interest  or other  charge  or
     encumbrance on any of the assets or properties of any of the GB&C Entities.

         2.04.    Ownership of Capital Stock; Related Rights.

                  (a) Each  Stockholder  owns  beneficially and of record all of
the  Shares set forth  opposite  such  Stockholder's  name on  Schedule  2.02(b)
hereto.  Upon  delivery  to the  Company  at  the  Closing  of the  certificates
representing the Shares duly endorsed in blank for transfer or with stock powers
attached duly executed in blank, against delivery of the consideration  therefor
described  in  Article I hereof,  good and valid  title to the  Shares  shall be
transferred to the Company, free and clear of any and all Claims.

                   (b) Except as set forth in Schedule 2.04, no Stockholder  has
any  outstanding  subscriptions,  options,  warrants,  commitments,  agreements,
arrangements or commitments of any kind for or relating to the issuance, or sale
of, or outstanding  securities  convertible into or exchangeable for, any shares
of capital stock of any class or other equity interests of the GB&C Entities. No
Stockholder has any preemptive right, right of first refusal or similar right to
acquire the Shares or any other shares of capital  stock of the GB&C Entities in
connection  with the  transactions  contemplated by this Agreement or otherwise.
Except as set forth in Schedule 2.04,  there are no restrictions on the transfer
of the Shares by any Stockholder, other than those imposed by relevant state and
federal  securities  laws,  the GB&C  Entities  have no  obligation to purchase,
redeem or otherwise acquire any of the Shares or to pay any dividend or make any
other  distribution in respect thereto and there are no voting trusts or proxies
binding upon any Stockholder relating to any of the Shares.

         2.05.    Investment Representations.

                  (a) Each  Stockholder  is acquiring  the shares of DAKA Common
Stock  to  be  issued  to  such  Stockholder  hereunder  in  exchange  for  such
Stockholder's  Shares for such Stockholder's own account for investment only and
not with a view to, or with any intention of, a distribution  or resale thereof,
in  whole  or in  part,  in  violation  of the  Securities  Act or any  rule  or
regulation thereunder, as amended from time to time.

                  (b) No  Stockholder  (i) is directly or indirectly  controlled
by, or acting on behalf of any person which is, an "investment  company"  within
the  meaning of the  Investment  Company Act of 1940,  as  amended,  required to
register as such under such Act.

                  (c) Each  Stockholder  (i) has carefully  reviewed the Company
SEC Reports (as defined in Section  3.06 hereof)  provided by the Company;  (ii)
has requested and received such other  information,  as it has deemed  relevant,
regarding the Company for purposes of  evaluating  its  acquisition  of the DAKA
Common Stock to be issued to the Stockholders  hereunder;  (iii) is aware of the
risks  associated with an investment in the DAKA Common Stock;  and (iv) has not
received any form of general  solicitation or advertising in connection with his
or her or its  decision  to acquire  the DAKA  Common  Stock to be issued to the
Stockholders  hereunder. No Stockholder has relied in any way on any information
with  respect to the DAKA Common Stock or the Company  generally  other than the
representations  of the Company  contained herein or materials  furnished by the
Company in writing in connection herewith.

<PAGE>

                  (d) Each Stockholder acknowledges and understands that (i) the
DAKA  Common  Stock to be  issued  to the  Stockholders  hereunder  has not been
registered under the Securities Act, or any state securities laws; (ii) the DAKA
Common  Stock to be issued to the  Stockholders  hereunder  will be  subject  to
transfer  restrictions  under the Securities Act and applicable state securities
laws and may not be transferred  unless (x) it is subsequently  registered under
the Securities Act and applicable  state securities laws or (y) such transfer or
disposition does not require registration under said laws; and (iii) the Company
will place a  restrictive  legend on the  certificate(s)  representing  the DAKA
Common  Stock  to be  issued  to  the  Stockholders  hereunder,  containing  the
following language:

"The shares  represented by this  Certificate  were issued without  registration
under  the   Securities  Act  of  1933,  as  amended  (the  "Act")  and  without
registration under applicable state securities laws, in reliance upon exemptions
contained in the Act and such laws.  No transfer of these shares or any interest
therein may be made except pursuant to effective  registration  statements under
said laws unless  such  transfer or  disposition  does not require  registration
under said laws."

                  (e) Each Stockholder (i) is able to bear the economic risks of
the  acquisition of shares of DAKA Common Stock hereunder and has adequate means
of providing for current needs and possible contingencies;  (ii) either alone or
with his or her or its advisors has had the  opportunity  to ask  questions  and
receive  answers  concerning  the  Company and the terms and  conditions  of the
acquisition  of DAKA  Common  Stock in exchange  for the Shares,  as well as the
opportunity  to obtain  any  additional  information  necessary  to  verify  the
accuracy of  information  furnished in  connection  therewith  which the Company
possesses  or can acquire  without  unreasonable  effort or  expense;  and (iii)
together  with  his or her or its  advisors,  if any,  has  such  knowledge  and
experience in financial and business matters that such Stockholder is capable of
evaluating  the merits and risks of this  acquisition  of DAKA  Common  Stock in
exchange for the Shares, and of making an informed investment decision,  and has
relied solely upon the advice of his or her or its own counsel,  accountant  and
other  advisors,   with  regard  to  the  legal,   investment,   tax  and  other
considerations regarding such acquisition.

         2.06.    Real and Personal Property.

                  (a) Real Property. The GB&C Entities own no real property. All
of the real  property  leased by the GB&C  Entities  is  identified  on Schedule
2.06(a) (herein referred to as the "Leased Real Property")

(i)  Status of Leases.  All leases of Leased Real Property are  ----------------
     identified on Schedule  2.06(a),  and true and complete copies thereof have
     been delivered to the Company. Each of said leases has been duly authorized
     and executed by the respective GB&C Entity and is in full force and effect.
     Except as set forth in Schedule  2.06(a),  none of the GB&C  Entities is in
     default under any of said leases,  nor has any event occurred  which,  with
     notice or the passage of time, or both,  would give rise to such a default.
     Except as set forth in Schedule 2.06(a), to the GB&C Entities's  knowledge,
     the other party to each of said leases is not in default  under any of said
     leases and there is no event which,  with notice or the passage of time, or
     both, would give rise to such a default.

(ii) Consents.  Except as set forth in Schedule 2.06(a),  no consent or approval
     is required with respect to the transactions contemplated by this Agreement
     from the other  parties to any lease of Leased Real  Property,  or from any
     regulatory  authority,  no filing with any regulatory authority is required
     in  connection  therewith,  and to  the  extent  that  any  such  consents,
     approvals or filings are required,  the GB&C  Entities or the  Stockholders
     will use their best efforts to obtain or complete them before the Closing.

(iii)Condition   of   Leased   Real   Property.   Except   as   set   forth   in
     ---------------------------------  Schedule 2.06(a),  to the GB&C Entities'
     knowledge,  there are no material defects in the physical  condition of any
     land,  buildings  or  improvements  constituting  part of the  Leased  Real
     Property,  including without limitation,  structural  elements,  mechanical
     systems,  loading  areas,  and to the GB&C  Entities'  knowledge,  all such
     buildings and improvements are in good operating condition and repair, have
     been well  maintained and are free from  infestation by rodents or insects.
     Access to the Leased Real Property is by a public way or public street.

(iv) Compliance with the Law. None of the GB&C Entities  -----------------------
     has received any notice from any governmental authority of any violation of
     any law, ordinance,  regulation,  license,  permit or authorization  issued
     with  respect  to any Leased  Real  Property  that has not been  heretofore
     corrected and no such  violation  exists which could have an adverse affect
     on the  operation or value of any Leased Real  Property.  All  improvements
     located on or  constituting  part of the Leased Real Property and their use
     and  operation by the GB&C  Entities  were and are now in compliance in all
     respects  with all  applicable  laws,  ordinances,  regulations,  licenses,
     permits and  authorizations,  expect as set forth in Schedule  2.06(a).  No
     approval or consent to the  transactions  contemplated by this Agreement is
     required of any governmental authority with jurisdiction over any aspect of
     the  Leased  Real  Property  or its use or  operations.  None  of the  GB&C
     Entities  has  received  any notice of any real  estate tax  deficiency  or
     assessment or is aware of any proposed deficiency, claim or assessment with
     respect to any of the Leased Real  Property,  or any pending or  threatened
     condemnation thereof.

<PAGE>

                   (b) Personal Property. A complete description of the material
machinery and  equipment of the GB&C  Entities is contained in Schedule  2.06(b)
hereto. Except as specifically disclosed in said Schedule or in the Base Balance
Sheet  (as  hereinafter  defined),  each  of the  GB&C  Entities  has  good  and
marketable  title  to all of its  personal  property.  Except  as set  forth  in
Schedule  2.06(b)  none of such  personal  property  or assets is subject to any
mortgage, pledge, lien, conditional sale agreement,  security title, encumbrance
or other charge except as specifically disclosed in said Schedule or in the Base
Balance Sheet. The Base Balance Sheet reflects all personal  property of each of
the GB&C Entities. Except as otherwise specified in Schedule 2.06(b) hereto, all
leasehold improvements, furnishings, machinery and equipment of each of the GB&C
Entities are in good repair, have been well maintained, and substantially comply
with all applicable  laws,  ordinances and  regulations,  and such machinery and
equipment is in good working order (ordinary wear and tear excepted).

         2.07.    Financial Statements.

                  (a) The  GB&C  Entities  have  delivered  to the  Company  the
following financial statements,  copies of which are attached hereto as Schedule
2.07:

(i)  Consolidated balance sheet of the GB&C Entities as at February 29, 1996 and
     related statements of income,  retained earnings and cash flows for the two
     (2) month period then ended (such base balance  sheet as referred to herein
     as the "Base Balance Sheet");

(ii) Separate  balance  sheets of the GB&C  Entities as at February 29, 1996 and
     related statements of income for the two (2) month period then ended;

(iii)Consolidated  balance  sheet as at December  31,  1995 and  related  income
     statement of the GB&C Entities for the fiscal year then ended;

(iv) Separate  balance  sheets  as at  December  31,  1995  and  related  income
     statements for each of the GB&C Entities for the fiscal year then ended;

(v)  Balance  sheet as at December  31, 1994 and  statement  of  operations  and
     retained earnings for the fiscal year then ended for GB&C4;

(vi) Balance  sheet as at December  31, 1994 and  statement  of  operations  and
     retained  earnings and statement of cash flows for the period from February
     9, 1994 through December 31, 1994 for GB&C1.

         Said  financial  statements  have  been  prepared  in  accordance  with
generally accepted accounting principles applied consistently during the periods
covered thereby,  are complete and correct in all material  respects and present
fairly in all material respects the financial  condition of the GB&C Entities at
the dates of said statements and the results of their operations for the periods
covered thereby.

                   (b) As of the date of the  Base  Balance  Sheet,  none of the
GB&C Entities had any  liabilities  of any nature,  whether  accrued,  absolute,
contingent or otherwise,  asserted or  unasserted,  known or unknown  (including
without  limitation,  liabilities  as  guarantor  or  otherwise  with respect to
obligations  of others,  liabilities  for taxes due or then accrued or to become
due, or contingent or potential  liabilities  relating to activities of the GB&C
Entities or the conduct of their  business prior to the date of the Base Balance
Sheet  regardless of whether  claims in respect  thereof had been asserted as of
such date), except liabilities stated or adequately reserved against on the Base
Balance Sheet, or reflected in Schedules  furnished to the Company  hereunder as
of the date hereof.

<PAGE>

                  (c) As of the date hereof and as of the  Closing,  none of the
GB&C  Entities  has had and will have any  liabilities  of any  nature,  whether
accrued,  absolute,  contingent or otherwise,  asserted or unasserted,  known or
unknown  (including  without  limitation,  liabilities as guarantor or otherwise
with respect to  obligations  of others,  or  liabilities  for taxes due or then
accrued or to become due or  contingent  or  potential  liabilities  relating to
activities  of the GB&C Entities or the conduct of their  business  prior to the
date hereof or the Closing,  as the case may be, regardless of whether claims in
respect  thereof  had been  asserted as of such date),  except  liabilities  (i)
stated or  adequately  reserved  against on the Base Balance  Sheet or the notes
thereto,  (ii) reflected in Schedules  furnished to the Company hereunder on the
date hereof,  or (iii)  incurred after the date of the Base Balance Sheet in the
ordinary course of business of any GB&C Entity.

         2.08.    Taxes.

                  (a) The  GB&C  Entities  have  paid or  caused  to be paid all
federal,  state, local,  municipal,  foreign, and other taxes, including without
limitation  income taxes,  estimated taxes,  alternative  minimum taxes,  excise
taxes,  sales  taxes,  use  taxes,  value-added  taxes,  gross  receipts  taxes,
franchise  taxes,  capital stock taxes,  employment and  payroll-related  taxes,
withholding  taxes, stamp taxes,  transfer taxes and property taxes,  whether or
not measured in whole or in part by net income,  and all deficiencies,  or other
additions  to tax,  interest,  fines  and  penalties  owed by it  (collectively,
"Taxes"), required to be paid by it through the date hereof, whether disputed or
not.

                  (b) The GB&C Entities have in accordance  with  applicable law
filed all federal,  state, local and foreign tax returns required to be filed by
them through the date hereof,  and all such returns correctly and accurately set
forth the amount of any Taxes relating to the applicable  period.  A list of all
federal,  state,  local and foreign income tax returns filed with respect to the
GB&C  Entities  after 1992 is set forth in Schedule 2.08  attached  hereto.  For
every taxable period of each of the GB&C Entities ended on or after December 31,
1992,  the GB&C  Entities  have  delivered  to the Company  complete and correct
copies of all federal, state, local and foreign income tax returns,  examination
reports and statements of deficiencies assessed against or agreed to by the GB&C
Entities.  Schedule  2.08  attached  hereto sets forth all federal tax elections
under the Internal  Revenue Code of 1986, as amended (the  "Code"),  that are in
effect with respect to each of the GB&C Entities or for which an  application by
the GB&C Entities is pending.

                   (c)  Neither  the  Internal  Revenue  Service  nor any  other
governmental  authority  is now  asserting  or,  to the  knowledge  of the  GB&C
Entities or the Stockholders,  threatening to assert against any GB&C Entity any
deficiency  or claim  for  additional  Taxes.  No claim has ever been made by an
authority  in a  jurisdiction  where the GB&C  Entities do not file  reports and
returns  that any of the GB&C  Entities is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of any of the
GB&C Entities that arose in connection with any failure (or alleged  failure) to
pay any Tax. None of the GB&C Entities has not entered into a closing  agreement
pursuant to Section 7121 of the Code.

                  (d)  Except as set forth in  Schedule  2.08  attached  hereto,
there  has not  been  any  audit  of any tax  return  filed  by any of the  GB&C
Entities, no audit of any tax return of any of the GB&C Entities is in progress,
and none of the GB&C Entities has been  notified by any tax  authority  that any
such audit is contemplated or pending.  Except as set forth in Schedule 2.08, no
extension of time with respect to any date on which a tax return was or is to be
filed by any of the GB&C Entities is in force, and no waiver or agreement by any
of the GB&C Entities is in force for the extension of time for the assessment or
payment of any Taxes.

                  (e) None of the GB&C  Entities has ever  consented to have the
provisions  of Section  341(f)(2)  of the Code  applied to it.  None of the GB&C
Entities has agreed to, and none of the GB&C Entities has been  requested by any
governmental authority to, make any adjustments under Section 481(a) of the Code
by reason  of a change  in  accounting  method  or  otherwise.  None of the GB&C
Entities has ever made any payments, or is obligated to make any payments, or is
a party to any agreement that under certain  circumstances  would obligate it to
make any payments,  that will not be deductible  under Section 280G of the Code.
Each of the GB&C  Entities has  disclosed on its federal  income tax returns all
positions  taken therein that could give rise to a penalty for  underpayment  of
federal Tax under  Section 6662 of the Code.  None of the GB&C Entities has ever
had any  liability  for unpaid  Taxes  because it is a member of an  "affiliated
group"  (as  defined in  Section  1504(a)  of the Code).  Except as set forth in
Schedule  2.08  attached  hereto,  the GB&C  Entities are not a party to any tax
sharing agreement.

                  (f) Schedule  2.08 sets forth the following  information  with
respect to the GB&C Entities as of the most recent  practicable date (as well as
on an  estimated  pro forma  basis as of the Closing  Date giving  effect to the
consummation of the transactions contemplated hereby): the tax basis of the GB&C
Entities  in their  assets  and  liabilities  and the  amount of any  unused and
unexpired net operating loss, net capital loss,  investment credit,  foreign tax
credit, other credit or excess charitable contribution carryforwards of the GB&C
Entities;

For purposes of this Section 2.08,  all references to Sections of the Code shall
include any predecessor  provisions to such Sections and any similar  provisions
of federal, state, local or foreign law.

<PAGE>

         2.09.  Collectibility  of Accounts  Receivable. 

         Except as set forth on Schedule 2.09 all of the accounts  receivable of
the GB&C  Entities  shown or reflected on the Base Balance  Sheet or existing at
the date hereof  (less the  reserve for bad debts set forth on the Base  Balance
Sheet) are and all the accounts  receivable of the GB&C Entities existing on the
Closing Date will then be valid and enforceable  claims,  fully  collectible and
subject to no setoff or  counterclaim.  Except as set forth on Schedule 2.09 the
GB&C Entities do not have any accounts or loans receivable from any person, firm
or corporation  which is affiliated with the GB&C Entities or from any director,
officer, employee or Stockholder of the GB&C Entities.

         2.10. Inventories. 

         Except as disclosed in Schedule 2.10, all inventory  items shown on the
Base  Balance  Sheet or  existing  at the date  hereof  are and all  inventories
existing on the Closing Date will then be of a quality and quantity  saleable in
the ordinary course of business of the Company. All inventory items disclosed on
Schedule  2.10 as  exceptions  pursuant to the  immediately  preceding  sentence
reflect  write-downs to realizable values in the case of items which have become
obsolete or  unsalable  through  regular  distribution  channels in the ordinary
course of the  business  of the GB&C  Entities.  The  values of the  inventories
stated in the Base Balance Sheet and the latest  balance  sheet  included in the
unaudited  financial  statements reflect the normal inventory valuation policies
of the GB&C  Entities  consistent  with past  practices  and were  determined in
accordance with generally accepted accounting principles,  practices and methods
consistently  applied.   Purchase  commitments  are  not  in  excess  of  normal
requirements  and none is at a price  materially  in  excess of  current  market
prices.  Since the date of the Base Balance Sheet,  no inventory items have been
sold or disposed of except through sales in the ordinary course of business.

         2.11. Absence of Certain Developments. 

         Except as  specifically  disclosed in Schedule 2.11,  since the date of
the Base Balance Sheet, there has not been:

                  (a) Any change in the financial condition, properties, assets,
liabilities,  business or operations of any of the GB&C Entities which change by
itself or in conjunction with all other such changes has been materially adverse
with respect to any of the GB&C Entities;

                  (b)  Any  contingent  liability  incurred  by any of the  GB&C
Entities as guarantor or otherwise with respect to the  obligations of others or
any  cancellation  of any  material  debt or claim  owing  to,  or waiver of any
material right of, any of the GB&C Entities;

                  (c) Except as set forth on  Schedule  2.06(b),  any  mortgage,
encumbrance  or lien placed on any of the properties of any of the GB&C Entities
which  remains in  existence  on the date  hereof or will  remain on the Closing
Date;

                  (d) Any obligation or liability of any nature  incurred by any
of the GB&C  Entities,  whether  accrued,  absolute,  contingent  or  otherwise,
asserted or unasserted, known or unknown, other than obligations and liabilities
incurred in the ordinary  course of business  consistent  with the terms of this
Agreement (it being understood that product liability claims shall not be deemed
to be incurred in the ordinary course of business);

                  (e) Any purchase, sale or other disposition,  or any agreement
or other arrangement for the purchase, sale or other disposition,  of any of the
properties  or assets of any of the GB&C  Entities  other  than in the  ordinary
course of business;

                                                        

<PAGE>



                   (f) Any damage,  destruction or loss,  whether or not covered
by insurance,  materially  and adversely  affecting  the  properties,  assets or
business of any of the GB&C Entities;

                  (g) Any declaration,  setting aside or payment of any dividend
by any of, or the making of any other  distribution  in respect of the ownership
interests  of any of the GB&C  Entities,  or any direct or indirect  redemption,
purchase or other  acquisition  by any of the GB&C Entities of its own ownership
interests;

                  (h) Any  labor  trouble  or claim of  unfair  labor  practices
involving any of the GB&C Entities; any change in the compensation payable or to
become  payable by any of the GB&C Entities to any of its  officers,  directors,
employees,  agents,  independent  contractors or stockholders  other than normal
merit increases in accordance with its usual practices,  or any bonus payment or
arrangement  made  to or  with  any  of  such  officers,  employees,  agents  or
independent contractors (subject to Section 4.01(g));

                   (i) Any change with respect to the officers or  management of
any of the GB&C Entities;

                  (j)  Any  payment  (i)  on  account  of the  promissory  notes
described in Schedule 2.18, or (ii) (other than mandatory scheduled payments) on
account of the promissory notes or other liabilities of any of the GB&C Entities
set forth in Section (xii) (Promissory Notes) of Schedule 2.13;

                  (k) Any  obligation or liability  incurred or any payment made
or  item  of  value  delivered  by any  of the  GB&C  Entities  to any of  their
respective present or former officers,  directors,  stockholders,  partners,  or
employees,  or any loans or advances  made by any of the GB&C Entities to any of
their respective present or former officers, directors,  stockholders,  partners
or  employees,  except normal  compensation  and expense  allowances  payable to
officers or employees subject to Section 4.01(g);

                   (l) Any change in accounting  methods or  practices,  used by
any of the GB&C Entities;

                   (m) Any  other  transaction  entered  into by any of the GB&C
Entities other than transactions in the ordinary course of business; or

                  (n) Any  agreement  or  understanding  whether  in  writing or
otherwise,  for any of the GB&C Entities or the  Stockholders to take any of the
actions specified in paragraphs (a) through (m) above.

         2.12.    Intellectual Property.

                   (a) Except as described in Schedule  2.12,  the GB&C Entities
have  ownership,  or  unrestricted  license to use, of all patents,  copyrights,
service works,  trade dress,  trade secrets,  trademarks,  or other  proprietary
rights  (collectively,  "Intellectual  Property")  used  or to be  used  in  the
business of the GB&C Entities as presently  conducted or contemplated.  The GB&C
Entities' rights in all of such Intellectual  Property are freely  transferable.
Except as  described  in  Schedule  2.12,  there are no claims or demands of any
other person pertaining to any of such Intellectual  Property and no proceedings
have been instituted,  or are pending or threatened,  which challenge the rights
of the GB&C  Entities in respect  thereof.  The GB&C  Entities have the right to
use, free and clear of claims or rights of other  persons,  all customer  lists,
recipes,  operating  procedures,  designs,  manufacturing  or  other  processes,
computer  software,  systems,  data  compilations,  research  results  and other
information  required  for or incident to the  ownership  and  operation  of the
business of the GB&C Entities as presently conducted or contemplated.

<PAGE>

                  (b) All patents,  patent applications,  trademarks,  trademark
applications and registrations  and registered  copyrights which are owned by or
licensed  to any of the GB&C  Entities  or used or to be used by any of the GB&C
Entities in their business as presently conducted or contemplated, and all other
items of Intellectual  Property which are material to the business or operations
of any of the GB&C  Entities,  are listed in Schedule 2.12. All of such patents,
patent  applications,   trademark  registrations,   trademark  applications  and
registered  copyrights  have been duly  registered in, filed in or issued by the
United  States  Patent and  Trademark  Office,  the United  States  Register  of
Copyrights, or the corresponding offices of other jurisdictions as identified on
said Schedule,  and have been properly maintained and renewed in accordance with
all applicable  provisions of law and  administrative  regulations in the United
States and each such jurisdiction.

                  (c) All  licenses or other  agreements  under which any of the
GB&C Entities are granted rights in Intellectual Property are listed in Schedule
2.12. All said licenses or other agreements are in full force and effect,  there
is no  material  default by any GB&C Entity who is a party  thereto,  and to the
GB&C Entities'  knowledge there is no material default by any party thereto that
is not a GB&C Entity, and, except as set forth on Schedule 2.12, all of any GB&C
Entity's rights thereunder are freely  assignable.  To the knowledge of the GB&C
Entities,  the licensors  under said licenses and other  agreements have and had
all requisite power and authority to grant the rights  purported to be conferred
thereby. True and complete copies of all such licenses or other agreements,  and
any amendments thereto, have been provided to the Company.

                  (d) All  licenses or other  agreements  under which any of the
GB&C Entities has granted  rights to others in  Intellectual  Property  owned or
licensed by the GB&C Entities are listed in Schedule  2.12. All of said licenses
or other  agreements are in full force and effect,  there is no material default
by any party  thereto,  and,  except as set forth on Schedule  2.12,  all of the
rights of the GB&C Entities thereunder are freely assignable.  True and complete
copies of all such licenses or other  agreements,  and any  amendments  thereto,
have been provided to the Company.

                   (e) The GB&C  Entities  have  taken  all  steps  required  in
accordance  with  sound  business  practice  to  establish  and  preserve  their
ownership of all  Intellectual  Property  rights with respect to their products,
services  and  concepts.  Except as  described  in  Schedule  2.12(e),  the GB&C
Entities  have no knowledge of any  infringement  by others of any  Intellectual
Property rights of the GB&C Entities.

                  (f) The  present and  contemplated  business,  activities  and
products of the GB&C Entities do not infringe any  Intellectual  Property of any
other person. No proceeding  charging the GB&C Entities with infringement of any
adversely  held  Intellectual  Property  has been filed or is  threatened  to be
filed.  To the  knowledge  of the  GB&C  Entities,  there  exists  no  unexpired
trademark  or service mark or related  application  which  includes  claims that
would be infringed by or otherwise adversely affect the products,  activities or
business  of the  GB&C  Entities.  The GB&C  Entities  were not made and are not
making unauthorized use of any confidential  information or trade secrets of any
person, including without limitation, any former employer of any past or present
employee of the GB&C  Entities.  Except as set forth in Schedule  2.12, the GB&C
Entities  do not  have,  and,  to the  knowledge  of the  GB&C  Entities  or the
Stockholders,  none of the GB&C  Entities'  employees  have,  any  agreements or
arrangements   with  any  persons  other  than  the  GB&C  Entities  related  to
confidential  information  or trade secrets of such persons or  restricting  any
such employee's engagement in business activities of any nature.

         2.13.  Contracts.  

                   (a) Except for contracts,  commitments, plans, agreements and
licenses described in Schedule 2.13 (true and complete copies of which have been
delivered to the  Company),  none of the GB&C  Entities is a party to or subject
to:

(i)  any plan or  contract  providing  for  bonuses,  pensions,  options,  stock
     purchases,  deferred  compensation,  retirement  payments,  profit sharing,
     collective  bargaining or the like,  or any contract or agreement  with any
     labor union;

<PAGE>

(ii) any  employment  contract or contract for services,  or any contract  which
     provides for discretionary payments (including, without limitation bonuses,
     incentive payments,  stock dividends, or payments relating to the ownership
     of  stock)  which is not  terminable  within  30 days by such  GB&C  Entity
     without liability for any penalty or severance payment;

(iii)any contract or agreement  for the purchase of any  commodity,  material or
     equipment  except  purchase  orders in the  ordinary  course  for less than
     $5,000 each, such orders not exceeding $10,000 in the aggregate;

(iv) any other  contracts or agreements  creating any  obligations  of such GB&C
     Entity of $10,000 or more with  respect to any such  contract or  agreement
     not specifically disclosed elsewhere under this Agreement;

(v)  any   contract  or  agreement   providing   for  the  purchase  of  all  or
     substantially  all of  its  requirements  of a  particular  product  from a
     supplier;
                                                
(vi) any contract or agreement  which by its terms does not  terminate or is not
     terminable without penalty by such GB&C Entity or its successors within one
     year after the date hereof;

(vii)any  contract or  agreement  for the sale or lease of its products not made
     in the ordinary course of business;

(viii) any contract with any sales agent or distributor of products of such GB&C
     Entity;

(ix) any contract containing  covenants limiting the freedom of such GB&C Entity
     to compete in any line of business or with any person or entity;

(x)  any contract or  agreement  for the purchase of any fixed asset for a price
     in excess of $5,000 whether or not such purchase is in the ordinary  course
     of business;

(xi) any license agreement (as licensor or licensee);

(xii)any indenture,  mortgage,  promissory  note,  loan  agreement,  guaranty or
     other agreement or commitment for the borrowing of money; or

(xiii) any  contract  or  agreement  with any  officer,  employee,  director  or
     stockholder  of such  GB&C  Entity  or with any  persons  or  organizations
     controlled by or affiliated with it.

         (b) All contracts,  agreements,  leases and instruments to which any of
the GB&C  Entities is a party or by which any of the GB&C  Entities is obligated
are valid and are in full  force and  effect  and  constitute  legal,  valid and
binding  obligations  of such GB&C  Entity  and,  to the best  knowledge  of the
Stockholders and the GB&C Entities,  the other parties  thereto,  enforceable in
accordance  with  their  respective  terms.  None of the  GB&C  Entities  or any
Stockholder knows of any notice or threat of or basis for the termination of any
such agreements within one year from the date hereof, which termination may have
a  material  adverse  effect  on the  properties,  assets,  business,  condition
(financial or otherwise),  total  surplus,  results of operation or prospects (a
"Material Adverse Effect") of the GB&C Entities or, to the best knowledge of the
Stockholders,  any other party to any material contract, agreement or instrument
of the GB&C Entities is in default in complying with any provisions thereof, and
no condition or event or fact exists which,  with notice,  lapse of time or both
would  constitute a default  thereunder  on the part of the GB&C Entities or, to
the best knowledge of the Stockholders,  any other party thereto, except for any
such default,  condition,  event or fact that, individually or in the aggregate,
would not have a Material Adverse Effect on any of the GB&C Entities.

         2.14.    Litigation.  

         Except  as  disclosed  in  Schedule  2.14,  there is no  litigation  or
governmental  proceeding or  investigation  pending or, to the best knowledge of
the  GB&C  Entities  or the  Stockholders,  threatened  against  any of the GB&C
Entities  affecting any of their properties or assets, or against any officer or
key  employee of any of the GB&C  Entities  relating to the business of the GB&C
Entities, or which may call into question the validity, or materially hinder the
enforceability  or performance,  of this  Agreement;  nor has there occurred any
event or does there exist any  condition  on the basis of which any  litigation,
proceeding or  investigation  might properly be instituted  with any substantial
chance of a recovery which would be materially adverse to the GB&C Entities.

<PAGE>

         2.15.  Insurance.  

         The physical  properties and assets of the GB&C Entities are insured to
the  extent   disclosed  in  Schedule  2.15  and  all  insurance   policies  and
arrangements of the GB&C Entities are disclosed in said Schedule. Said insurance
policies  and  arrangements  are in full force and  effect,  all  premiums  with
respect  thereto are currently  paid, and the GB&C Entities are in compliance in
all respects with the terms  thereof.  Said  insurance is adequate and customary
for  the  business  engaged  in by  the  GB&C  Entities  and is  sufficient  for
compliance by the GB&C Entities with all  requirements of law and all agreements
and leases to which the GB&C Entities are a party.

         2.16.  Warranty or Other  Claims.  

         There are no  existing or  threatened  product  liability,  warranty or
other  similar  claims,  or any fact upon which a claim of such nature  could be
based,  against any of the GB&C  Entities  for  products  or services  which are
defective or fail to meet any product or service warranties.

         2.17.  Finder's Fee.  

         Except as provided on Schedule  2.17,  none of the GB&C Entities or the
Stockholders  has  incurred  or become  liable for any  broker's  commission  or
finder's fee relating to or in connection with the transactions  contemplated by
this Agreement.

         2.18.  Transactions  with  Interested  Persons.  

         Except as set forth in Schedule 2.18 hereto,  none of the Stockholders,
officers,  supervisory  employees or directors of the GB&C  Entities and, to the
knowledge of the GB&C  Entities or the  Stockholders,  none of their  respective
spouses or family  members owns directly or indirectly on an individual or joint
basis any  material  interest  in, or serves as an  officer  or  director  or in
another  similar  capacity  of, any  competitor  or  supplier of any of the GB&C
Entities,  or any organization which has a material contract or arrangement with
the GB&C  Entities.  Except as set forth in Schedule  2.18,  there are no loans,
leases or other continuing transactions between any of the GB&C Entities and any
present or former stockholder,  director or officer of any of the GB&C Entities,
or any member of such officer's,  director's or stockholder's  immediate family,
or any person controlled by such officer,  director or stockholder or his or her
immediate family.

         2.19.  Permits;  Compliance with Laws.  

         Except as set forth in Schedule  2.06(a),  the GB&C  Entities  have all
necessary franchises,  authorizations,  approvals,  orders, consents,  licenses,
certificates,  permits,  registrations,   qualifications  or  other  rights  and
privileges (collectively "Permits") necessary to permit the GB&C Entities to own
their respective  properties and to conduct their  respective  businesses as the
same are  presently  conducted or proposed to be conducted  and all such Permits
are valid and in full force and effect. No Permit is subject to termination as a
result of the execution of the  Agreement or  consummation  of the  transactions
contemplated  hereby.  The GB&C  Entities  are now and have  heretofore  been in
compliance  with  all  applicable  statutes,   ordinances,   orders,  rules  and
regulations  (including  all  applicable  environmental  laws  and  regulations)
promulgated by any federal,  state,  municipal or other  governmental  authority
which apply to the conduct of their business, except for any such non-compliance
or violation that,  individually or in the aggregate,  would not have a Material
Adverse Effect on any of the GB&C  Entities.  None of the GB&C Entities has ever
entered into or been subject to any judgment,  consent decree,  compliance order
or  administrative  order with respect to any environmental or health and safety
law  or  received  any  request  for   information,   notice,   demand   letter,
administrative  inquiry or formal or informal complaint or claim with respect to
any  environmental  or health and safety matter or the  enforcement  of any such
law. None of the GB&C Entities and none of the Stockholders knows of any pending
or threatened  change of any law,  ordinance or regulation which could adversely
affect any of the GB&C Entities or any of their businesses.

<PAGE>

         2.20.    Environmental Compliance.

                  (a) To the best of the GB&C  Entities'  and the  Stockholders'
knowledge,  except as set forth in Schedule  2.20, (i) none of the GB&C Entities
has ever generated,  transported, used, stored, treated, disposed of, or managed
any Hazardous Waste (as defined below);  (ii) no Hazardous  Material (as defined
below) has ever been or is threatened to be spilled, released, or disposed of at
any site presently or formerly owned,  operated,  leased,  or used by any of the
GB&C Entities,  or has ever come to be located in the soil or groundwater at any
such site;  (iii) no Hazardous  Material has ever been transported from any site
presently  or  formerly  owned,  operated,  leased,  or used by any of the  GB&C
Entities for treatment,  storage,  or disposal at any other place;  (iv) none of
the  GB&C  Entities  presently  own,  operate,  lease,  or use,  nor  have  they
previously  owned,  operated,  leased,  or used any  site on  which  underground
storage tanks are or were located;  and (v) no lien has ever been imposed by any
governmental agency on any property,  facility,  machinery,  or equipment owned,
operated,  leased,  or used by any of the GB&C Entities in  connection  with the
presence of any Hazardous Material.

                  (b) To the best of the GB&C  Entities'  and the  Stockholders'
knowledge,  except as set forth in Schedule  2.20, (i) none of the GB&C Entities
has liability  under, nor has any GB&C Entity ever violated,  any  Environmental
Law (as defined  below);  (ii) each of the GB&C  Entities,  any property  owned,
operated,  leased,  or used by the any of the GB&C Entities,  and any facilities
and  operations   thereon  are  presently  in  compliance  with  all  applicable
Environmental  Laws;  (iii) none of the GB&C  Entities  has ever entered into or
been  subject  to  any  judgment,   consent   decree,   compliance   order,   or
administrative  order  with  respect to any  environmental  or health and safety
matter  or  received  any  request  for  information,   notice,  demand  letter,
administrative inquiry, or formal or informal complaint or claim with respect to
any  environmental  or  health  and  safety  matter  or the  enforcement  of any
Environmental  Law; and (iv) none of the GB&C Entities have  knowledge or reason
to know that any of the items  enumerated in clause (iii) of this paragraph will
be forthcoming.

                   (c) To the best of the GB&C  Entities' and the  Stockholders'
knowledge,  except as set  forth in  Schedule  2.20,  no site  owned,  operated,
leased,  or  used  by  any  of  the  GB&C  Entities  contains  any  asbestos  or
asbestos-containing  material, any polychlorinated biphenyls (PCBs) or equipment
containing PCBs, or any urea formaldehyde foam insulation.

                  (d) To the best of the GB&C  Entities'  and the  Stockholders'
knowledge,  the  GB&C  Entities  have  provided  to the  Company  copies  of all
documents,  records,  and information  available to the GB&C Entities concerning
any  environmental  or health  and  safety  matter  relevant  to any of the GB&C
Entities,  whether generated by the GB&C Entities or others, including,  without
limitation,   environmental   audits,   environmental  risk  assessments,   site
assessments,  documentation  regarding off-site disposal of Hazardous Materials,
spill control plans, and reports, correspondence,  permits, licenses, approvals,
consents, and other authorizations related to environmental or health and safety
matters issued by any governmental agency.

                  (e)  For  purposes  of  this  Section  2.20,   (i)  "Hazardous
Material"  shall mean and  include  any  hazardous  waste,  hazardous  material,
hazardous  substance,  petroleum  product,  oil,  toxic  substance,   pollutant,
contaminant, or other substance which may pose a threat to the environment or to
human health or safety,  as defined or regulated  under any  Environmental  Law;
(ii) "Hazardous  Waste" shall mean and include any hazardous waste as defined or
regulated under any Environmental Law; (iii)  "Environmental Law" shall mean any
environmental or health and safety-related law, regulation,  rule, ordinance, or
by-law at the foreign,  federal,  state, or local level,  whether existing as of
the date hereof,  previously  enforced,  or subsequently  enacted;  and (iv) the
"GB&C  Entities" shall mean and include the GB&C Entities and all other entities
for whose  conduct the GB&C  Entities are or may be held  responsible  under any
Environmental Law.

<PAGE>

         2.21.  Disclosure.  

         The  representations,  warranties  and  statements  contained  in  this
Agreement and in the  certificates,  exhibits and schedules  delivered by any of
the Stockholders or the GB&C Entities  pursuant to this Agreement to the Company
do not  contain  any  untrue  statement  of a  material  fact,  and,  when taken
together,  do not omit to state a material fact required to be stated therein or
necessary in order to make such  representations,  warranties or statements  not
misleading in light of the circumstances under which they were made. There is no
material fact directly relating to the business,  operations or condition of the
GB&C  Entities  (other than facts  which  relate to general  economic  trends or
conditions)  that has a Material Adverse Effect or, to the best knowledge of the
GB&C  Entities  and the  Stockholders,  in the  future may (so far as may now be
reasonably  foreseen based upon material facts of which they are now aware) have
a  Material  Adverse  Effect on any of the GB&C  Entities  that has not been set
forth  in  this  Agreement  or in  the  Schedules  hereto.  Notwithstanding  any
provision in this  Agreement to the contrary,  neither the GB&C Entities nor any
Stockholder  makes any  representation  regarding  the accuracy of any financial
forecasts furnished to the Company with respect to the GB&C Entities.

         2.22.    Employees; Labor Matters.  

         The  GB&C  Entities  employ  a  total  of  approximately  48  full-time
employees and 36 part-time employees and generally enjoy good  employer-employee
relationships.  None of the  GB&C  Entities  currently  employs,  will as of the
Closing date employ, or has employed during the six calendar months prior to the
Closing date 48 or more employees in any single  facility.  The GB&C Entities do
not employ a total of 48 or more  employees  (excluding  employees who work less
than 20 hours per week or who have worked for the GB&C Entities less than six of
the last twelve  months) and will not have employed 48 or more  employees at any
point during the 90 days prior to and including  the Closing  date.  None of the
GB&C  Entities is  delinquent in payments to any of its employees for any wages,
salaries,  commissions,  bonuses or other direct  compensation  for any services
performed for it to the date hereof or amounts required to be reimbursed to such
employees. Upon termination of the employment of any of said employees,  neither
the  GB&C  Entities  nor  the  Company  will  by  reason  of  the   transactions
contemplated  under this  Agreement  or  anything  done prior to the  Closing be
liable  to any of said  employees  for  so-called  "severance  pay" or any other
payments,  except as set forth in Schedule  2.22.  None of the GB&C Entities has
any policy,  practice,  plan or program of paying  severance  pay or any form of
severance compensation in connection with the termination of employment,  except
as set forth in said  Schedule.  The GB&C  Entities are in  compliance  with all
applicable laws and regulations  respecting labor,  employment,  fair employment
practices, work place safety and health, terms and conditions of employment, and
wages and hours.  There are no charges of  employment  discrimination  or unfair
labor practices, nor are there any strikes, slowdowns, stoppages of work, or any
other concerted interference with normal operations which are existing,  pending
or  threatened  against  or  involving  any of the GB&C  Entities.  No  question
concerning  representation  exists  respecting  any employees of any of the GB&C
Entities.  There are no  grievances,  complaints or charges that have been filed
against  any of  the  GB&C  Entities  under  any  dispute  resolution  procedure
(including,  but not limited to, any  proceedings  under any dispute  resolution
procedure under any collective  bargaining agreement) that might have an adverse
effect  on  any  of  the  GB&C  Entities  or the  conduct  of  their  respective
businesses,  and there is no  arbitration or similar  proceeding  pending and no
claim  therefor has been  asserted.  No  collective  bargaining  agreement is in
effect or is  currently  being or is about to be  negotiated  by any of the GB&C
Entities. None of the GB&C Entities has received any information indicating that
any of its  employment  policies or  practices  is  currently  being  audited or
investigated by any federal,  state or local government agency. Each of the GB&C
Entities  is, and at all times since  November 6, 1986 has been,  in  compliance
with the requirements of the Immigration Reform Control Act of 1986.

         2.23.  Customers,  Distributors  and Suppliers.  

         Schedule  2.23(a)  sets forth any  customer,  sales  representative  or
distributor  (whether  pursuant to a commission,  royalty or other  arrangement)
which  accounts for more than 20% of the sales of any GB&C Entity for the twelve
(12)  months  ended  December  31,  1995   (collectively,   the  "Customers  and
Distributors"). Schedule 2.23(b) lists all of the suppliers of the GB&C Entities
to whom during the fiscal year ended December 31, 1995,  the GB&C  Entities,  in
the aggregate,  made payments aggregating $10,000 or more showing,  with respect
to each, the name,  address and dollar volume  involved (the  "Suppliers").  The
relationships  of the GB&C  Entities  with  their  Customers,  Distributors  and
Suppliers are good commercial working relationships. No Customer, Distributor or
Supplier  has  canceled,   materially  modified,  or  otherwise  terminated  its
relationship  with  any GB&C  Entity,  or has  during  the  last  twelve  months
decreased  materially its services,  supplies or materials to any GB&C Entity or
its usage or purchase of the services or products of any GB&C Entity, nor to the
knowledge of the GB&C Entities, does any Customer,  Distributor or Supplier have
any plan or intention to do any of the foregoing.

<PAGE>

         2.24.    Banking Relations.

         All of the  arrangements  which any GB&C  Entity  has with any  banking
institution  are completely  and accurately  described in Schedule 2.24 attached
hereto,  indicating  with  respect  to  each of such  arrangements  the  type of
arrangement maintained (such as checking account,  borrowing arrangements,  safe
deposit box, etc.) and the person or persons authorized in respect thereof.

         2.25.    Powers of Attorney.  

         Except as set forth in Schedule 2.25, no GB&C Entity or Stockholder has
any outstanding power of attorney.

         2.26.  Corporate  Records;  Copies of Documents.

         The  corporate  record  books of each of the GB&C  Entities  accurately
record all corporate action taken by their respective  stockholders and board of
directors and  committees.  The copies of the  corporate  records of each of the
GB&C  Entities,  as made  available  to the  Company  for  review,  are true and
complete  copies of the originals of such  documents.  Each GB&C Entity has made
available  for  inspection  and copying by the Company and its counsel  true and
correct copies of all documents  referred to in this Section or in the Schedules
delivered to the Company pursuant to this Agreement.

         2.27.    Employee Benefit Programs.

                  (a)  Schedule  2.27 lists every  Employee  Program (as defined
below) that has been  maintained  (as  defined  below) by any GB&C Entity at any
time during the three-year period ending on the Closing date.

                  (b) Each Employee  Program  which has ever been  maintained by
any GB&C Entity and which has at any time been intended to qualify under Section
401(a) or  501(c)(9)  of the Code has  received  a  favorable  determination  or
approval  letter  from  the  Internal  Revenue  Service  ("IRS")  regarding  its
qualification  under such  section and has, in fact,  been  qualified  under the
applicable  section of the Code from the effective date of such Employee Program
through and  including  the Closing  (or, if earlier,  the date that all of such
Employee Program's assets were  distributed).  No event or omission has occurred
which would cause any such Employee Program to lose its qualification  under the
applicable Code section.

                   (c) No GB&C  Entity  knows  or has  reason  to  know,  of any
failure of any party to comply with any laws applicable to the Employee Programs
that have been  maintained  by any GB&C  Entity.  With  respect to any  Employee
Program ever  maintained by any GB&C Entity,  there has occurred no  "prohibited
transaction,"  as defined  in  Section  406 of the  Employee  Retirement  Income
Security  Act of 1974,  as amended  ("ERISA")  or Section  4975 of the Code,  or
breach of any duty  under  ERISA or other  applicable  law  (including,  without
limitation,  any  health  care  continuation  requirements  or any other tax law
requirements,  or  conditions  to favorable  tax  treatment,  applicable to such
plan), which could result,  directly or indirectly,  in any taxes,  penalties or
other liability to any GB&C Entity, or the Company. No litigation,  arbitration,
or governmental administrative proceeding (or investigation) or other proceeding
(other  than those  relating  to  routine  claims  for  benefits)  is pending or
threatened with respect to any such Employee Program.

                  (d) No GB&C Entity or any Affiliate (as defined below) (i) has
ever maintained any Employee Program which has been subject to title IV of ERISA
(including,  but not limited to, any  Multiemployer  Plan (as defined below)) or
(ii) has ever  provided  health  care or any other  non-pension  benefits to any
employees after their employment is terminated (other than as required by part 6
of  subtitle  B of  title I of  ERISA)  or has ever  promised  to  provide  such
post-termination benefits.

<PAGE>

                  (e) With respect to each  Employee  Program  maintained by any
GB&C Entity within the three years  preceding the Closing,  complete and correct
copies of the following  documents (if applicable to such Employee Program) have
previously  been  delivered  to the  Company:  (i) all  documents  embodying  or
governing such Employee Program, and any funding medium for the Employee Program
(including, without limitation, trust agreements) as they may have been amended;
(ii) the most recent IRS  determination  or approval letter with respect to such
Employee Program under Code Sections 401 or 501(c)(9),  and any applications for
determination or approval  subsequently filed with the IRS; (iii) the three most
recently filed IRS Forms 5500,  with all applicable  schedules and  accountants'
opinions attached  thereto;  (iv) the summary plan description for such Employee
Program (or other  descriptions of such Employee  Program provided to employees)
and all modifications thereto; (v) any insurance policy (including any fiduciary
liability insurance policy) related to such Employee Program; (vi) any documents
evidencing  any loan to an Employee  Program that is a leveraged  employee stock
ownership plan; and (vii) all other materials  reasonably necessary for Buyer to
perform  any of its  responsibilities  with  respect  to  any  Employee  Program
subsequent  to  the  Closing  (including,   without   limitation,   health  care
continuation requirements).

                  (f)      For purposes of this section:

(i)  "Employee  Program" means (A) all employee benefit plans within the meaning
     of ERISA Section 3(3),  including,  but not limited to,  multiple  employer
     welfare  arrangements  (within the meaning of ERISA Section 3(4)), plans to
     which more than one unaffiliated  employer contributes and employee benefit
     plans (such as foreign or excess  benefit  plans)  which are not subject to
     ERISA;  and (B) all stock option  plans,  bonus or  incentive  award plans,
     severance pay policies or  agreements,  deferred  compensation  agreements,
     supplemental  income  arrangements,  vacation plans, and all other employee
     benefit plans, agreements,  and arrangements not described in (A) above. In
     the case of an Employee Program funded through an organization described in
     Code Section  501(c)(9),  each  reference to such  Employee  Program  shall
     include a reference to such organization.

(ii) An  entity  "maintains"  an  Employee  Program  if  such  entity  sponsors,
     contributes  to, or provides  (or has promised to provide)  benefits  under
     such  Employee  Program,  or has any  obligation  (by  agreement  or  under
     applicable  law) to contribute to or provide  benefits  under such Employee
     Program,  or if such  Employee  Program  provides  benefits to or otherwise
     covers  employees  of  such  entity,  or  their  spouses,   dependents,  or
     beneficiaries.

(iii)An entity is an  "Affiliate"  of a GB&C  Entity if it would  have ever been
     considered  a single  employer  with such GB&C Entity  under ERISA  Section
     4001(b)  or part of the same  "controlled  group" as such GB&C  Entity  for
     purposes of ERISA Section 302(d)(8)(C).

(iv) "Multiemployer Plan" means a (pension or non-pension) employee benefit plan
     to which  more  than  one  employer  contributes  and  which is  maintained
     pursuant to one or more collective bargaining agreements.

         2.28.  List of Directors and Officers. 

         Schedule  2.28 hereto  contains a true and complete list of all current
directors  and officers of each GB&C Entity.  In addition,  Schedule 2.28 hereto
contains a list of all  employees of the GB&C  Entities and the salaries of such
employees as of the date hereof.

         2.29.  Non-Foreign  Status. 

         No Stockholder is a "foreign person" within the meaning of Section 1445
of the Code and Treasury Regulations Section 1.1445-2.

<PAGE>

         2.30.  Transfer of Shares.

         No holder of stock of any GB&C Entity has at any time  transferred  any
of such stock to any employee of any GB&C Entity,  which transfer constituted or
could be viewed as compensation for services rendered to any GB&C Entity by said
employee.

         2.31.  Attributes  Regarding Pooling Accounting.

         The GB&C  Entities are  autonomous  and have never been a subsidiary or
division of another  corporation.  The GB&C Entities have not changed the equity
interest  of its  voting  common  stock  in  contemplation  of  the  transaction
contemplated  by this Agreement to be consummated  pursuant  hereto or any other
business  combination,  including  but not limited to such  changes  effected by
distributions   to  stockholders   and  additional   issuances,   exchanges  and
retirements of securities.  No GB&C Entity has ever reacquired any shares of its
voting  common  stock.  To the best  knowledge  of the GB&C  Entities,  the GB&C
Entities have disclosed to the Company all facts and circumstances regarding the
GB&C Entities and the transactions in which the GB&C Entities have engaged which
could reasonably be expected to adversely effect or preclude  accounting for the
transaction  contemplated  by  this  Agreement  as a  pooling  of  interests  if
consummated at any time from the date hereof through October 15, 1996.

         2.32.  Definition  of the  GB&C  Entities'  Knowledge.  

         As  used  in  this  Agreement,  the  phrases  "to  the  GB&C  Entities'
knowledge" or "to the best of the GB&C Entities' knowledge" (or words of similar
import)  means  the  knowledge  or the  best  knowledge  of any  Stockholder  or
individual  set  forth on  Schedule  2.32,  and  includes  any  fact,  matter or
circumstance which any of such individuals,  as an ordinary and prudent business
person in the same  capacity  with respect to the same type and size of business
as the GB&C Entities, should have known.

         2.33.    Stockholder Personal Guaranties.  

         Set forth on Schedule 2.33 are all personal  guaranties executed by any
Stockholder  with respect to any contract,  lease or other  agreement to which a
GB&C Entity is or was a party.


ARTICLE III.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The  Company  represents  and  warrants  to the GB&C  Entities  and the
Stockholders as follows:

         3.01.  Organization. 

         The Company is a corporation  duly organized,  validly  existing and in
good  standing  under the laws of the State of  Delaware.  The  Company  has the
requisite power and authority and all necessary  governmental  approvals to own,
lease and operate its  properties and to conduct its business as it is currently
conducted,   except  where  the  failure  to  have  such  power,   authority  or
governmental  approval  would  not,  individually  or in the  aggregate,  have a
Material  Adverse  Effect on the  Company.  The  Company  is duly  qualified  or
licensed as a foreign  corporation to do business,  and is in good standing,  in
each  jurisdiction  where  the  character  of the  properties  owned,  leased or
operated  by it or the  nature  of its  business  makes  such  qualification  or
licensing necessary, except for such failures to be so qualified or licensed and
in good  standing  that  would not,  individually  or in the  aggregate,  have a
Material Adverse Effect on the Company.

         3.02.  Certificate  of  Incorporation  and  By-Laws. 

         The Company  has  provided to the GB&C  Entities a true,  complete  and
correct  copy of the  Certificate  of  Incorporation  and the  By-Laws,  each as
amended to date, of the Company. Such Certificate of Incorporation,  By-Laws are
in full force and effect.  The Company is not in violation  of any  provision of
its Certificate of Incorporation or By-Laws.

         3.03.  Capitalization.

         The  authorized  capital  stock of the Company  consists of  30,000,000
shares of common stock,  par value $.01 per share  ("Company  Common Stock") and
1,000,000  shares  of  preferred  stock,  $.01 par  value  per  share  ("Company
Preferred  Stock").  As of the date of this Agreement,  (i) 9,489,235  shares of
Company Common Stock are issued and outstanding,  (ii) 751,778 shares of Company
Common Stock are issuable upon the exercise of outstanding stock options granted
pursuant  to the  Company's  employee  stock  option  plans,  (iii) no shares of
Company Common Stock are held in the treasury of Company, and (iv) 11,912 shares
of Company  Preferred  Stock are issued and  outstanding  and 294,822  shares of
Company  Common  Stock are issuable  upon  conversion  of such  shares,  and (v)
1,047,664  shares of  Company  Common  Stock are  issuable  upon  conversion  of
outstanding   convertible   subordinated  notes  (which  have  been  called  for
redemption on April 4, 1996).

<PAGE>

         3.04.    Authority Relative to this Agreement.  

         Except as set forth on Schedule  3.04,  the  Company has all  necessary
power and  authority  to execute  and  deliver  this  Agreement,  to perform its
obligations  hereunder and to consummate the transactions  contemplated  hereby.
The execution and delivery of this Agreement by the Company and the consummation
by the  Company  of the  transactions  contemplated  hereby  have  been duly and
validly  authorized  by the  Board of  Directors  of the  Company,  and no other
corporate  proceedings  or action on the part of the  Company are  necessary  to
authorize this Agreement or to consummate the transactions  contemplated by this
Agreement.  This  Agreement has been duly and validly  executed and delivered by
the Company and, assuming the due  authorization,  execution and delivery by the
Company, constitutes the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.

         3.05.    Consents and Approvals; No Violations.

                   (a) The Board of Directors  of the Company has approved  this
Agreement.

                  (b) Except as set forth in Schedule  3.05,  the  execution and
delivery of this  Agreement by the Company does not, and the  performance of the
transactions contemplated by this Agreement by the Company will not, require any
filing with or  notification  to, or any  consent,  approval,  authorization  or
permit  from,  any  Governmental  Entity  or any  other  person  except  (i) for
applicable  requirements  of the  Securities  Act,  the  Exchange  Act and state
securities or "blue sky" laws,  or (ii) where  failure to obtain such  consents,
approvals,  authorizations or permits, or to make such filings or notifications,
(A) would not prevent or delay the Company from performing its obligations under
this Agreement in any material respect, or (B) would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.

                  (c) Except as set forth in Schedule  3.05,  the  execution and
delivery of this  Agreement by the Company does not, and the  performance of the
transactions  contemplated  by this  Agreement  by the  Company  will  not,  (i)
conflict  with or violate the  Certificate  of  Incorporation  or By-Laws of the
Company,  (ii) conflict  with or violate any order,  writ,  injunction,  decree,
statute,  treaty, law, rule or regulation  applicable to the Company or by which
any  property or asset of the Company is bound or affected or (iii)  result in a
violation or a breach of, or  constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or result in the loss of
a  benefit  under,  or give to  others  any  right  of  termination,  amendment,
acceleration  or  cancellation  of, or result in the creation of a lien or other
encumbrance on any property or asset of the Company pursuant to, any note, bond,
mortgage,  indenture,  contract, agreement, lease, license, permit, franchise or
other  instrument  or obligation to which the Company is a party or any property
or asset of the  Company is bound or  affected,  except,  in the case of clauses
(ii) and (iii), for any such conflicts,  violations, breaches, defaults or other
occurrences  that (A) would not prevent or delay the Company from performing its
obligations  under  this  Agreement  in any  material  respect or (B) would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.

         3.06.  SEC  Reports. 

                   (a) The  Company has filed all forms,  reports and  documents
required to be filed by it with the SEC since June 30,  1994 and has  heretofore
made available to the GB&C  Entities,  in the form filed with the SEC (excluding
any exhibits  thereto),  (i) its Annual  Report on Form 10-K for the fiscal year
ended July 1, 1995,  (ii) its  Quarterly  Report  for the fiscal  quarter  ended
September  30, 1995,  (iii) its  Quarterly  Report for the fiscal  quarter ended
December 30, 1995,  (iv) its definitive  proxy statement dated as of January 16,
1996,  and (iv) all other  forms,  reports,  registration  statements  and other
documents  filed by the Company with the SEC since December 31, 1995 (the forms,
reports,  registration statements and other documents referred to in clauses (i)
and (ii) above  being  referred to herein,  collectively,  as the  "Company  SEC
Reports").  The  Company  SEC  Reports  and any other  forms,  reports and other
documents filed by the Company with the SEC after the date of this Agreement (i)
were or will be prepared in accordance  with the  requirements of the Securities
Act and the  Exchange  Act,  as the case may be,  and the rules and  regulations
thereunder and (ii) did not at the time they were filed, or will not at the time
they are filed, contain any untrue statement of a material fact or omit to state
a material fact required to be stated  therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
or are made, not misleading.

                  (b) Each of the consolidated  financial statements (including,
in each case,  any notes  thereto)  contained  in the  Company  SEC  Reports was
prepared in accordance with generally accepted accounting  principles applied on
a consistent basis throughout the periods  indicated (except as may be indicated
in the notes  thereto)  and each fairly  presented  the  consolidated  financial
position,  results  of  operations  and  cash  flows  of  the  Company  and  its
consolidated subsidiaries as the case may be, as at the respective dates thereof
and for the  respective  periods  indicated  therein  (subject,  in the  case of
unaudited statements, to normal and recurring year-end adjustments that were not
and are not  expected,  individually  or in the  aggregate,  to be  material  in
amount).

<PAGE>

         3.07.    Absence of Certain Changes.

                   (a) Since  December  31,  1995,  except as  disclosed  in any
Company SEC Report,  there has not been (i) a Company  Material  Adverse Effect,
(ii)  any  declaration,  setting  aside  or  payment  of any  dividend  or other
distribution in respect of any shares of any capital stock of the Company, (iii)
any entry into any  agreement,  commitment or transaction by the Company that is
material to the Company,  except agreements,  commitments or transactions in the
ordinary  course of  business,  (iv) any  change by the  Company  in  accounting
methods,  principles  or  practices,  or (v)  any  damage,  destruction  or loss
(whether or not covered by  insurance)  with respect to any property or asset of
the Company and having,  individually  or in the aggregate,  a Material  Adverse
Effect on the Company.

                   (b) To the best  knowledge  of the  Company,  the Company has
disclosed to the GB&C Entities all facts and circumstances regarding the Company
and the  transactions  it has engaged in which could  reasonably  be expected to
adversely affect or preclude accounting for the transaction contemplated by this
Agreement  as a pooling of interests  if  consummated  at any time from the date
hereof through October 15, 1996. As of the date hereof, to the best knowledge of
the Company based on the facts and circumstances known to it, the Company has no
reason to believe that accounting for the transactions  contemplated hereby as a
pooling of interests  if  consummated  at any time from the date hereof  through
October 15, 1996 would not be available.

         3.08.    Brokers. 

         Except as set forth in Schedule  3.08, no broker,  finder or investment
banker is entitled to any  brokerage,  finder's or other fee or commission  from
the Company in  connection  with the  transactions  contemplated  herein by this
Agreement.

         3.09.    DAKA Common Stock.

         The DAKA Common Stock to be issued hereunder in exchange for the Shares
shall, when issued in accordance with this Agreement,  be validly issued,  fully
paid and non-assessable.

         3.10. Definition of the Company's Knowledge.

         As used in this Agreement, the phrase "to the knowledge of the Company"
or "to the best knowledge of the Company" (or words of similar import) means the
knowledge or the best  knowledge  of those  individuals  identified  in Schedule
3.10,  and  includes  any  fact,  matter  or  circumstance  which  any  of  such
individuals,  as an ordinary and prudent  business  person  employed in the same
capacity  in the same type and size of  business  as the  Company,  should  have
known.

         3.11.  Disclosure. 

         To the best  knowledge of the Company,  all material  facts relating to
the  business,  operations,   properties,  assets,  liabilities  (contingent  or
otherwise)  and  financial  condition of the Company have been  disclosed to the
GB&C  Entities in or in connection  with this  Agreement.  The  representations,
warranties  and  statements  made by the  Company in this  Agreement  and in the
certificates  delivered  pursuant hereto do not contain any untrue  statement of
the material fact, and, when taken  together,  do not omit to state any material
fact necessary to make such representations, warranties and statements, in light
of the circumstances under which they are made, not misleading.

         3.12.    No Investment Company.

         The  Company  is not an  "investment  company"  within  the  meaning of
Sections 368(a)(2)(F)(iii) and (iv) of the Code.

         3.13.    Tax Representations.

                   (a) The  Company has no present  plan or intent to  reacquire
any of its stock issued in connection with the transactions contemplated hereby;

                   (b) The Company has no present plan or intent to cause any of
the GB&C Entities to issue  additional  shares of stock that would result in the
Company losing  "control"  (within the meaning of Section 368(c) of the Code) of
any of the GB&C Entities.

                   (c) It is the present  intent of the Company to cause each of
the GB&C  Entities (or the Company or a  subsidiary  of the Company in the event
that the  Company or such  subsidiary  acquires  the assets of such GB&C  Entity
pursuant to a transfer  described in clause (ii) or (iii) of Section 3.13(e)) to
continue the historic business of such GB&C Entity or use a significant  portion
of the historic business assets of such GB&C Entity in a business.


                                                       

<PAGE>

                   (d) The  Company  has no  present  plan or  intent to sell or
otherwise  dispose of the stock of any of the GB&C Entities except for transfers
of stock to corporations  "controlled"  (within the meaning of Section 368(c) of
the Code) by the Company or  dispositions by merger into the Company or into any
direct wholly owned subsidiary of the Company or by liquidation.

                   (e) The Company has no present plan or intent to cause any of
the GB&C Entities to sell or otherwise dispose of any of their assets except for
(i)  dispositions  made in the  ordinary  course  of  business,  (ii)  transfers
described in Section  368(a)(2)(C) of the Code, or (iii)  dispositions by merger
into the Company or into any direct wholly owned subsidiary of the Company or by
liquidation.

ARTICLE IV  COVENANTS OF THE GB&C ENTITIES AND THE STOCKHOLDERS

         4.01. Conduct of Respective Businesses of the GB&C Entities Pending the
Transactions Contemplated Hereby.

         Each of the  Stockholders  and the GB&C  Entities  covenants and agrees
that between the date of this  Agreement and the Closing Date, the GB&C Entities
shall and the  Stockholders  shall  cause  each GB&C  Entity to (i) carry on its
respective businesses in the usual, regular and ordinary course, consistent with
past  practice,  (ii) use its  reasonable  best  efforts to preserve  intact its
present  business  organizations,  keep  available  the  services of its present
officers  and  employees,  (iii)  keep in  effect  casualty,  public  liability,
worker's  compensation and other insurance policies in coverage amounts not less
than those in effect as of the date of this Agreement, (iv) preserve and protect
the rights of each GB&C Entity in  Intellectual  Property (as defined by Section
2.12 hereof),  and (v) use its best efforts to preserve its  relationships  with
customers, franchisees, suppliers, licensors and other persons with which it has
significant business dealings. Without limiting the generality of the foregoing,
between the date of this  Agreement  and the  Effective  Time,  each GB&C Entity
shall not, and the  Stockholders  shall  prevent  each GB&C Entity from,  doing,
proposing  or  agreeing,  directly  or  indirectly,  to do any of the  following
without the prior written consent of the Company:

                  (a) (i)  Declare,  set aside or pay any  dividend  or make any
other  distribution  (whether in cash,  stock,  or  property or any  combination
thereof) in respect of any of its capital stock, as the case may be, (ii) split,
combine,  reclassify or subdivide any of its capital stock or (iii)  repurchase,
redeem or otherwise acquire any of its capital stock;

                  (b) Authorize for issuance,  issue,  sell, deliver or agree or
commit to issue,  sell or deliver  (whether  through the issuance or granting of
options, warrants, commitments,  subscriptions, rights to purchase or otherwise)
(collectively, "Issue") any shares of stock of any class or any other securities
(including  indebtedness  having  the  right  to  vote)  or  equity  equivalents
(including, without limitation, phantom stock or stock appreciation rights);

                   (c) Acquire or encumber or sell,  lease,  transfer or dispose
of any assets other than in the ordinary course of business;

                   (d) Incur any  long-term  indebtedness  for  borrowed  money,
guarantee any indebtedness,  issue or sell debt securities or warrants or rights
to  acquire  any debt  securities,  guarantee  (or  otherwise  become  liable or
potentially liable for) any debt of others, make any loans,  advances or capital
contributions;  mortgage,  pledge or otherwise  encumber any material assets; or
create or suffer any material lien thereupon  other than in the ordinary  course
of business consistent with prior practice or incur any short-term  indebtedness
for borrowed money except for credit facilities in existence on the date hereof;

                  (e) Pay,  discharge  or satisfy  any  claims,  liabilities  or
obligations   (absolute,   accrued,   asserted  or  unasserted,   contingent  or
otherwise),  other  than  any  payment,  discharge  or  satisfaction  (i) in the
ordinary  course of business  consistent  with past  practice of trade  payables
other than promissory  notes or other  liabilities set forth in section (xii) of
Schedule 2.13, (ii) on account of mandatory  scheduled  payments with respect to
the promissory  notes set forth in section (xii)  (promissory  notes) other than
promissory  notes  also set  forth in  Schedule  2.18 or (iii)  consented  to in
writing by the Company;

<PAGE>

                   (f) Change any of the accounting principles or practices used
by it (except as required by generally accepted accounting principles);

                  (g) Make any change in the  compensation  payable or to become
payable to any  officers,  employees  or agents of any GB&C  Entity or grant any
severance  or  termination  pay to,  or  enter  into or  amend  any  employment,
severance or other  agreement or arrangement  with, any of its or any other GB&C
Entity's directors,  officers or other employees,  or establish,  adopt or enter
into  or  amend  any   collective   bargaining,   bonus,   incentive,   deferred
compensation,  profit  sharing,  stock option or purchase,  insurance,  pension,
retirement or other employee benefit plan;

                   (h) Amend or otherwise change such GB&C Entity's  Certificate
of Incorporation or By-Laws;

                  (i)  Enter  into  a  new  agreement,  contract  or  commitment
involving  payment to or by the Company of $10,000 or more or amend any existing
agreement that could reasonably be expected to have a Material Adverse Effect on
any GB&C Entity;

                   (j)  Enter  into  or  modify  or  amend  any  lease,  license
agreement, franchise agreement or development agreement;

                  (k) Knowingly  engage in any  transaction or cause any fact or
circumstance  to occur  which  would  preclude  accounting  for the  transaction
contemplated by this Agreement as a pooling of interests.

         4.02.    Sale of Shares; Acquisition Proposals. 

         Unless and until this  Agreement is terminated  in accordance  with its
term for any reason,  no  Stockholder  shall  directly or  indirectly  exchange,
deliver, assign, pledge, encumber or otherwise transfer or dispose of any Shares
(including  options in respect thereof) owned beneficially and of record by such
Stockholder, nor shall any Stockholder directly or indirectly grant any right of
any kind to acquire,  dispose of,  vote or  otherwise  control in any manner any
Shares.  Unless and until this  Agreement is terminated  in accordance  with its
terms,  neither any GB&C Entity, nor any Stockholder nor any director,  officer,
employee or agent of any GB&C Entity shall, directly or indirectly, (a) take any
action to solicit,  initiate submission of or encourage proposals or offers from
any person  relating to any acquisition or purchase of all or any portion of the
Shares or all or (other than in the ordinary course of business  consistent with
past practice) any portion of any assets of, or any equity  interest in any GB&C
Entity,  any merger or business  combination with any GB&C Entity,  or any other
acquisition,   transaction   or  financing  or  joint  venture   involving  such
Stockholder or any GB&C Entity (an "Acquisition  Proposal"),  (b) participate in
any negotiations  regarding any Acquisition  Proposal with any person other than
the Company and its affiliates and representatives,  (c) furnish any information
with  respect to or afford  access to the  properties,  books or records of such
Stockholder or any GB&C Entity to any person who may consider making or has made
an offer with respect to an Acquisition  Proposal other than the Company and its
affiliates and  representatives,  or (d) otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage,  any effort or attempt by any
person other than the Company and its  affiliates and  representatives  to do or
seek any of the foregoing.  The  Stockholders  shall promptly notify the Company
upon receipt of any offer or indication that any person is considering making an
offer with  respect to an  Acquisition  Proposal or any request for  information
relative to any GB&C  Entity,  and will keep the Company  fully  informed of the
status and details of any such offer, indication or request.

<PAGE>

         4.03.  Breach of  Representations  and  Warranties. 

         Promptly  upon any  Stockholder  becoming  aware of any breach,  or the
impending or threatened  occurrence of any event which would cause or constitute
a breach,  or would have caused or  constituted a breach had such event occurred
or been  known  prior  to the date  hereof,  of any of the  representations  and
warranties of the Stockholders contained in or referred to in this Agreement and
made as of the date hereof,  the Stockholders shall give detailed written notice
thereof to the Company  and shall use their best  efforts to prevent or promptly
remedy the same.

         4.04.  Confidentiality.

         In the course of the  Stockholders'  involvement  with GB&C Entities as
stockholders or employees or otherwise,  the Stockholders have had, and may from
time to time after the date hereof have, access to confidential  records,  data,
trade  secrets  and  similar  confidential  information  owned or used by a GB&C
Entity  in  the  course  of  its  business  (the  "Confidential   Information").
Accordingly, each Stockholder agrees (a) to hold the Confidential Information in
strict confidence,  (b) not to disclose Confidential  Information to any person,
and (c) not to use, directly or indirectly,  any of the Confidential Information
for  any  competitive  or  commercial  purpose;  provided,   however,  that  the
limitations  set forth  above  shall not apply to any  Confidential  Information
which (i) is then generally known to the public other than by reason of a breach
of this Section  4.04;  or (ii) is disclosed  in  accordance  with an order of a
court of competent  jurisdiction or applicable law. Upon request by the Company,
all data, memoranda, customer lists, notes, programs and other papers and items,
and  reproductions  thereof relating to the foregoing matters in a Stockholder's
possession or control shall be returned to the Company or a GB&C Entity.
                                                   
         4.05. Further Action;  Reasonable Best Efforts.
 
                   (a) Upon the terms and subject to the conditions hereof, each
of the GB&C Entities and the Stockholders  shall use its reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations  to  consummate  and make  effective the  transactions  contemplated
herein  including,  without  limitation,  using its  reasonable  best efforts to
obtain   all   licenses,   permits,   consents,    approvals,    authorizations,
qualifications and orders of any governmental or regulatory authority,  domestic
or foreign (a "Governmental Entity"), and all parties to contracts with any GB&C
Entity  or  any  Stockholder  as  are  necessary  for  the  consummation  of the
transactions contemplated herein. In case at any time after the Closing Date any
further  action is  necessary  or  desirable  to carry out the  purposes of this
Agreement,  the  proper  officers  and  directors  of each GB&C  Entity and each
Stockholder  shall use their  reasonable  best  efforts to take all such action.
Each such party shall  promptly  consult with the other with respect to, provide
any necessary information with respect to and provide the other (or its counsel)
with copies of, (i) all filings made by such party with any Governmental  Entity
or any other person in connection  with the execution of this  Agreement and the
consummation of the transactions  contemplated hereby and (ii) all other written
materials  submitted  or prepared  by any such party  concerning  obtaining  all
licenses,  permits,  consents,  approvals,  authorizations  and orders  that are
required to be obtained in connection  with the execution of this  Agreement and
the consummation of the transactions contemplated by this Agreement.

                  (b) Each GB&C Entity and each  Stockholder  shall use its best
efforts to cause all  conditions to Closing herein to be satisfied and shall not
take any  action,  or enter into any  transaction,  that would  cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement.

         4.06.  Access.  

         The GB&C Entities and the Stockholders shall permit the Company and its
authorized   representatives   (including   without   limitation  the  Company's
attorneys,  accountants,   financial  advisors  and  pension  and  environmental
consultants)  to have  full  access  to all of the  properties,  assets,  books,
records,  business  files,  executive  personnel,  tax  returns,  contracts  and
documents  of the GB&C  Entities  and furnish to the Company and its  authorized
representatives  such  financial  and other  information  with  respect  to such
business or properties as the Company may from time to time reasonably request.

         4.07.   Financial   Information. 

         Each GB&C  Entity  shall,  and the  Stockholders  shall cause each GB&C
Entity to: (i) provide such financial and other information and documents as the
Company may reasonably  request in connection with any filings to be made by the
Company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934,  as  amended,  (ii) use its best  efforts to cause its  independent
public  accountants,  to deliver such consents,  reports and comfort  letters in
connection  therewith as the Company may reasonably  request,  provided that all
such  consents,  reports  and  comfort  letters  shall be at the  expense of the
Company,  (iii) generally cooperate with the Company and its representatives and
agents in  connection  therewith,  (iv) provide  monthly  financial  statements,
including a balance sheet as of month-end  and a monthly  income  statement,  as
soon as practicable  but not later than 30 days after the last day of each month
and quarterly financial  statements  (unaudited) and annual financial statements
(audited)  meeting the  requirements set forth in Section 2.07 hereof as soon as
practicable  but not later  than 45 days  after the last day of each  quarter or
fiscal  year,  as  applicable,  and (v) make such  representations  relating  to
accounting for the transactions contemplated hereby as a pooling of interests as
may be required by Deloitte & Touche  LLP,  which  representations  shall be set
forth in Schedule 4.07.

<PAGE>

         4.08.  General  Release. 

         Each Stockholder  agrees to deliver at the Closing a general release in
the form of  Exhibit  4.08  attached  hereto  releasing  all  claims  which such
Stockholder  has or may have through the Closing Date other than such claims and
rights  referred to in such general  release which shall survive the Closing and
remain in effect (including rights arising under this Agreement).

         4.09.  Affiliates of the GB&C  Entities.  

         On or before the Closing Date (a) the GB&C  Entities  shall  deliver to
the Company a letter identifying all persons who may be deemed affiliates of the
GB&C Entities  under Rule 145 of the  Securities  Act ("Rule  145"),  including,
without  limitation,  all directors and executive  officers of the GB&C Entities
and (b) the GB&C Entities shall advise the persons  identified in such letter of
the resale restrictions imposed by applicable securities laws. The GB&C Entities
shall use their best  efforts to obtain as soon as  practicable  from any person
who may be deemed to have become an  affiliate  of the GB&C  Entities  after the
GB&C  Affiliates'  delivery  of the  letter  referred  to above and prior to the
Closing Date, a written agreement substantially in the form of Exhibit 4.09.


ARTICLE V.  COVENANTS OF THE COMPANY.

         5.01. Consents and Approvals.

         The Company  will use its best  efforts to obtain  prior to the Closing
all necessary consents and approvals to the performance of its obligations under
this  Agreement,  including,  without  limitation,  the consents  and  approvals
described in Schedule 3.05 attached  hereto,  and will cooperate in all respects
with the GB&C Entities and the Stockholders  with a view toward obtaining timely
satisfaction  of conditions  to the Closing set forth  herein.  The Company will
keep the GB&C  Entities  and the  Stockholders  informed  of the  status  of any
inquiries  made of the  Company by any  governmental  agency as  authority  with
respect to this Agreement or the transactions contemplated hereby.

         5.02.  Confidentiality.

         From the date of this Agreement  until the Closing,  or for a period of
five years from the date of this  Agreement  if the Closing  does not take place
for any reason, all confidential  business and related information  furnished to
the Company and its affiliates and  representatives by either a GB&C Entity or a
Stockholder  shall be kept  confidential  by the Company and its  affiliates and
representatives; provided, however, that the foregoing shall be inapplicable (a)
with  respect to  information  which (i) is or becomes  available  to the public
without  breach  of this  confidentiality  obligation,  or  (ii)  is or  becomes
available to the Company from a third party,  provided  that the third party did
not  receive  the  same,  directly  or  indirectly,  from  a  GB&C  Entity  or a
Stockholder and was not under an obligation of  confidentiality to the source of
such information at the time it was disclosed to the Company,  (b) in connection
with filings  contemplated by this Agreement and (c) to the extent disclosure is
required by any applicable law or regulation,  by any authorized  administrative
or  governmental  agency  or, in the  opinion  of  counsel  to the  Company,  in
connection  with  any  proposed  public  offering  of the  Company's  securities
pursuant to applicable requirements of the securities laws or any stock exchange
or  self-regulatory  organization;  provided,  however,  that the  Company  will
provide notice to the GB&C Entities and the Stockholders  before  disclosing any
information  pursuant  to this  Section  5.02 and will  cooperate  with the GB&C
Entities  and  the  Stockholders  on  endeavoring  to  preserve,  to the  extent
reasonably   practicable  and  not  inconsistent   with  its  legal  obligations
(including  the  obligation  to make timely,  full and accurate  disclosure in a
prospectus or securities filings or reports),  the confidential  nature thereof.
The Stockholder acknowledges and agrees that a copy of this Agreement,  together
with exhibits and schedules  hereto may be filed by the Company as an exhibit to
a Registration Statement filed by the Company under the Securities Act, and that
financial  information  derived from or contained  in the  financial  statements
included in Schedule 2.07 will be set forth in the  prospectus  included as part
of such Registration Statement.


<PAGE>

ARTICLE VI.  CONDITIONS.

         6.01.  Conditions to the Obligations of the Company. 

         The   obligation  of  the  Company  to  consummate   the   transactions
contemplated  by this Agreement are subject to the  fulfillment,  prior to or at
the Closing, of the following additional conditions precedent:

                  (a)  Representations;   Warranties;  Covenants.  Each  of  the
representations  and warranties of the GB&C Entities and the  Stockholders  made
pursuant to this Agreement shall be true and correct in all material respects on
and as of the Closing Date, with the same effect as though made on and as of the
Closing Date;  the GB&C Entities and the  Stockholders  shall,  on or before the
Closing Date, have performed and satisfied all of their covenants and agreements
set forth herein,  which by the terms hereof,  are to be performed and satisfied
on or before the Closing Date; and the GB&C Entities and the Stockholders  shall
have  delivered  to the Company  certificates  executed  as of the Closing  Date
certifying to the foregoing effect.

                  (b)  Opinion of Counsel  and Other  Documents.  On the Closing
Date,  the  Company  shall have  received  (i)  opinions of counsel for the GB&C
Entities and the Stockholders  dated as of the Closing Date and addressed to the
Company,  substantially in the form attached as Exhibit 6.01(b) hereto, and (ii)
such other  certificates  and  documents  with  respect to the  Stockholders  as
counsel  for the  Company  shall  have  reasonably  requested  at least  two (2)
business days prior to the Closing Date.

                   (c) No Actions or Proceedings.  No action or proceeding by or
before any court,  administrative  body or  governmental  agency shall have been
instituted or  threatened by or on behalf of any GB&C Entity or any  Stockholder
or which seeks to enjoin, restrain or prohibit, or might result in money damages
to any party hereto in respect of, this  Agreement or the complete  consummation
of the transactions  contemplated by this Agreement, or which otherwise would in
the reasonable  judgment of the Company make it  inadvisable to consummate  such
transactions.  No law or regulation  shall be in effect and no court order shall
have been  entered in any action or  proceeding  instituted  by any party  which
enjoins,  restrains or prohibits this Agreement or the complete  consummation of
the transactions contemplated by this Agreement.

                  (d) Company  Approvals  and  Consents.  The Company shall have
made all filings with and notifications of governmental authorities,  regulatory
agencies and other  entities  required to be made by it in  connection  with the
execution  and  delivery  of this  Agreement  and the  performance  by it of the
transactions  contemplated  hereby; the Company shall have received all required
authorizations,  waivers,  consents  and permits  required to be received by the
Company to permit the  consummation  of the  transactions  contemplated  by this
Agreement,  in form and substance reasonably  satisfactory to the Company,  from
all third parties.

                  (e) Deliveries.  The GB&C Entities and the Stockholders  shall
have  delivered or entered into the documents and  instruments  contemplated  by
this Agreement,  in each case, in form and substance satisfactory to the Company
and its counsel.

                  (f) GB&C Entities  Approvals  and Consents.  The GB&C Entities
shall have made all filings with and notifications of governmental  authorities,
regulatory agencies and other entities,  if any, required to be made by the GB&C
Entities in connection  with the execution and delivery of this  Agreement,  the
performance of the transactions  contemplated hereby and the continued operation
of the business of the GB&C Entities  subsequent  to the Closing Date.  The GB&C
Entities and the Stockholders  shall have received all required  authorizations,
waivers,  consents and permits to permit the  consummation  of the  transactions
contemplated   by  this  Agreement,   in  the  form  and  substance   reasonably
satisfactory  to the  Company,  with any  conditions  or  limitations  contained
therein or imposed  thereby  subject to the  approval of the  Company,  from (i)
lessors of stores operated by the GB&C Entities rather than franchisees and (ii)
other third parties,  including,  without  limitation,  applicable  governmental
authorities,  regulatory  agencies,  lenders and contract  parties,  required in
connection  with  transactions  contemplated  by this  Agreement  or by any GB&C
Entity's permits,  leases, licenses and franchises,  to avoid a breach, default,
termination,   acceleration  or   modification   of  any  agreement,   contract,
instrument,  mortgage,  lien,  permit,  authorization,  order,  writ,  judgment,
injunction,  decree,  determination  or  arbitration  award as a  result  of the
execution or performance of this Agreement,  or otherwise in connection with the
execution and performance of this Agreement.

<PAGE>

                  (g) Material Adverse Changes.  There shall not have been since
the date of this  Agreement,  any  change  or  series of  changes  that,  in the
reasonable business judgment of the Company, acting in good faith, have or could
reasonably be anticipated to have a Material Adverse Effect on any GB&C Entity.

                   (h) Proceedings  Satisfactory to the Company. All proceedings
to be taken by the GB&C Entities and the  Stockholders  in  connection  with the
consummation of the Closing and the other transactions  contemplated  hereby and
all certificates,  opinions,  instruments and other documents required to effect
the transaction  contemplated hereby reasonably requested by the Company will be
reasonably  satisfactory  in the  form  and  substance  to the  Company  and its
counsel.

                  (i) The Company  shall have received  confirmation  in writing
from  Salomon  Brothers  that the  amounts  owed them will not exceed the amount
disclosed in Schedule 2.17.

                  (j) The Company  shall have  received from Fred R. Olivier and
Maria Olivier a general release in the form of Exhibit 4.08 hereto.

                  (k) The Company  shall have  received in writing  from Snell &
Wilmer L.L.P.  an  acknowledgment  that fees due them in  connection  with their
representation of the GB&C Entities will not exceed $17,500.

         6.02.   Conditions  to  the  Obligations  of  the   Stockholders. 

         The  obligations of the  Stockholders  to consummate  the  transactions
contemplated by this Agreement are subject to the fulfillment of, prior to or at
the Closing, the following additional conditions precedent:

                  (a)  Representations;   Warranties;  Covenants.  Each  of  the
representations  and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date, with
the same effect as though made on and as of the Closing Date; the Company shall,
on or before the Closing Date, have performed and satisfied all of its covenants
and  agreements  set forth  herein which by the terms hereof are to be performed
and  satisfied  by the  Company on or before the Closing  Date;  and the Company
shall have  delivered to the  Stockholders  a certificate as of the Closing Date
certifying to the foregoing effect.

                  (b)  Opinion of Counsel  and Other  Documents.  On the Closing
Date, the GB&C Entities and the Stockholders  shall have received (i) an opinion
of counsel for the Company,  dated as of the Closing  Date and  addressed to the
GB&C  Entities  and the  Stockholders,  substantially  in the form  attached  as
Exhibit  6.02(b)(i)  hereto and (ii) such other  certificates  and  documents as
counsel to the Stockholders shall have reasonably  requested from the Company at
least two (2) business days prior to the Closing Date.

                  (c) No Actions or  Proceedings.  No action or proceeding by or
before any court,  administrative  body or  governmental  agency shall have been
instituted or threatened which seeks to enjoin,  restrain or prohibit,  or might
result in damages in respect of, this Agreement or the complete  consummation of
the  transactions as contemplated by this Agreement.  No law or regulation shall
be in effect  and no court  order  shall  have  been  entered  in any  action or
proceeding  instituted by any party which  enjoins,  restrains or prohibits this
Agreement or the complete  consummation  of the  transactions as contemplated by
this Agreement.
                                                     

<PAGE>

ARTICLE VII.  TERMINATION OF AGREEMENT.

         7.01.    Termination. 

         This  Agreement may be terminated any time prior to the Closing Date as
follows:

                   (a)  With  the  mutual   consent  of  the   Company  and  the
Stockholders owning a majority of the Shares.

                   (b) By  either  the  Company  or the  Stockholders  owning  a
majority of the Shares,  if the Closing has not  occurred on or before April 30,
1996.

                  (c)  By  the   Company,   if  there   has   been  a   material
misrepresentation  or  breach  of  warranty  on the part of any GB&C  Entity  or
Stockholder in the representations and warranties contained herein or a material
breach of covenants on the part of any GB&C Entity or  Stockholder  and the same
has not been cured  within 10 days  after  notice  thereof.  In the event of any
termination  pursuant to this Section 7.01(c),  written notice setting forth the
reasons  therefor  shall  forthwith be given by the Company to the GB&C Entities
and the Stockholders.

                  (d) By Stockholders  owning a majority of the Shares, if there
has been a material  misrepresentation  or breach of warranty on the part of the
Company in the  representations  and warranties  contained  herein or a material
breach of  covenants  on the part of the Company and the same has not been cured
within 10 days after notice thereof. In the event of any termination pursuant to
this Section  7.01(d),  written notice setting forth the reasons  therefor shall
forthwith be given by the Stockholders to the Company.

         Notwithstanding anything herein to the contrary, the right to terminate
this  Agreement  under this  Section 7.01 shall not be available to any party to
the  extent the  failure  of such  party,  respectively,  to fulfill  any of its
obligations  under this  Agreement  has been the cause of, or  resulted  in, the
failure  of the  Closing  to occur on or  before  such  date (as a  result,  for
example,  of an action or  failure  to act  causing  a  failure  of a  condition
precedent).

         7.02.  Effect of Termination.

         All  obligations  of  the  parties   hereunder  shall  cease  upon  any
termination pursuant to Section 7.01; provided, however, that (i) the provisions
of this Article VII and of Sections 5.02 and 11.09 shall survive any termination
of this  Agreement;  (ii)  nothing  herein  shall  relieve  any  party  from any
liability  for a material  error or  omission in any of its  representations  or
warranties  contained  herein or a material  failure  to comply  with any of its
covenants,  conditions or agreements  contained herein;  and (iii) any party may
proceed as further set forth in Section 7.03 below.

         7.03.  Right to Proceed.

         Anything in this Agreement to the contrary  notwithstanding,  if any of
the  conditions  specified in Section 6.01 hereof have not been  satisfied,  the
Company  shall  have the right to  proceed  with the  transactions  contemplated
hereby without waiving any of its rights hereunder, and if any of the conditions
specified in Section 6.02 hereof have not been satisfied, the Stockholders, by a
decision of the  Stockholders  owning a majority  of the Shares,  shall have the
right to proceed with the transactions  contemplated  hereby without waiving any
of their rights hereunder.


ARTICLE VIII.  SURVIVAL; INDEMNIFICATION

         8.01.    Survival   of    Representations,    Warranties,    Etc.

         All representations,  warranties, agreements, covenants and obligations
herein or in any schedule or certificate  delivered by any party incident to the
transactions  contemplated  hereby are  material  and may be relied  upon by the
party  receiving  the same and  shall  survive  the  Closing  regardless  of any
investigation  by or  knowledge  of such  party and  shall  not  merge  into the
performance of any obligation by any party hereto,  subject to the provisions of
this Article VIII.

         8.02. Indemnification by the Stockholders.  

         The  Stockholders,   on  behalf  of  themselves  and  their  respective
successors,  executors,  administrators,  estates,  heirs and permitted assigns,
jointly and  severally,  agree  subsequent  to the Closing Date to indemnify and
hold harmless the Company,  its  affiliates and their  respective  shareholders,
officers, directors,  employees and agents (individually, a "Company Indemnified
Party" and collectively, the "Company Indemnified Parties") from and against and
in respect  of all  losses,  liabilities,  obligations,  damages,  deficiencies,
actions, suits, proceedings,  demands,  assessments,  orders, judgments,  fines,
penalties,  costs and expenses (including the reasonable fees, disbursements and
expenses  of  attorneys,  accountants  and  consultants)  of any kind or  nature
whatsoever  (whether or not arising out of third-party  claims and including all
amounts  paid  in  investigation,   defense  or  settlement  of  the  foregoing)
sustained, suffered or incurred by or made against any Company Indemnified Party
(a "Loss" or "Losses") arising out of, based upon or in connection with:

<PAGE>

                  (a) conditions,  circumstances or occurrences which constitute
or  result in any  breach of any  representation  or  warranty  made by either a
Stockholder  or a GB&C Entity in this  Agreement  or in any  schedule,  exhibit,
certificate,  financial statement, agreement or other instrument delivered under
or in connection with this Agreement (collectively,  "Stockholder Representation
and Warranty Claims");

                  (b) any breach of any covenant or  agreement  made by either a
Stockholder  or a GB&C Entity in this  Agreement  or in any  Schedule,  exhibit,
certificate,  financial statement, agreement or other instrument delivered under
or in  connection  with this  Agreement,  or by reason of any  claim,  action or
proceeding  asserted or instituted arising out of any matter or thing covered by
any such covenant or agreement;

                  (c) any fees and expenses  (including without limitation legal
fees  and  accounting  fees)  relating  to this  Agreement  or any  transactions
contemplated hereby paid, assumed or otherwise borne by any GB&C Entity.

          Claims under clauses (a) through (c) of this Section 8.02  hereinafter
collectively referred to as "Company Indemnifiable Claims".

                                               
         The rights of Company Indemnified Parties to recover indemnification in
respect of any  occurrence  referred to in clauses  (b) and (c) of this  Section
8.02 shall not be limited by the fact that such occurrence may not constitute an
inaccuracy in or breach of any  representation or warranty referred to in clause
(a) of this Section 8.02.

         8.03.    Limitations on Indemnification by Stockholders.

                  (a) General Threshold.  Subject to the exceptions set forth in
Section 8.03(d),  the Stockholders  shall not be obligated to indemnify  Company
Indemnified Parties in respect of Stockholder Representation and Warranty Claims
except to the extent the cumulative amount of all Stockholder Representation and
Warranty  Claims  exceeds  fifty  thousand   Dollars   ($50,000)  (the  "Company
Threshold"),  whereupon the full amount of such losses shall be  recoverable  in
accordance with the terms hereof.

                   (b)   General   Maximum   Indemnification.   Subject  to  the
exceptions set forth in Section 8.03(d),  neither Stockholder shall be obligated
to   indemnify   Company   Indemnified   Parties  in   respect  of   Stockholder
Representation and Warranty Claims that exceed $7,871,736.

                  (c) Time  Limits for  Claims.  Subject to the  exceptions  set
forth in  Section  8.03(d),  no  claim  for  indemnification  may be made by any
Company Indemnified Party in respect of Stockholder  Representation and Warranty
Claims unless the written  notice  required by Section 8.06 with respect to such
Losses shall have been  received by the  Stockholders  on a date prior to the 18
month anniversary of the Closing; provided, however, that the limitation of this
clause (c) shall not apply to Company  Indemnifiable Losses described in Section
8.03(d), indemnification with respect to which shall expire six (6) months after
the termination of the applicable statute of limitations relating to the subject
matter covered by such Section; and provided further, however, that in each case
if prior to the  applicable  date of expiration a specific  state of facts shall
have become known which may constitute or give rise to any Company Indemnifiable
Loss as to which indemnity may be payable and a Company  Indemnified Party shall
have  given  notice  of such  facts  to the  Stockholders,  then  the  right  to
indemnification  with respect  thereto  shall remain in effect until such matter
shall have been finally determined and disposed of, and any  indemnification due
in respect  thereof shall have been paid,  according to the date on which notice
of the applicable claim is given.

                  (d) Dollar-for-Dollar Claims.  Notwithstanding anything herein
to the  contrary,  Company  Indemnified  Parties  shall  not be  subject  to any
limitation,  whether  pursuant to this Section 8.03 or  otherwise,  and shall be
entitled to dollar-for-dollar  recovery, in seeking  indemnification from either
Stockholder with respect to the following:

<PAGE>

(i)  Losses arising from fraud or an intentional  misrepresentation  on the part
     of either Stockholder;

(ii) Losses arising from breach of a covenant by a GB&C Entity or a Stockholder;
                                           
(iii)Except as  otherwise  provided in any  schedule to this  Agreement,  losses
     involving a breach by a Stockholder of the  representations  and warranties
     contained in Sections 2.02, 2.03 (except 2.03(a)(ii)),  2.04, 2.08(a), (b),
     (c) and (d), 2.11(g) or 2.17; and

(iv) Losses described in Section 8.02(c).

         Indemnification  pursuant to this Section  8.03(d) shall not be counted
against the maximum amount set forth in Section 8.03(b).

                  (e) No Limitation of Rights.  Notwithstanding  anything herein
to the contrary, the limitations set forth in this Section 8.03 shall apply only
with respect to  post-Closing  indemnification  obligations  and shall in no way
limit any rights the Company may have in law or equity, in the event the Closing
does not occur.

         8.04.  Indemnification by the Company.

         The Company agrees subsequent to the Closing Date to indemnify and hold
harmless  the  Stockholders  from  and  against  and in  respect  of all  Losses
sustained,  suffered or incurred by or made  against any of them arising out of,
based upon or in connection  with (a) conditions,  circumstances  or occurrences
which constitute or result in any breach of any  representation or warranty made
by the  Company in this  Agreement  or in any  Schedule,  exhibit,  certificate,
financial  statement,  agreement  or  other  instrument  delivered  under  or in
connection with this Agreement,  or by reason of any claim, action or proceeding
asserted or  instituted  arising out of any matter or thing  covered by any such
representations  or warranties  (collectively,  "Stockholder  Representation and
Warranty  Claims");  and (b) any breach of any covenant or agreement made by the
Company in this Agreement or in any Schedule,  exhibit,  certificate,  financial
statement,  agreement or other instrument  delivered under or in connection with
this  Agreement,  or by reason of any claim,  action or  proceeding  asserted or
instituted  arising out of any matter or thing  covered by any such  covenant or
agreement (such claims under clauses (a) and (b) being hereinafter  collectively
referred to as "Stockholder Indemnifiable Claims").

         8.05.    Limitations on Indemnification by the Company.

                   (a) The right of any  Stockholders to  indemnification  under
Section 8.04 shall be subject to the following provisions:

(i)  Indemnification  with respect to  Stockholder  Representation  and Warranty
     Claims shall expire on the eighteen (18) month  anniversary of the Closing;
     provided,  however,  that the limitation of this clause (i) shall not apply
     to Stockholder  Representation  and Warranty Claims based on any inaccuracy
     in or breach of Section  3.04,  which shall expire with respect to any such
     Section six (6) months after the  termination of the applicable  statute of
     limitations  relating to the subject  matter  covered by such Section;  and
     provided, further, that if prior to the above date of expiration a specific
     state of facts shall have become known which may constitute or give rise to
     any Stockholder Representation and Warranty Claim as to which indemnity may
     be payable and the  Stockholders  shall have given  notice of such facts to
     the Company,  then the right to indemnification  with respect thereto shall
     remain in effect without regard to when such matter shall have been finally
     determined  and disposed  of,  according to the date on which notice of the
     applicable  claim  is  given.  The  limitations   herein  with  respect  to
     Stockholder  Representation  and Warranty Claims shall not limit the rights
     of Stockholder with respect to any other claims.

(ii) No   indemnification   shall  be  payable  with   respect  to   Stockholder
     Representation and Warranty Claims except to the extent that the cumulative
     amount of all Stockholder  Representation  and Warranty Claims shall exceed
     $50,000,  whereupon the full amount of such claims shall be  recoverable in
     accordance with the terms hereof.

                  (b)  Notwithstanding  anything  herein  to the  contrary,  the
Stockholders  shall not be subject to  limitation,  whether  pursuant to Section
8.05(a)  hereof or  otherwise,  in seeking  indemnification  with respect to any
Stockholder   Indemnifiable   Claim  (i)  involving   fraud  or  an  intentional
misrepresentation by the Company,  (ii) arising from breach of a covenant by the
Company or (iii)  involving a breach by the Company of the  representations  and
warranties contained in Section 3.04 and 3.09.

                  (c)  Notwithstanding  anything  herein  to the  contrary,  the
limitations  set forth in this  Section  8.05 shall  apply only with  respect to
post-Closing  indemnification  obligations  and shall in no way limit any rights
any party may have in the event the Closing does not occur.

<PAGE>

         8.06.    Notice; Defense of Claims.

         Promptly after receipt by an indemnified  party of notice of any claim,
liability or expense to which the  indemnification  obligations  hereunder would
apply,  the  indemnified  party  shall  give  notice  thereof  in writing to the
indemnifying  party (the Company with respect to claims by any  Stockholder  and
the Stockholders,  as applicable,  with respect to claims by Company Indemnified
Parties), but the omission to so notify the indemnifying party promptly will not
relieve the indemnifying  party from any liability except to the extent that the
indemnifying  party  shall have been  prejudiced  as a result of the  failure or
delay in giving such  notice.  Such  notice  shall  state the  information  then
available  regarding  the amount and nature of such claim,  liability or expense
and shall specify the provision or provisions of this Agreement  under which the
liability or  obligation  is asserted.  If within 20 days after  receiving  such
notice the  indemnifying  party gives written  notice to the  indemnified  party
stating that (i) it would be liable under the provisions hereof for indemnity in
the amount of such claim if such  claim  were  successful  (ii) that it shall be
fully  responsible  (with no  reservation  of any  rights)  for all  liabilities
relating  to such claim,  liability  or expense  and that it will  provide  full
indemnification (whether or not otherwise required hereunder) to the indemnified
party  with  respect  to such  claim,  liability  or  expense  and (iii) that it
disputes and intends to defend  against such claim,  liability or expense at its
own cost and  expense,  then  counsel for the  defense  shall be selected by the
indemnifying  party  (subject  to the  consent of the  indemnified  party  which
consent shall not be unreasonably  withheld) and the indemnified party shall not
be required to make any payment with respect to such claim, liability or expense
as long as the  indemnifying  party is  conducting  a good  faith  and  diligent
defense at its own expense; provided, however, that the assumption of defense of
any such matters by the  indemnifying  party shall  relate  solely to the claim,
liability or expense that is subject or potentially  subject to indemnification,
and provided  further that prior to such assumption of defense the  indemnifying
party  shall  enter into an  agreement  with the  indemnified  party in form and
substance   satisfactory  to  the  indemnified   party  pursuant  to  which  the
indemnifying party unconditionally guarantees the payment and performance of any
liability  or  obligation  which may arise out of or in any way relating to such
claim,  liability or expense or the facts giving rise thereto.  The indemnifying
party shall have the right,  with the consent of the  indemnified  party,  which
consent shall not be unreasonably  withheld, to settle all indemnifiable matters
related  to  claims by third  parties  which are  susceptible  to being  settled
provided its  obligation to indemnify the  indemnifying  party  therefor will be
fully  satisfied.  The  indemnifying  party  shall  keep the  indemnified  party
apprised  of the status of the claim,  liability  or expense  and any  resulting
suit, proceeding or enforcement action, shall furnish the indemnified party with
all  documents  and  information  that the  indemnified  party shall  reasonably
request and shall  consult with the  indemnified  party prior to acting on major
matters,  including  settlement  discussions.  Notwithstanding  anything  herein
stated to the contrary,  the indemnified party shall at all times have the right
to fully  participate  in such  defense at its own  expense  directly or through
counsel;  provided,  however,  if the named  parties to the action or proceeding
include both the indemnifying party and the indemnified party and representation
of both  parties by the same counsel  would be  inappropriate  under  applicable
standards  of  professional  conduct,  the expense of  separate  counsel for the
indemnified party shall be paid by the indemnifying  party. If no such notice of
intent to dispute  and  defend is given by the  indemnifying  party,  or if such
diligent  good  faith  defense  is not  being or  ceases  to be  conducted,  the
indemnified party shall, at the expense of the indemnifying party, undertake the
defense of (with counsel selected by the indemnified  party), and shall have the
right to compromise or settle (exercising  reasonable business  judgment),  such
claim,  liability or expense. If such claim, liability or expense is one that by
its  nature  cannot be  defended  solely  by the  indemnifying  party,  then the
indemnified  party shall make available all  information and assistance that the
indemnifying   party  may  reasonably  request  and  shall  cooperate  with  the
indemnifying party in such defense.

         8.07.    Indemnification by the GB&C Entities.

         The GB&C  Entities and their  successors  agree to  indemnify  and hold
harmless the  Stockholders  against all claims against any  Stockholder  arising
from any  personal  guaranty  set  forth on  Schedule  2.33,  provided  that the
contract,  lease or other agreement with respect to which such personal guaranty
was executed is dated before the date hereof,  and provided that,  except as set
forth  on  Schedule  8.07,  the  cause  of  action  giving  rise to a claim  for
indemnification  under this Section 8.07 arose after the date of consummation of
the transactions contemplated hereby.  Notwithstanding the foregoing, the rights
of any Company  Indemnified  Parties  under  Article 8 hereof shall in no way be
impaired by the foregoing  indemnification.  Indemnification  under this Section
8.07 shall not be subject to the expiration  provisions and amount limitation of
Section 8.05.



<PAGE>



ARTICLE IX.  REGISTRATION RIGHTS.

         9.01.    Definitions.

         As used in  this  Article  IX,  the  following  terms  shall  have  the
following meanings:

         "Advice" has the meaning set forth in Section 9.03.

         "Affiliate"  means,  with respect to any  specified  person,  any other
person who,  directly or  indirectly,  controls,  is controlled  by, or is under
common control with such specified person.

         "Commission" means the Securities and Exchange Commission.

         "Controlling Persons" has the meaning set forth in Section 9.05(a).

         "Exchange  Act" means the  Securities  Exchange Act of 1934, as amended
from time to time, or any successor  statute,  and the rules and  regulations of
the Commission promulgated thereunder.

         "Holder" means (i) any Stockholder and (ii) each person (other than the
Company and its  Affiliates)  to whom any  Stockholder  transfers  Securities as
provided  in Section  9.07  hereof,  if the person to whom such  Securities  are
transferred acquires such Securities as Registrable Securities.

         "Lock-up Period" has the meaning set forth in Section 9.06.

         "Lock-up Request" has the meaning set forth in Section 9.06.

         "Prospectus"   means  the  prospectus   included  in  any  Registration
Statement   (including,   without   limitation,   a  prospectus  that  discloses
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus supplement, and by
all other amendments and supplements to the prospectus, including post-effective
amendments, and in each case including all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.

         "Registrable Securities" means the Securities;  provided, however, that
any Securities shall cease to be Registrable  Securities when (i) a Registration
Statement  covering such Registrable  Securities has been declared effective and
such  Registrable  Securities  have been disposed of pursuant to such  effective
Registration  Statement,  (ii) such Registrable  Securities  become eligible for
sale  pursuant to Rule 144 (or any similar  provision  then in force)  under the
Securities Act or (iii) such Securities cease to be outstanding.


<PAGE>

         "Registration  Statement"  means  any  registration  statement  of  the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement and all amendments  and  supplements to any such  registration
statement,  including  post-effective  amendments,  in each case  including  the
Prospectus,  all exhibits,  and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.

         "Securities"  means the shares of Company  Common  Stock  issued to the
Stockholders  pursuant to this Agreement so long as they are owned  beneficially
and of record by a Holder.

         "Securities Act" means the Securities Act of 1933, as amended from time
to  time,  or any  successor  statute,  and the  rules  and  regulations  of the
Commission promulgated thereunder.

         "Suspension Notice" has the meaning set forth in Section 9.03.

         "Suspension Period" has the meaning set forth in Section 9.03.

         9.02.    Resale Registration.

                   (a) Filing;  Effectiveness.  No later than  October 15, 1996,
the  Company  shall  file a  registration  statement  on Form S-3  (the  "Resale
Registration  Statement")  under the  Securities Act covering the resale by such
Holders  of  their  Registrable  Securities  pursuant  to  Rule  415  under  the
Securities Act from time to time in transactions  not involving any underwritten
public  offering and use its best efforts (i) to cause such Resale  Registration
Statement  to be  declared  effective  by the  Commission  for such  Registrable
Securities  as soon as  practicable  thereafter  and  (ii)  to keep  the  Resale
Registration Statement continuously effective until the earliest of (x) the date
on which such Holders no longer hold any Registrable Securities registered under
the Resale  Registration  Statement or (y) the second anniversary of the Closing
Date.  The Company may at its option include the  Registrable  Securities of the
Holders in any  Registration  Statement filed by the Company.  The Company shall
not be required to request that a registration  statement  requested pursuant to
this Section 9.02 become effective prior to 90 days following the effective date
of a registration statement initiated by the Company if any managing underwriter
named in such registration statement has advised the Company in writing that the
registration  or sale of additional  securities by  stockholders  of the Company
within such 90-day period would have a material adverse effect on the likelihood
of success of such underwritten  offering;  provided,  however, that the Company
shall use its best efforts to achieve such effectiveness promptly following such
90- day period if the request  pursuant to this Section 9.02 has been made prior
to the expiration of such 90-day period.  The Company may postpone the filing of
any Registration  Statement  required hereunder for a reasonable period of time,
not to exceed 60 days,  if the Company has been advised by outside legal counsel
that such filing would require the disclosure of a material transaction or other
matter  and the  Company  determines  reasonably  and in good  faith  that  such
disclosure  would  have a  Material  Adverse  Effect on the  Company;  provided,
however,  that the Company  shall (A) use  reasonable  efforts to disclose  such
material transaction or other matter as soon as in its good faith judgment it is
prudent to do so and (B) may so postpone  such filing only if all other  persons
who are named as  selling  securityholders  under  then  effective  registration
statements  filed by the Company with the  Commission  and all  directors of the
Company are advised of the fact that a material  transaction  or other matter is
not  being  disclosed  during  the  length  of  such  postponement  and  of  the
consequences  of such  nondisclosure  under the  Securities Act and the Exchange
Act.

<PAGE>

                  (b) Effective Registration.  A registration will not be deemed
to have been effected as a Resale  Registration  unless the Resale  Registration
Statement with respect  thereto has been declared  effective by the  Commission;
provided, however, that if after it has been declared effective, the offering of
Registrable Securities pursuant to a Resale Registration Statement is interfered
with by any  stop  order,  injunction  or  other  order  or  requirement  of the
Commission or any other governmental  agency or court, such Resale  Registration
Statement will be deemed not to have become  effective during the period of such
interference  until the  offering  of  Registrable  Securities  pursuant to such
Resale Registration Statement may legally resume.

         9.03.  Registration  Procedures.

         In connection  with the  obligations  of the Company to effect or cause
the  registration  of any  Registrable  Securities  pursuant  to the  terms  and
conditions of this Agreement, the Company shall use reasonable efforts to effect
the registration and sale of such Registrable  Securities in accordance with the
intended method of distribution thereof, and in connection therewith:

                  (a) The Company shall  prepare and file with the  Commission a
Registration  Statement on Form S-3 or other  similar form under the  Securities
Act which permits secondary sales of securities in a "shelf  registration,"  and
use reasonable efforts to cause such Registration  Statement to become effective
and remain effective in accordance with the provisions of this Agreement;

                  (b) The  Company  shall  promptly  prepare  and file  with the
Commission such amendments and  post-effective  amendments to each  Registration
Statement as may be necessary to keep such Registration  Statement effective for
as long as such  registration  is required to remain  effective  pursuant to the
terms  hereof;  shall cause the  Prospectus to be  supplemented  by any required
Prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act; and shall comply with the provisions of the Securities
Act  applicable  to it  with  respect  to the  disposition  of  all  Registrable
Securities  covered by such Registration  Statement during the applicable period
in accordance with the intended  methods of disposition by the Holders set forth
in such Registration Statement or supplement to the Prospectus;

                  (c) The  Company  shall  promptly  furnish to any Holder  such
number of copies of the Prospectus  (including each preliminary  Prospectus) and
any amendments or supplements  thereto, as such Holder may reasonably request in
order to  facilitate  the public sale or other  disposition  of the  Registrable
Securities being sold by such Holder;
                                 
                  (d) The  Company  shall,  on or  prior  to the date on which a
Registration Statement is declared effective, use reasonable efforts to register
or qualify the Registrable  Securities  covered by such  Registration  Statement
under such  other  securities  or "blue  sky" laws of such  states of the United
States as any Holder requests;  provided, however, that the Company shall not be
required (i) to qualify  generally to do business in any  jurisdiction  where it
would not otherwise be required to qualify but for this Section  9.03(d) or (ii)
to file any general consent to service of process;

                  (e) The Company shall promptly notify each Holder,  (i) when a
Prospectus or any  Prospectus  supplement or  post-effective  amendment has been
filed  and,  with  respect to a  Registration  Statement  or any  post-effective
amendment,  when the same  has  become  effective,  (ii) of any  request  by the
Commission or any state securities authority for amendments and supplements to a
Registration  Statement and Prospectus or for additional  information  after the
Registration  Statement  has  become  effective,  (iii) of the  issuance  by the
Commission of any stop order  suspending  the  effectiveness  of a  Registration
Statement,  (iv) of the  issuance by any state  securities  commission  or other
regulatory authority of any order suspending the qualification or exemption from
qualification  of any of the Registrable  Securities  under state  securities or
"blue sky" laws, and (v) of the happening of any event which makes any statement
made in a Registration  Statement or related Prospectus untrue or which requires
the making of any changes in such  Registration  Statement or Prospectus so that
they will not contain any untrue  statement of a material  fact or omit to state
any  material  fact  required  to be stated  therein  or  necessary  to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.  As soon as practicable  following  expiration of the Suspension
Period  (as  defined  below),  the  Company  shall  prepare  and  file  with the
Commission and furnish a supplement or amendment to such  Prospectus so that, as
thereafter  deliverable to the purchasers of such Registrable  Securities,  such
Prospectus  will not contain any untrue  statement of a material fact or omit to
state a material fact necessary to make the statements  therein, in light of the
circumstances under which they were made, not misleading.

<PAGE>

         In the case of a  Resale  Registration  Statement,  each  Holder,  upon
receipt of any notice (a "Suspension  Notice") from the Company of the happening
of any  event of the kind  described  in  Section  9.03(e)(v),  shall  forthwith
discontinue  disposition of the  Registrable  Securities  pursuant to the Resale
Registration  Statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended Prospectus  contemplated by
Section  9.03(e) or until it is advised in writing (the "Advice") by the Company
that the use of the  Prospectus may be resumed,  and has received  copies of any
additional or  supplemental  filings which are  incorporated by reference in the
Prospectus,  and, if so  directed by the  Company,  such  Holder  will,  or will
request any broker-dealer acting as such Holder's agent or as an underwriter to,
deliver  to the  Company  (at the  Company's  expense)  all  copies,  other than
permanent file copies then in such Holder's or  broker-dealer's  possession,  of
the  Prospectus  covering  such  Registrable  Securities  current at the time of
receipt of such  notice;  provided,  however,  that in no event shall the period
from the date on which any Holder  receives a  Suspension  Notice to the date on
which any Holder  receives  either the Advice or copies of the  supplemented  or
amended  Prospectus  contemplated by Section 9.03(e) (the  "Suspension  Period")
exceed 60 days; and provided  further that such  Suspension  Notice shall not be
effective unless the Company has contemporaneously  given an analogous notice to
all  other  persons  named  as  selling   securityholders   in  then   effective
registration  statements  filed by the Company  with the  Commission  and to the
Company's  directors.  In the event that the Company  shall give any  Suspension
Notice, the time periods for which a Resale  Registration  Statement is required
to be kept  effective  pursuant to Section  9.02 hereof shall be extended by the
number of days during the Suspension Period.

         9.04.  Registration  Expenses. 

         The Company  shall bear all expenses  incurred in  connection  with the
registration  of the  Registrable  Shares  pursuant  to  Section  9.02  of  this
Agreement. Such expenses shall include, without limitation,  all printing, legal
and accounting  expenses incurred by the Company and all registration and filing
fees imposed by the Commission,  any state  securities  commission or the Nasdaq
National  Market.  The  Holders  shall  be  responsible  for  any  brokerage  or
underwriting  commissions and taxes of any kind (including,  without limitation,
transfer taxes) with respect to any disposition, sale or transfer of Registrable
Securities and for any legal, accounting and other expenses incurred by them.

         9.05.    Indemnification and Contribution.

                   (a)  Indemnification  by the Company.  The Company  agrees to
indemnify and hold harmless,  to the full extent  permitted by law, each Holder,
its partners, officers, directors, trustees, stockholders, employees and agents,
and each person who controls such Holder within the meaning of either Section 15
of the  Securities  Act or Section 20 of the  Exchange  Act, or is under  common
control  with,  or is  controlled  by, such Holder,  together with the partners,
officers,  directors,  trustees,  stockholders,  employees  and  agents  of such
controlling person (collectively,  the "Controlling Persons"),  from and against
all  losses,  claims,  damages,  liabilities  and  expenses  (including  without
limitation reasonable legal fees and expenses incurred by any Holder or any such
Controlling Person documented in writing) (collectively, the "Damages") to which
such  Holder,  its  partners,  officers,  directors,   trustees,   stockholders,
employees and agents,  and any such Controlling  Person may become subject under
the  Securities  Act or otherwise,  insofar as such Damages (or  proceedings  in
respect  thereof)  arise out of or are based upon any  untrue or alleged  untrue
statement of material  fact  contained  in any  Registration  Statement  (or any
amendment  thereto)  pursuant to which  Registrable  Securities  were registered
under the Securities Act, or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or caused by any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
Prospectus (as amended or  supplemented  if the Company shall have furnished any
amendments  or  supplements  thereto),  or caused  by any  omission  or  alleged
omission  to state  therein a material  fact  necessary  to make the  statements
therein in light of the circumstances under which they were made not misleading,
except  insofar as such  Damages  arise out of or are based upon any such untrue
statement or omission based upon  information  relating to such Holder furnished
in writing to the Company by such Holder specifically for use therein; provided,
however,  that the Company  shall not be liable to any Holder under this Section
9.05(a) to the extent  that any such  Damages  were caused by the fact that such
Holder sold Securities to a person as to whom it shall be established that there
was not sent or given,  at or prior to the written  confirmation of such sale, a
copy of the Prospectus as then amended or supplemented  if, and only if, (i) the
Company  has  previously  furnished  copies  of  such  amended  or  supplemented
Prospectus  to such  Holder  and (ii) such  Damages  were  caused by any  untrue
statement or omission or alleged untrue  statement or omission  contained in the
Prospectus  so delivered  which was  corrected  in such amended or  supplemented
Prospectus.

<PAGE>

                  (b)  Indemnification  by  the  Holders.  Each  Holder  agrees,
severally  and not jointly,  to  indemnify  and hold  harmless the Company,  its
stockholders,  directors,  officers  and each  person,  if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the  foregoing  indemnity  from the
Company to such Holder, but only with reference to information  relating to such
Holder  furnished in writing to the Company by such selling Holder  specifically
for  use in  any  Registration  Statement  (or  any  amendment  thereto)  or any
Prospectus (or any amendment or supplement  thereto);  provided,  however,  that
such selling  Holder  shall not be  obligated  to provide such  indemnity to the
extent  that such  Damages  result  from the  failure of the Company to promptly
amend or take action to correct or supplement any such Registration Statement or
Prospectus  on the basis of corrected or  supplemental  information  provided by
such selling Holder to the Company expressly for such purpose. In no event shall
the liability of any Holder of  Registrable  Securities  hereunder be greater in
amount than the amount of the proceeds  received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.

                  (c)  Contribution.  To the  extent  that  the  indemnification
provided for in paragraph (a) or (b) of this Section 9.05 is  unavailable  to an
indemnified  party  or  insufficient  in  respect  of  any  Damages,  then  each
indemnifying   party  under  such  paragraph,   in  lieu  of  indemnifying  such
indemnified party thereunder,  shall contribute to the amount paid or payable by
such  indemnified  party as a result of such  Damages in such  proportion  as is
appropriate to reflect the relative fault of the Company on the one hand and the
Holders on the other hand in connection  with the  statements or omissions  that
resulted   in  such   Damages,   as  well  as  any  other   relevant   equitable
considerations.  The  relative  fault of the  Company on the one hand and of the
Holders on the other hand shall be  determined  by  reference  to,  among  other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied  by the Company or by the Holders  and the  parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.

         If  indemnification  is available  under  paragraph  (a) or (b) of this
Section 9.05, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in such paragraphs without regard to the relative fault
of  said  indemnifying  party  or  indemnified  party  or  any  other  equitable
consideration provided for in this Section 9.05(c).

         The  Company  and  each  Holder  agrees  that it  would  not be just or
equitable if  contribution  pursuant to this Section  9.05(c) were determined by
pro rata  allocation  or by any other  method of  allocation  that does not take
account of the equitable considerations referred to herein.

         9.06.  Restrictions  on Sale.

         In the event of an underwritten  public offering for the account of the
Company,  upon the written  request  (the  "Lock-up  Request")  of the  managing
underwriter (or underwriters) of such offering, each Holder agrees not to effect
any  public  sale or  distribution  of any  securities  similar  to those  being
registered in such offering (other than pursuant to such  offering),  including,
without   limitation,   through  sales  of  Securities   pursuant  to  a  Resale
Registration  Statement,  during  the 14 days  prior to,  and  during the 90-day
period beginning on the effective date of the Registration Statement relating to
such offering (the "Lock-up Period");  provided, however, that the Holders shall
not be  required  to  comply  with  such  Lock-up  Request  unless  the  Company
simultaneously  demands  analogous  restrictions on sale and uses all reasonable
efforts to obtain from all other  persons who are  contractually  bound with the
Company to comply with such Lock-up  Requests and from the Company's  directors.
In the event of the delivery of a Lock-up Request,  the time periods for which a
Resale  Registration  Statement  is  required to be kept  effective  pursuant to
Section  9.02 hereof  shall be extended by the number of days during the Lock-up
Period.

         9.07.  Transfer of Registration  Rights.

         The registration  rights of the Stockholders and any Holders under this
Article IX may be transferred to any transferee of Registrable  Securities  that
acquires at least 1,000 shares of Registrable Securities (appropriately adjusted
for stock splits,  stock dividends and the like).  Each such transferee shall be
deemed to be a "Holder" for purposes of this Article IX.

<PAGE>

ARTICLE X.  NON-COMPETITION AGREEMENT.

         10.01.  Non-Competition  Agreement. 

         Each of the  Stockholders  shall execute and deliver a  Non-Competition
Agreement in the form of Exhibit 10.01  attached  hereto (the "Non-  Competition
Agreement"),  whereby each of them agrees that during the period  commencing  on
the date of the  Closing  and ending on the later of (a) the date which is three
(3) years  after the date of the  Closing or (b) the second  anniversary  of the
date on which the relevant  individual ceases to be an employee or consultant of
DAKA or a GB&C Entity or any of their respective  affiliates for any reason,  he
will not,  without  the  express  written  consent of the  Company,  directly or
indirectly,  anywhere in the United States,  engage in any activity which is, or
participate or invest in or assist (whether as owner,  part-owner,  shareholder,
partner, director,  officer, trustee, employee,  franchiser,  licensor, agent or
consultant,  or in any other capacity) any business  organization other than the
Company  (or any  affiliate  of the  Company)  that is  engaged  in the  current
business of the GB&C Entities,  including  without  limitation the  manufacture,
sale,  franchising,  marketing,  licensing or  distribution of bagels or coffee;
except that each such  individual may make passive  investments in a competitive
enterprise  the  shares  of  which  are  publicly   traded  if  such  investment
constitutes  less than one  percent  of the equity of such  enterprise.  Without
implied limitation, the forgoing covenant shall include, to the extent permitted
by  applicable  law,  hiring or  attempting to hire for or on behalf of any such
competitor  any officer or other  employee of the Company,  the GB&C Entities or
any of their respective affiliates, encouraging any officer or other employee to
terminate  his or her  relationship  or  employment  with the Company,  the GB&C
Entities or any of their respective  affiliates,  soliciting for or on behalf of
any such competitor any licensee, franchisee, supplier or other service provider
of the Company,  the GB&C Entities or any of their  respective  affiliates,  and
diverting to any Person (as hereinafter defined) any license,  franchise, supply
or other business  opportunity of the Company, the GB&C Entities or any of their
respective affiliates. As of the date of this Agreement, other than with respect
to the GB&C  Entities,  no  Stockholder  is performing  any  consulting or other
duties  for,  nor is a party to any  similar  agreement  with,  any  business or
venture competing with the Company, the GB&C Entities or any of their respective
affiliates.  For purposes of this  Agreement,  the term  "Person"  shall mean an
individual, a corporation,  an association,  a partnership,  an estate, a trust,
and any other entity or  organization.  For purposes of this Section 10.01,  the
term  "affiliate"  shall  mean,  as to any  Person,  (i) each direct or indirect
subsidiary  of such  Person,  (ii) each other  Person of which such  Person is a
direct  or  indirect  subsidiary,  and  (iii)  each  other  direct  or  indirect
subsidiary of such other Person.


ARTICLE XI.  MISCELLANEOUS.

         11.01.   Fees and Expenses.

                  (a)  Each  of the  parties  will  bear  its  own  expenses  in
connection  with  the  negotiation  and  the  consummation  of the  transactions
contemplated by this  Agreement,  and no expenses of any of the GB&C Entities or
the  Stockholders  relating  in any way to the  purchase  and sale of the Shares
hereunder and the transactions contemplated hereby, including without limitation
legal,  accounting or other professional expenses of any of the GB&C Entities or
the  Stockholders,  shall  be  charged  to or paid or  borne  by any of the GB&C
Entities or the Company.

                  (b) The Stockholders  will pay all costs incurred,  whether at
or subsequent to the Closing,  in connection  with the transfer of the Shares to
the Company as contemplated by this Agreement, including without limitation, all
transfer  taxes  and  charges  applicable  to such  transfer,  and all  costs of
obtaining  permits,  waivers,  registrations  or  consents  with  respect to any
assets, rights or contracts of the GB&C Entities.

<PAGE>

         11.02.   Tax Accounting Matters and Tax Returns.

                  (a) The books of each of the GB&C Entities  shall,  consistent
with Section  1362(e)(6)(D)  of the Code,  be closed  effectively  as of the day
preceding the Closing Date and, accordingly,  a separate and distinct accounting
period of each of the GB&C Entities shall commence on the Closing Date.

                   (b) With respect to each applicable federal income tax return
obligation  of the GB&C  Entities for the taxable year that includes the Closing
Date,  two tax returns  shall be  required  for each of the GB&C  Entities,  one
return covering each GB&C Entity's "S short year" (within the meaning of Section
1362(e)(1)(A) of the Code or the corresponding  provision under applicable state
law) and a second covering each GB&C Entity's "C short year" (within the meaning
of Section  1362(e)(1)(B)  of the Code);  provided that all returns  relating to
periods  after  the "S  short  year"  shall be  subject  to  applicable  federal
consolidated  return  rules and  regulations.  State  income tax returns will be
filed in a consistent manner unless otherwise required by applicable state law.

                   (c) The  Stockholders  and the Company shall cooperate in the
preparation and filing of all tax returns relating to each of the GB&C Entities'
S and C short years. In particular,  the Stockholders,  the Company, and each of
the GB&C Entities shall make available to each other,  as reasonably  requested,
all  information,  records,  or  documents  that  shall  be  necessary  for  the
preparation and filing of all tax returns for each of the GB&C Entities' S short
years and C short years. The  Stockholders,  the GB&C Entities,  and the Company
shall also cooperate with each other in connection with information  relating to
the adjusted  basis of GB&C assets and the stock of the GB&C  Entities as of the
date of the Closing.

                   (d) It is expressly  provided herein that the tax returns for
the S short years of the GB&C  Entities  shall not be filed with the  applicable
taxing  authority  without the written consent of Michael F. Zerbib and Jason R.
Olivier, which consent shall not be unreasonably withheld.

                   (e)  All   information,   records,   and  documents  used  in
connection  with the  preparation of income tax returns of the GB&C Entities for
the  taxable  year  that  includes  the  Closing  Date  shall be  preserved  and
maintained until the expiration of any applicable statute of limitations.

                   (f)  Each  of  the  Company,  the  GB&C  Entities,   and  the
Stockholders  shall,  in connection with any tax returns filed by the any of the
foregoing,  report or reflect the acquisition by the Company of the stock of the
GB&C Entities as reorganizations  within the meaning of Section 368 of the Code.
For this purpose, in the event requested by the Company,  the Stockholders shall
furnish (i) certificates reflecting,  as of the Closing Date, the absence of any
plan or intention to dispose of more than fifty  percent  (50%) of the aggregate
shares of DAKA Common  Stock  receivable  by the  Stockholders  pursuant to this
Agreement,  and (ii) such other  representations that the Company may reasonably
request to establish the status of such  acquisitions as  reorganizations  under
Section 368 of the Code.

         11.03.   Governing Law. 

         This  Agreement  shall be construed  under and governed by the internal
laws of the State of Delaware without regard to its conflict of laws provisions.

         11.04.  Notices. 

         Any  notice,   request,  demand  or  other  communication  required  or
permitted  hereunder  shall be in writing and shall be deemed to have been given
if delivered  or sent by facsimile  transmission,  upon  receipt,  or if sent by
registered  or certified  mail,  upon the sooner of the date on which receipt is
acknowledged or the expiration of three days after deposit in United States post
office  facilities  properly  addressed with postage  prepaid.  All notices to a
party will be sent to the  addresses set forth below or to such other address or
person as such party may designate by notice to each other party hereunder:
            

<PAGE>



TO THE COMPANY:                DAKA International, Inc.
                               One Corporate Place
                               55 Ferncroft Road
                               Danvers, MA 01923-4001
                         Attn: Charles W. Redepenning, Jr.

With a copy to:                Goodwin, Procter & Hoar
                               Exchange Place
                               Boston, MA 02109
                         Attn: Ettore A. Santucci, P.C.
                         Facsimile: (617) 523-1231

TO THE GB&C ENTITIES:         The Great Bagel & Coffee Co.
                              125 West Genini Drive
                              Suite E 4/5
                              Temple, AZ 85283
                              Attn: Jason Olivier

With a copy to:               Goodwin, Procter & Hoar
                              Exchange Place
                              Boston, MA 02109
                        Attn: Ettore A. Santucci, P.C.
                        Facsimile: (617) 523-1231

TO ANY STOCKHOLDER:           Michael F. Zerbib
                              3216 N. 3rd Street
                              Phoenix, AZ 85012

With a copy to:               Snell & Wilmer LLP
                              One Arizona Center
                              400 E. VanBuren, 10th Floor
                              Phoenix, AZ  85004-0001
                              Attn:  Terry Morris Roman
                              Facsimile:  (602) 382-6070

Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.

<PAGE>

         11.05.  Entire Agreement.  

         This Agreement, including the Schedules and exhibits referred to herein
and the other writings specifically identified herein or contemplated hereby, is
complete,  reflects  the entire  agreement  of the parties  with  respect to its
subject  matter,  and  supersedes  all  previous  written or oral  negotiations,
commitments  and  writings.   No  promises,   representations,   understandings,
warranties and agreements  have been made by any of the parties hereto except as
referred to herein or in such Schedules and exhibits or in such other  writings;
and all inducements to the making of this Agreement  relied upon by either party
hereto have been  expressed  herein or in such  Schedules or exhibits or in such
other writings.

         11.06. Assignability.

         This Agreement  shall be assignable by the Company prior to the Closing
to a subsidiary  of the Company  although no such  assignment  shall relieve the
Company of any liabilities or obligations  under this Agreement.  This Agreement
shall not  otherwise  be  assignable  by the Company  without the prior  written
consent of Stockholders  owning a majority of the Shares or (except as otherwise
permitted by Section  9.07  hereof) by any  Stockholder  without  prior  written
consent of the Company. This Agreement shall be binding upon and enforceable by,
and shall  inure to the  benefit  of, the  parties  hereto and their  respective
successors,  heirs,  executors,  administrators  and permitted  assigns,  and no
others.  Notwithstanding the foregoing, nothing in this Agreement is intended to
give any person not named  herein the benefit of any legal or  equitable  right,
remedy or claim under this Agreement, except as expressly provided herein.

         11.07.  Captions  and Gender.

         The captions in this Agreement are for  convenience  only and shall not
affect the construction or interpretation  of any term or provision hereof.  The
use in this  Agreement of the  masculine  pronoun in reference to a party hereto
shall be deemed to include the feminine or neuter, as the context may require.

         11.08.   Execution in Counterparts.

         For the  convenience of the parties and to facilitate  execution,  this
Agreement  may be executed in two or more  counterparts,  each of which shall be
deemed an original, but all of which shall constitute one and the same document.

         11.09.  Amendments;  Waivers. 

         This Agreement may not be amended or modified  except by a writing duly
and validly executed by each  Stockholder and the Company.  Any party hereto may
waive any covenant or condition intended for its benefit in its discretion,  but
delay on the party of any party in  exercising  any  right,  power or  privilege
hereunder  shall not  operate as a waiver  thereof,  nor shall any waiver on the
part of any party of any such right,  power or  privilege,  preclude any further
exercise  thereof or the exercise of any other such right,  power or  privilege.
The rights and  remedies of any party  arising out of or otherwise in respect of
any inaccuracy in or breach of any representation or warranty, or any failure to
perform or comply with any covenant or  agreement,  contained in this  Agreement
shall in no way be limited  by the fact that the act,  omission,  occurrence  or
other  state of facts  upon  which any claim of any such  inaccuracy,  breach or
failure  is based may also be the  subject  matter of any other  representation,
warranty,  covenant or agreement  contained in this  Agreement  (or in any other
agreement  between the  parties) as to which there is no  inaccuracy,  breach or
failure.

<PAGE>

         11.10.  Publicity and  Disclosures.

         Until the Closing Date, so long as this Agreement is in effect, none of
the  parties  hereto  nor any of their  respective  stockholders,  subsidiaries,
affiliates,   officers,   directors  or  employees  shall  issue  or  cause  the
publication  of any press  release or other  announcement  with  respect to this
Agreement  or the  other  transactions  contemplated  hereby  without  the prior
written  consent  of the  other  parties  hereto,  which  consent  shall  not be
unreasonably  withheld,  except to the  extent  disclosure  is  required  by any
applicable  law or regulation or by any court or  authorized  administrative  or
governmental agency.

         11.11.  Specific  Performance. 

         The parties  agree that it would be difficult to measure  damages which
might  result  from a  breach  of  this  Agreement  by the  GB&C  Entities,  the
Stockholders or the Company and that money damages would be an inadequate remedy
for such a breach.  Accordingly,  if there is a breach or proposed breach of any
provision  of this  Agreement  by the GB&C  Entities,  the  Stockholders  or the
Company,  and the Company or the Stockholders,  as the non-breaching party, does
not elect to  terminate  under  Article VII,  the  non-breaching  party shall be
entitled,  in addition to any other  remedies  which such party may have,  to an
injunction or other appropriate equitable relief to restrain such breach without
having to show or prove actual damage to such party.

         11.12.  Severability. 

         The  parties  agree  that,  in the  event  that any  provision  of this
Agreement  or the  application  of any such  provision to any party is held by a
court of competent jurisdiction to be contrary to law, the provision in question
shall be  construed  so as to be lawful  and the  remaining  provisions  of this
Agreement shall remain in full force and effect.


<PAGE>



                 SIGNATURE PAGE TO THE STOCK PURCHASE AGREEMENT
                              DATED MARCH __, 1996


         IN WITNESS  WHEREOF,  the undersigned have executed this Agreement as a
sealed instrument as of the day and year first above written.

                               DAKA INTERNATIONAL, INC.


                               By:    /s/ Charles W. Redepenning, Jr.
                               --------------------------------------
                                      Charles W. Redepenning, Jr.
                                      Senior Vice President and General Counsel

                               THE GREAT BAGEL AND COFFEE
                               FRANCHISING CORP.


                               By:    /s/ Jason R. Olivier
                               ---------------------------




                               GBC CREDIT COMPANY


                               By:    /s/ Jason R. Olivier
                               ---------------------------




                               GEMINI PRODUCTION FACILITY, INC.


                               By:    /s/ Jason R. Olivier
                               ---------------------------




                               THE GREAT BAGEL AND COFFEE COMPANY


                               By:    /s/ Jason R. Olivier
                               ---------------------------

                                      

<PAGE>


                 SIGNATURE PAGE TO THE STOCK PURCHASE AGREEMENT
                            DATED _________ __, 1996




                                 /s/ Mark C. Gordon
                                 ------------------
                                 Mark C. Gordon



                                /s/ Brian H. Loeb
                                -----------------
                                Brian H. Loeb



                                /s/ Jason R. Olivier
                                --------------------
                                Jason R. Olivier



                                /s/ Michael F. Zerbib
                                ---------------------
                                Michael F. Zerbib



                                /s/ Nicholas D. Zerbib
                                ----------------------
                                Nicholas D. Zerbib



                                /s/ Thierry E. Zerbib
                                ---------------------
                                Thierry E. Zerbib