<PAGE>
 
                                                                    EXHIBIT 10.6






                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                             TERRACE HOLDINGS, INC.

                            A DELAWARE CORPORATION,

                                      AND

                        VIRGIL SCARBROUGH & SCOTT DAVIS
<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------

<TABLE>
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<S>                                                                     <C>
1.   DEFINITIONS                                                         1

     1.1  Affiliate..................................................    1
     1.2  Ancillary Documents........................................    1
     1.3  Code.......................................................    3
     1.4  Liabilities................................................    3
     1.5  Rights.....................................................    3
     1.6  Stock................

2.   SALE OF ASSETS AND ISSUANCE OF STOCK............................    3

     2.1  Purchase and Sale of Assets and Rights.....................    3
     2.2  Delivery of Possession and Instruments of Transfer.........    4

3.   CONSIDERATION...................................................    4

     3.1  Cash Consideration.........................................    4
     3.2  Stock Redemption...........................................    4
     3.3  Time and Mode of Cash Payment..............................    4
     3.4  Issuance of THI Shares of Capital Stock....................    4

4.   CLOSING.........................................................    6

     4.1  Closing and Closing Date...................................    6

5.   REPRESENTATIONS AND WARRANTIES OF FRESH.........................    6

     5.1  Organization, Good Standing, Power, Etc....................    6
     5.2  Capital Stock..............................................    7
     5.3  Articles of Incorporation and By-Laws......................    7
     5.4  Subsidiaries, Divisions and Affiliates.....................    7
     5.5  Equity Investments.........................................    7
     5.6  Authorization of Agreement.................................    7
     5.7  Effect of Agreement........................................    8
     5.8  Restrictions; Burdensome Agreements........................    8
     5.9  Governmental and Other Consents............................    8
     5.10 Financial Statements.......................................    8
     5.11 Absence of Certain Changes or Events.......................    9
</TABLE> 

                                       i
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     5.12  Title to Assets; Absence of Liens and Encumbrances..............   9
     5.13  Equipment.......................................................  10
     5.14  Insurance.......................................................  10
     5.15  Agreements, Arrangements, Etc...................................  11
     5.16  Patents, Trademarks, Copyrights, Etc............................  14
     5.17  Permits, Licenses, Etc..........................................  15
     5.18  Compliance with Applicable Laws.................................  15
     5.19  Litigation......................................................  15
     5.20  No Interest in Competitors......................................  16
     5.21  Customers, Suppliers, Distributors and Agents...................  16
     5.22  Books and Records...............................................  16
     5.23  Employee Benefit Plans..........................................  17
     5.24  Powers of Attorney..............................................  17
     5.25  Sufficiency of Assets and Commitments...........................  17
     5.26  Labor Disputes, Unfair Labor Practices..........................  18
     5.27  Past Due Obligations............................................  18
     5.28  Environmental Compliance........................................  18
     5.29  Tax and Other Returns and Reports...............................  19
     5.30  Recent Dividends and Other Distributions........................  19
     5.31  Inventory.......................................................  19
     5.32  Purchase and Sale Obligations...................................  20
     5.33  Other Information...............................................  20
     5.34  Knowledge of FRESH and the Shareholders.........................  20

6.   REPRESENTATIONS AND WARRANTIES OF THI.................................  20

     6.1   Organization....................................................  20
     6.2   Authorization of Agreement......................................  20
     6.3   Effect of Agreement.............................................  21
     6.4   Litigation......................................................  21
     6.5   Possible Submission to Stockholder Vote.........................  21

7.   POST-CLOSING COVENANTS................................................  21

     7.1   Further Assurances..............................................  21
     7.2   Confidentiality.................................................  23
     7.3   Cooperation.....................................................  23



8.   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THI........................  23
</TABLE> 

                                      ii
<PAGE>

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     8.1   Accuracy and Representations and Warranties.....................  23
     8.2   Performance of Agreements.......................................  23
     8.3   Litigation, Etc.................................................  24
     8.4   Approvals and Consents..........................................  24
     8.5   Shareholders' Certificate.......................................  24
     8.6   Officer's Certificate...........................................  24
     8.7   Good Standing Certificates......................................  25
     8.8   No Material Adverse Change......................................  25
     8.9   Actions, Proceedings, Etc.......................................  25
     8.10  Opinion of Counsel to FRESH.....................................  25
     8.11  Licenses, Permits, Consents, Etc................................  25
     8.12  Documentation of Rights.........................................  25
     8.13  Officers' Financial Certificate.................................  26
     8.15  Accountants Letter..............................................  26
     8.16  Completion of Due Diligence.....................................  26

9.   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF FRESH......................  26

     9.1   Accuracy of Representations and Warranties......................  26
     9.2   Performance of Agreements.......................................  26
     9.3   Secretary's Certificate.........................................  26
     9.4   Actions, Proceedings, Etc.......................................  26
     9.5   No Injunction...................................................  27
     9.6   Opinion of Counsel to Buyer.....................................  27

10.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATIONS..........  27

     10.1  Survival........................................................  27
     10.2  Indemnification by FRESH and its Shareholders...................  27
     10.3  Indemnification by THI..........................................  28
     10.4  Right to Defend.................................................  29
     10.5  Subrogation.....................................................  29

11.  MISCELLANEOUS.........................................................  29

     11.1  Expenses........................................................  29
     11.2  Waivers.........................................................  29
     11.3  Binding Effect; Benefits........................................  30
     11.4  Assignment......................................................  30
     11.5  Notices.........................................................  30
     11.6  Entire Agreement................................................  31
     11.7  Headings; Certain Terms.........................................  31
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                                      iii
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     11.8   Counterparts...................................................  31
     11.9   Governing Law..................................................  32
     11.10  Severability...................................................  32
     11.11  Amendments.....................................................  32
     11.12  Transaction Taxes..............................................  32
     11.13  Disclosures....................................................  32
     11.14  Section References.............................................  32
     11.15  Brokers and Finders............................................  32
</TABLE>

                                      iv
<PAGE>
 
                           SCHEDULE AND EXHIBIT INDEX
                           --------------------------

<TABLE>
<CAPTION>
<C>     <C>               <S>
1.      Exhibit 1.3(b)    Inventory
2.      Exhibit 1.3(c)    Equipment
3.      Exhibit 1.3(d)    Rights (Patents, Trademarks, Copyrights, etc.)
4.      Exhibit 1.3(g)    Accounts Receivable
5.      Exhibit 1.3(h)    Real Property (owned or leased)
6.      Exhibit 1.3(j)    Excluded Assets
7.      Exhibit 2.1       Excluded Liabilities
8.      Exhibit 3.1       Promissory Notes
9.      Exhibit 3.4       Scarbrough & Davis Employment Agreements
10.     Exhibit 3.6       Allocation of Consideration
11.     Exhibit 4.1       Form of Closing Memorandum
12.     Exhibit 5.1       Good Standing Certificates - FRESH
13.     Exhibit 5.2       Outstanding Offers, Options, Warrants, Equity Securities, Etc.
14.     Exhibit 5.3       Articles of Incorporation and By-laws of FRESH
15.     Exhibit 5.4       Subsidiaries, Divisions and Affiliates of FRESH
16.     Exhibit 5.5       Equity Investments
17.     Exhibit 5.10      Financial Statements of FRESH
18.     Exhibit 5.11      Material Adverse Changes
19.     Exhibit 5.12      Liens and Encumbrances of FRESH
20.     Exhibit 5.14      Insurance Policies
21.     Exhibit 5.15.1    Liabilities
22.     Exhibit 5.16      Patents, Trademarks, Copyrights
23.     Exhibit 5.17      Permits, Licenses, Etc.
24.     Exhibit 5.19      Material Litigation
25.     Exhibit 5.20      5% Interest Ownership Table
26.     Exhibit 5.21      Interest in Competitors
27.     Exhibit 5.23      Employee Benefit Plans
28.     Exhibit 5.24      Powers of Attorney
29.     Exhibit 5.25      Sufficiency of Assets & Liabilities
30.     Exhibit 5.26      Material Labor Disputes
31.     Exhibit 5.27      Past Due Obligations
32.     Exhibit 5.28      Environmental Compliance
33.     Exhibit 5.29.A    Tax Examination Dates
34.     Exhibit 5.29.B    Examinations of Tax Returns by Governmental Agency
35.     Exhibit 5.29.C    Proposal by Governmental Entity of Deficiency, Assessment or Claim of Taxes
36.     Exhibit 5.31.A    Inventory
37.     Exhibit 5.31.B    Non-useable Inventory
38.     Exhibit 10.10     Opinion of Counsel to FRESH
39.     Exhibit 10.14     Officer's Financial Certificate
40.     Exhibit 10.15     Accountant's Letter
41.     Exhibit 11.3      Secretary's Certificate
42.     Exhibit 11.6      Opinion of Counsel to THI
</TABLE>

                                       v

<PAGE>
 
                               PURCHASE AGREEMENT
                               ------------------

     THIS AGREEMENT ("Agreement") is made and entered into as of the _____ day
of _____, 1997, by and among Terrace Holdings, Inc., a Delaware corporation, or
its assignee under Section 13.5 of this Agreement ("THI") and Virgil Scarbrough
("Scarbrough")and Scott Davis ("Davis")(collectively, the "SELLERS").

                                   RECITALS:
                                   ---------

     WHEREAS, SELLERS own all of the Stock (as hereinafter defined);

     WHEREAS, THI desires to purchase from SELLERS, and SELLERS desire to sell
to THI, all of the outstanding stock on the terms and conditions set forth in
this Agreement;

     NOW THEREFORE, in consideration of the foregoing the mutual covenants and
agreements of the parties hereinafter set forth, and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

     1.   DEFINITIONS
          -----------

     1.1  "Affiliate".  As used in this Agreement, the term "Affiliate" shall
mean, as applied to any person, any other person directly or indirectly
controlling, controlled by, or under common control with, that person.   For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by", and "under common control with") as
applied to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of that
person or entity, whether through the ownership of voting securities, by
contract, or otherwise.

     1.2  "Ancillary Documents" shall have the meaning set forth in Section 9.1
           -------------------                                                 
hereof.
 
     1.3  "Code" shall mean the Internal Revenue Code of 1986, as amended,
           ----                                                           
and/or superseded.

     1.4  "Liabilities" shall mean all agreements, indentures, mortgages, plans,
policies, arrangements, and other instruments, including all amendments thereto
(or where they are verbal, written summaries of the materials terms thereof),
fixed or contingent, required to be disclosed on Exhibit 5.15.1 and all trade
payables and liabilities related to the Assets incurred in the ordinary course
of business and disclosed on Exhibit 5.10 or incurred 

                                       1
<PAGE>
 
thereafter consistent with the term of this Agreement, which remain outstanding
at Closing.

     1.5  "Rights" shall mean copyrights, licenses, patents, trademarks,
trademark rights, trade names, service marks, service mark rights, and trade
secrets, shop rights, know-how, technical information, techniques, discoveries,
designs, proprietary rights and non-public information of FRESH and
registrations, reissues and extensions thereof and applications and license
therefor.

     1.6  "Stock" shall mean all of the outstanding stock of Fresh, Inc.
           -----                                                        
("FRESH").

     2.   SALE OF STOCK AND ISSUANCE OF THI STOCK
          ---------------------------------------

     2.1  Purchase and Sale of Stock.  In exchange for the consideration
specified herein, and upon and subject to the terms and conditions of this
Agreement, THI agrees to purchase and acquire from SELLERS, and SELLERS agree to
sell, assign, transfer, convey and deliver to THI or its assignee under Section
13.5 at the Closing, all rights, title and interest in and to the Stock, free
and clear of any lien, encumbrance, security agreement, equity, option, claim,
and charge or restriction.

     2.2  Delivery of Possession and Instruments of Transfer.  At the Closing,
SELLERS shall deliver to THI stock certificates of sale and such other
instruments of transfer requested by and satisfactory to THI and its counsel for
the consummation of the transactions contemplated under this Agreement and as
are necessary to vest in THI all of SELLERS' rights, title and interest in and
to the Stock, free and clear of any lien, encumbrance, security agreement,
equity, option, claim, charge or restriction of any kind or nature.

     3.   CONSIDERATION
          -------------

     3.1  Cash Consideration.  The aggregate cash consideration to be paid by
THI in full consideration for its purchase of the Stock and the other rights
provided herein shall be $70,000, to be divided among SELLERS, $35,000 each,
payable in accordance with the provisions of Section 3.3.

     3.2  Stock Redemption.   In order provide SELLERS with ownership of all the
outstanding Stock, immediately prior to Closing, Richard Golrich ("Goldrich"),
pursuant to that certain Stock Redemption between FRESH, Scarbrough, Davis and
Goldrich,("Stock Redemption") shall tender to FRESH, any and all Stock owned by
him and in consideration therefor, FRESH shall pay to Goldrich $35,000,  payable
in accordance with the provisions of Section 3.3.  A copy of the Stock
Redemption is attached as exhibit hereto.

                                       2
<PAGE>
 
     3.3  Time and Mode of Cash Payment.  The cash consideration set forth in
Section 3.1 shall be payable at the Closing by cashiers' or certified check(s)
or by wire transfer of funds, provided good and marketable title to the Stock is
delivered, free and clear of any lien, or encumbrance in accordance with Section
2.2 hereof and provided all other terms and conditions of this Agreement have
been complied with.

     3.4  Issuance of THI Shares of Capital Stock.  As additional consideration,
subject to the conditions precedent set forth in this Agreement, at the Closing,
THI shall issue, and pursuant to that certain Stock Redemption, FRESH shall
cause THI to issue, to Scarbrough, Davis and Goldrich, an amount of shares of
THI common stock, par value $.001 per share, to be divided equally among
Scarbrough, Davis and Goldrich, as is equal to $150,000 based on the average
purchase price per share at which such stock is traded during the five days
immediately prior to the Closing.  In addition, THI shall issue an additional
30,000 shares and 30,000 shares to Scarbrough and Davis respectively which
shares shall constitute full satisfaction of the loans from Scarbrough and Davis
to FRESH.  Except as otherwise expressly provided in this Agreement, none of
such shares shall be registered.  All of the THI shares shall be duly
authorized, validly issued, fully paid, nonassessable, and free of preemptive
rights.  THI acknowledges that Goldrich is a third party beneficiary to this
Agreement. Except as otherwise expressly provided for in this Agreement,
certificates evidencing the shares of THI common stock to be issued hereunder
shall have stop transfer orders placed against them on the books of THI's
transfer agent and each shall bear substantially the following legend:

     "The securities represented by this Certificate were acquired on
     _________________________ without registration under the Securities Act of
     1933, as amended, or any applicable state securities law.  No transfer,
     sale or other disposition of these securities or any interest therein may
     be made except under an effective registration statement under said Act
     covering such securities unless the Corporation has received an opinion of
     counsel satisfactory to it that such transfer or resale does not require
     registration under said Act."

     4.   CLOSING
          -------

     4.1  Closing and Closing Date.  Subject to the provisions of this
Agreement, the consummation of the transactions contemplated by this Agreement
(the "Closing") shall be held at the offices of Terrace Holdings, Inc., 4100
North Hills Drive, Hollywood, Florida, at 10:00 a.m. (local time), ___________,
1997, or at such later date, place or time as the parties shall otherwise
mutually agree upon (the date of the Closing being referred to herein as the
"Closing Date"), but shall be deemed effective as of June 30, 1997, 

                                       3
<PAGE>
 
or such later month end as immediately precedes any Closing Date subsequent to
June 30, 1997 ("Effective Date"). All Closing transactions shall be deemed to
take place simultaneously, and no Closing transaction shall be deemed
consummated until all transactions to take place at the Closing have been
consummated. The actions and documents necessary for the consummation of
transactions contemplated by this Agreement shall be set forth in the Closing
Memorandum attached hereto as Exhibit 4.1.

     5.  REPRESENTATIONS AND WARRANTIES OF SELLERS
         -----------------------------------------

     As an inducement to THI to enter into this Agreement and perform its
obligations hereunder, SELLERS hereby represent and warrant to THI as follows,
each of which representation and warranty is material and is being relied upon
by THI, and each of which is true as of the date hereof and shall be true as of
the Closing, with the same effect as if said representations and warranties had
been made at and as of the Closing Date:

     5.1  Organization, Good Standing, Power, Etc.  FRESH is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. FRESH is authorized or licensed to do business as a foreign corporation
and is in good standing in each jurisdiction (set forth in Exhibit 5.1) in which
the character and location of its Assets or the nature of the business
transacted by FRESH makes such qualification necessary. FRESH has all requisite
corporate power and authority to (i) execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby and (ii) to own or lease and operate its properties and assets, and carry
on its business as it is presently being conducted.

     5.2  Capital Stock.
          ------------- 

     (a)  FRESH has authorized capital stock consisting of One Thousand (1,000)
shares of common stock, $1.00 par value, of which Three Hundred (300) shares,
(Two Hundred (200) shares after giving effect to that certain Stock Redemption)
are issued and outstanding, all of which are duly authorized, validly issued,
fully paid, nonassessable, free of preemptive rights, and were issued in
compliance with all federal and applicable state securities laws.

     (b)  Except as set forth in Exhibit 5.2 hereof, there are no outstanding
offers, options, warrants, rights, calls, commitments, obligations (verbal or
written), conversion rights, plans or other agreements (conditional or
unconditional) of any character providing for, requiring or permitting the
offer, sale, purchase or issuance of any shares of capital stock of FRESH or any
other securities (as such term is defined in the Securities Act of 1933,

                                       4
<PAGE>
 
as amended). Except as set forth in Exhibit 5.2, there are no equity securities
of the Company that are reserved for issuance or are outstanding.

     (c)  SELLERS own all of the capital stock of FRESH free and clear of all
liens, charges, encumbrances or claims of any kind whatsoever.

     5.3  Articles of Incorporation and By-Laws.  Included in Exhibit 5.3 hereto
are correct and complete copies of the Articles of Incorporation of FRESH, as
amended to date, and the By-Laws of FRESH, as amended to date. Such Articles of
Incorporation and By-Laws are in full force and effect.

     5.4  Subsidiaries, Divisions and Affiliates.  Except as set forth on
Exhibit 5.4, there are no subsidiaries, divisions or Affiliates of FRESH. Except
as set forth on Exhibit 5.4, the business of FRESH has been conducted solely by
FRESH and not through any Affiliate, joint venture or other entity, person or
under any other name.

     5.5  Equity Investments.  Except as set forth in Exhibit 5.5, FRESH does
not own or have any rights to any equity interest, directly or indirectly, in
any corporation, partnership, joint venture, firm or other entity.

     5.6  Authorization of Agreement.  The execution, delivery and performance
of this Agreement has been, and the Ancillary Documents will be, duly and
validly executed and delivered by SELLERS. This Agreement constitutes a valid
and binding obligation of SELLERS enforceable in accordance with its terms,
except that such enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditor's rights generally.

     5.7  Effect of Agreement.  The execution, delivery and performance of this
Agreement by SELLERS, and the consummation by SELLERS of the transactions
contemplated hereby, will not, with or without the giving of notice and the
lapse of time, or both, (a) violate any provision of law, statute, rule,
regulation or executive order to which FRESH or SELLERS are subject; (b) violate
any judgment, order, writ or decree of any court applicable to FRESH or SELLERS;
or (c) result in the breach of or conflict with any term, covenant, condition or
provision of, result in the modification or termination of, constitute a default
under, or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon the Stock pursuant to, any corporate charter, by-law,
commitment, contract or other agreement or instrument, including any of the
Liabilities, to which FRESH or SELLERS are a party or by which any of the Assets
is or may be bound or affected or from which FRESH derives benefit, which

                                       5
<PAGE>
 
breach, conflict, modification, termination, default or encumbrance described in
this clause (c) would be material to the business of FRESH or any of the Stock.

     5.8  Restrictions; Burdensome Agreements.  FRESH or SELLERS are not a party
to any contract, commitment or agreement, nor are FRESH, the SELLERS or the
Stock subject to, or bound or affected by, any provision of the Articles of
Incorporation, By-laws or other corporate restriction, or any order, judgment,
decree, law, statute, ordinance, rule, regulation or other restriction of any
kind or character, which would, individually or in the aggregate, materially
adversely affect FRESH's business or any of the Stock.

     5.9  Governmental and Other Consents.  No consent, authorization or
approval of, or exemption by, any governmental or public body or authority is
required in connection with the execution, delivery and performance by SELLERS
of this Agreement or of any of the instruments or agreements herein referred to,
or the taking of any action herein contemplated.

     5.10  Financial Statements.  SELLERS have delivered to THI, and included in
Exhibit 5.10 hereto are, correct and complete copies of balance sheets of FRESH
for the periods ended September 30, 1997 and September 30,1996, the related
statements of income for the nine months ended September 30, 1997 and 1996,(the
"1997 Financial Statements") and balance sheets for the years ended December 31,
1996 and 1995 and the related statements of income for the years then ended
(collectively, with the 1997 Financial Statements, the "Financial Statements").
None of the Financial Statements have been audited. Except as set forth on the
compilation report of Jewett & DuBose, Certified Public Accountants, the
Financial Statements are in accordance with the books and records of FRESH, have
been prepared in accordance with generally accepted accounting principles and
practices consistently applied and accurately present the financial position of
FRESH at their respective dates and the results of operations for the respective
periods covered thereby and all items that could have a material adverse effect
on the willingness of a prospective purchaser to acquire the Stock have been
disclosed in the Financial Statements or in the Exhibits to this Agreement.

     5.11  Absence of Certain Changes or Events.  Except as set forth on Exhibit
5.11, since January 1, 1997, FRESH has not: suffered any adverse change in, or
the occurrence of any events which, individually or in the aggregate, has or
have had, or might reasonably be expected to have, a material adverse effect on,
FRESH's financial condition, results of operations or business or the value of
the Stock.

     5.12  Title to Stock; Absence of Liens and Encumbrances. Except as set
forth on Exhibit 5.12, (a) SELLERS have good title

                                       6
<PAGE>
 
to, and own outright, the Stock, free and clear of all claims, liens, charges,
encumbrances, security interests, restrictions on use or transfer or other
defects as to title; and (b) immediately following the Closing, THI will have
good and marketable title to all Stock, free and clear of all claims, liens,
charges, encumbrances, security interests, restrictions on use or transfer, or
other defects of any nature. The leases and other agreements or instruments
under which FRESH holds, leases or is entitled to the use of any real or
personal property (a correct and complete list of such leases and other
agreements or instruments being set forth on Exhibit 5.15.1) are in full force
and effect and all rentals, royalties or other payments accruing thereunder
prior to the date hereof have been duly paid. FRESH enjoys peaceable and
undisturbed possession under all such leases, and the change in ownership of the
Stock will not adversely affect such leases, other agreements and instruments.

     5.13  Equipment.  Set forth on Exhibit 1.3(c) is a correct and complete
list as of July 31, 1997 of all of the Equipment (as defined in Section 1.3(c)),
indicating for each piece of Equipment whether it is owned or leased and setting
forth where it is located. None of the Equipment has been disposed of since July
31, 1997. Except as noted on Exhibit 1.3(c), all of the Equipment (a) is in good
working condition, with, to the knowledge of SELLERS, no material defects, and
generally has been suitable to FRESH for the uses for which it was designed or
has been employed by FRESH, and (b) conforms in all material respects with any
laws, ordinances, regulations, orders or other similar governmental requirements
relating to its use, as the same are currently in effect.

     5.14  Insurance.  There are no outstanding or unsatisfied written
requirements or repeated verbal recommendations imposed or made by any of
FRESH's current insurance companies with respect to current policies covering
any of the assets of FRESH, or by any governmental authority requiring or
recommending, with respect to any of FRESH's assets, that any repairs or other
work be done on or with respect to, or requiring or recommending any equipment
or facilities be installed on or in connection with, any of the assets of FRESH.
FRESH carries, and (with respect to any period for which a claim against FRESH
may still arise) has always carried product liability insurance, worker's
compensation insurance in reasonable amounts, and other insurance which is
reasonably necessary to the conduct of the FRESH's business. On Exhibit 5.14 is
set forth a correct and complete list of (a) all currently effective insurance
policies and bonds covering the assets or the business of FRESH, and their
respective annual premiums (as of the last renewal or purchase of new
insurance), and (b) for the five-year period ending on the date hereof, (i) all
accidents, casualties or damage occurring on or to the assets or relating to the
business or products of FRESH which in the aggregate are in excess or One
Thousand Dollars ($1,000.00), and (ii) claims for product

                                       7
<PAGE>
 
liability, damages, contribution or indemnification and settlements (including
pending settlement negotiations) relating thereto which in the aggregate are in
excess of one Thousand Dollars ($1,000.00). Except as set forth on Exhibit 5.14,
as of the date hereof there are no disputes with underwriters of any such
policies or bonds, and all premiums due and payable have been paid. There are no
pending or threatened terminations or premiums increases with respect to any of
such policies or bonds and there is no condition or circumstance applicable to
the business of FRESH, other than the sale of the Common Stock pursuant to this
Agreement, which may result in such termination or increase. SELLERS and FRESH
are in compliance with all conditions contained in such policies or bonds,
except for non-compliance which, individually or in the aggregate, would not
have a material adverse affect on the business of FRESH.

     5.15  Agreements, Arrangements, Etc.
           ----------------------------- 

     5.15.1  Except as set forth on Exhibit 5.15.1, SELLERS and FRESH are not a
party to, nor are FRESH or SELLERS bound by any:

          (a)  lease agreement (whether as lessor or lessee);

          (b)  license agreement, assignment or contract (whether as licensor or
     licensee, assignor or assignee) relating to trademarks, trade names,
     patents, or copyrights (or applications therefor), unpatented designs or
     processes, formulae, know-how or technical assistance, or other proprietary
     rights;

          (c)  employment or other contract or agreement with an employee or
     independent contractor which (i) may not be terminated without liability to
     FRESH upon notice to the employee or independent contractor of not more
     than 30 days, or (ii) provides payments (contingent or otherwise) of more
     than $10,000 per year (including all salary, bonuses and commissions);

          (d)  agreement, contract or order with any buying agent, supplier or
     other individual or entity who assists, provides or is otherwise involved
     in the acquisition, supplying or providing assets or other goods to FRESH;

          (e)  non-competition, secrecy or confidentiality agreements;

          (f)  agreement or other arrangement for the sale of goods or services
     by FRESH to any third party (including the government or any other
     governmental authority);

          (g)  agreement with any labor union;

                                       8
<PAGE>
 
          (h)  policy of insurance (including bonds) in force with respect to
     FRESH or any of its operations, properties, assets or executive officers;

          (i)  agreement, contract or order with any distributor, dealer, sales
     agent or representative, other than contracts or orders for the purchase,
     sale or license of goods made in the usual and ordinary course of business
     at an aggregate price per contract or more than $1,000 and a term of more
     than six months under any such contract or order;

          (j)  agreement, contract or order with any manufacturer, supplier or
     customer (including those agreements which allow discounts or allowances or
     extended payment terms);

          (k)  agreement with any food distributor or brokerage company,
     management company or any other individual or entity who assists, places,
     brokers or otherwise is involved with the marketing or distribution of
     FRESH's products to its customers;

          (l)  joint venture or partnership agreement with any other person;

          (m)  agreement guaranteeing, indemnifying or otherwise becoming liable
     for the obligations or liabilities of another;

          (n)  agreement with any banks or other persons, other than its
     employees, for the borrowing or lending of money or payment or repayment of
     draws on letters of credit or currency swap or exchange agreements (other
     than purchase money security interests which may, under the terms of
     invoices from its suppliers, be granted to suppliers with respect to goods
     so purchased);

          (o)  agreement with any bank, finance company or similar organization
     which acquires from FRESH receivables or contracts for sales on credit;

          (p)  agreement granting any person a lien, security interest or
     mortgage on any of the assets of FRESH, including, without limitation, any
     factoring or agreement for the assignment of receivables or inventory;

          (q)  agreement for the incurrence of any capital expenditure in excess
     of $1,000;

          (r)  advertising, publication or printing agreement;

          (s)  agreement which restricts FRESH from doing business anywhere in
     the world;


                                       9

<PAGE>
 
          (t)  agreement or statute or regulation giving any party the right to
     renegotiate or require a reduction in prices or the repayment of any amount
     previously paid; or

          (u)  other agreement or contract, not included in or expressly
     excluded from the terms of the foregoing clauses (a) through (t),
     materially affecting FRESH's business, including trade and other payables
     and liabilities incurred in the ordinary course of business (all of which
     are set forth in the 1997 Financial Statements on Exhibit 5.10), except
     contracts or purchase orders for the purchase or sale of goods or services
     made in the usual and ordinary course of business.

Correct and complete copies of all Liabilities required to be shown on Exhibit
5.15.1 (or Exhibit 5.10) have been separately delivered to THI prior to the date
hereof.

     5.15.2  Each of the Liabilities is valid, in full force and effect and
enforceable by FRESH in accordance with its terms.

     5.15.3  Except as set forth on Exhibit 5.15.1, FRESH has fulfilled, or has
taken all action reasonably necessary to enable it to fulfill when due, all of
its obligations under the Liabilities, except where the failure to do so would
not, individually or in the aggregate, have a material adverse affect on the
business of FRESH. Furthermore, there has not occurred any default by FRESH or
any event which, with the lapse of time or the election of any person other than
FRESH, will become a default, nor has there occurred any default by others or
any event which, with the lapse of time or the election of FRESH, will become a
default under any of the Liabilities, except for such defaults, if any, which
(a) have not resulted and will not result in any material loss to or liability
of FRESH or any of its successors or assigns or (b) have been indicated on
Exhibit 5.15.1. FRESH is not in arrears in any material respect with respect to
the performance of satisfaction of the terms or conditions to be performed or
satisfied by it under any of the Liabilities and no waiver or variance has been
granted by any of the parties hereto.

     5.15.4  After the Closing, except as set forth on Exhibit 5.15.1, each of
the Liabilities does not require the consent of the other parties thereto and,
with respect to any of the Liabilities which do require the consent of the other
parties thereto, SELLERS have obtained such consent and has provided or will
provide THI with copies thereof.

     5.16  Patents, Trademarks, Copyrights, Etc.  Exhibit 1.3(d) sets forth (i)
the registered and beneficial owner and the expiration date, to the extent
applicable, for each of the Rights set forth on such Exhibit and (ii) the
product, service, or products or services of FRESH which make use of, or are
sold,


                                      10

<PAGE>
 
licensed or made under, each such Right. All of the Rights constitute all Rights
necessary for the conduct of the business of FRESH, as such business is
currently being conducted. Except as set forth on Exhibit 5.16, SELLERS have not
sold, assigned, transferred, licensed, sub-licensed or conveyed the Rights, or
any of them, or any interest in the Rights, or any of them, to any person, and
have the entire right, title and interest (free and clear of all security
interests, liens and encumbrances of every nature) in and to the Rights
necessary to the conduct of the business of FRESH as currently being conducted;
neither has the validity of such items been, nor is the validity of such items,
nor the use thereof by FRESH, the subject of any pending or threatened
opposition, interference, cancellation, nullification, conflict, concurrent use,
litigation or other proceeding. The conduct of the business of FRESH as
currently operated does not and will not conflict with, or infringe, legally
enforceable rights of third parties. Except as set forth on Exhibit 5.16, the
Rights owned by or licensed to FRESH have not been used, and no use is now being
made, by any entity except FRESH and other entities duly licensed to use the
same. Except as set forth on Exhibit 5.16, there is no infringement of any
proprietary right owned or licensed by FRESH.

     5.17  Permits, Licenses, Etc.  There are no permits, licenses,
registrations, memberships, orders or approvals of governmental or
administrative authorities or required to permit FRESH to carry on its business
as currently conducted (other than (i) permits, licenses, registrations, trade
memberships, orders or approvals which are set forth on Exhibit 5.17, all of
which are in full force and effect, and (ii) other permits, licenses, orders or
approvals, the failure to obtain which would not, individually or in the
aggregate, have a material adverse affect on FRESH's business).

     5.18  Compliance with Applicable Laws.  The conduct of FRESH of its
business does not violate or infringe, and there is no basis for any claims of
violation or infringement of, any law, statute, ordinance, regulation or
executive order (including, without limitation, the Federal Food, Drugs and
Cosmetics Act, as amended, the Occupational Safety and Health Act, the National
Environmental Policy Act, any federal agriculture law, or the Foreign Corrupt
Practices Act and the respective regulations thereunder and similar applicable
state laws and regulations, including but not limited to agriculture laws and
regulations) currently in effect, except in each case for violations or
infringements which do not and will not, individually or in the aggregate, have
a material adverse affect on or FRESH's business. FRESH is not in default under
any governmental or administrative registration, membership or license issued to
it, under any governmental or administrative order or demand directed to it, or
with respect to any order, writ, injunction or decree of any court which, in any
case, materially adversely affects the financial condition, results of
operations or business of FRESH or the value of the Stock.


                                      11

<PAGE>
 
     5.19  Litigation.  Except as set forth on Exhibit 5.19, there is no claim,
action, suit, proceeding, arbitration, reparation, investigation or hearing or
notice of hearing, pending or threatened, before any court or governmental,
administrative or other competent authority or private arbitration tribunal
against or relating to or affecting (directly or indirectly, including by way of
indemnification) the business of FRESH or the transactions contemplated by this
Agreement; nor are any facts known to FRESH, which it believes could reasonably
give rise to any such claim, action, suit, proceeding, arbitration,
investigation or hearing, which may have any adverse affect, individually or in
the aggregate in excess of One Thousand Dollars ($1,000) upon the business of
FRESH, the value of the Stock or the transactions contemplated by this
Agreement. FRESH has not waived any statute of limitations or other affirmative
defense with respect to any of its obligations. There is no continuing order,
injunction or decree of any court, arbitrator or governmental, administrative or
other competent authority to which FRESH is a party, or to which the Company is
subject. Neither SELLERS, FRESH nor any of its shareholders or current officer,
director, partner or employee of FRESH or any Affiliate of FRESH has been
permanently or temporarily enjoined or barred by order, judgment or decree of
any court or other tribunal or any agency or other body from engaging in or
continuing any conduct or practice in connection with the business engaged in by
FRESH. FRESH's worker's compensation experience rating for the five-year period
ending on the Closing Date is set forth in Exhibit 5.19.

     5.20  No Interest in Competitors.  Set forth on Exhibit 5.20 is a list
describing the extent to which SELLERS, FRESH, any of the shareholders or any
officer or director of FRESH or any Affiliate of any of the foregoing, directly
or indirectly, owns more than a five percent (5%) interest in or controls or is
an employee, officer, director, or partner of or participant in (but only to the
extent such a participation exceeds one percent), or consultant to any
corporation, partnership, company, limited partnership, joint venture,
association or other entity which is a competitor, supplier or customer of FRESH
or has any type of business or professional relationship with FRESH.

     5.21  Customers, Suppliers, Distributors and Agents.  Except as set forth
on Exhibit 5.21, SELLERS have no knowledge or reason to believe that any
customer, client, distributor, supplier or any other person or entity with
material business dealings with FRESH, will or may cease to continue such
relationship with FRESH, or will or may substantially reduce the extent of such
relationship, at any time prior to or after the Closing Date. Except for such
common public information, SELLERS have no knowledge of (1) any other existing
or contemplated modification or change in the business relationship of FRESH
with, or (2) any existing condition or state of facts or circumstances which has
affected adversely, will


                                      12

<PAGE>
 
adversely affect (in more than a minimal manner), or has a reasonable likelihood
of adversely affecting the business of FRESH with its customers, clients,
suppliers or other persons or entities with material business dealings with
FRESH or which has prevented or will prevent such business from being carried on
by FRESH under its new ownership after the Closing in essentially the same
manner as it is currently carried on. 

     5.22 Books and Records.  The books of account and other financial and
corporate records of FRESH are in all material respects complete, correct and up
to date, with all necessary signatures, and are in all material respects
accurately reflected in the Financial Statements.

     5.23  Employee Benefit Plans.  Except as described in Exhibit 5.23, FRESH
does not have any hospitalization, health insurance, pension, retirement, profit
sharing, stock option or similar plans. Exhibit 5.23 sets forth a correct and
complete list of each and every employee benefit plan, including each pension,
profit sharing, stock bonus, bonus, deferred compensation, severance, stock
option or purchase plan, or other retirement plan or arrangement, covering
employees of FRESH (the "Employee Benefit Plans").  For each such employee
pension plan, multi-employer plan or welfare plan as those terms are defined in
Section 3 of the Employee Retirement Income Security Act of 1974 ("ERISA") and
for each Employee Benefit Plan with respect to which FRESH is a "party in
interest" as defined in Section 3 of ERISA, or a "disqualified person" as
defined in Section 4975 of the Code, FRESH has delivered to THI complete and
accurate copies of (i) all Employee Benefit Plans and all amendments thereto;
(ii) the trust instrument or insurance contract, if any, forming a part of the
plans, and all amendments thereto; (iii) the most recent and preceding year's
Internal Revenue Service Form 5500 and all schedules thereto; (iv) the most
recent Internal Revenue Service determination letter, or if no letter has been
issued, any pending application to the Internal Revenue Service for a
determination letter regarding qualified status; (v) any bond required by
Section 412 of ERISA; and (vi) the summary plan description.  FRESH has complied
with all of the rules and regulations governing each of the Employee Benefit
Plans maintained for the benefit of FRESH's employees, including, without
limitation, rules and regulations promulgated pursuant to ERISA and the Code, by
the Department of Treasury, Department of Labor, and the Pension Benefit Plans
Guaranty Corporation, and each of the Employee Benefit Plans now operated has
since its inception been operated in accordance with its provisions and is in
compliance with such rules and regulations.  Neither SELLERS, FRESH nor any
Employee Benefit Plans maintained by FRESH or any fiduciaries thereof have
engaged in any prohibited transaction, as that term is defined in Section 406 of
ERISA or Section 4975 of the Code, nor have any of them committed any breach of
fiduciary responsibility with respect to any of the Employee Benefit Plans, 

                                      13
<PAGE>
 
and SELLERS do not have any knowledge that any other person has not complied
with these rules and regulations.

     5.24  Powers of Attorney.  Except as set forth on Exhibit 5.24, no person
has any power of attorney to act on behalf of SELLERS in connection with any of
FRESH's properties or business affairs other than such powers to so act as
normally pertain to the officers of FRESH.

     5.25   THIS PROVISION INTENTIONALLY LEFT BLANK

     5.26  Labor Disputes, Unfair Labor Practices.  Except as set forth on
Exhibit 5.26, FRESH is not engaged in any labor practice which would have a
material adverse affect on FRESH's business. There is no pending or
affirmatively threatened (i) unfair labor practice complaint, charge, labor
dispute, strike, slowdown, walkout or work stoppage before the National Labor
Relations Board or any other authority or (ii) grievance or arbitration
proceeding arising out of or under a collective bargaining agreement involving
employees of FRESH. There have been no strikes, labor disputes, slow-downs,
walkouts, or work stoppages involving employees of FRESH during the last five
(5) years. No union representation question exists with respect to the employees
of FRESH and no union organizing activities are taking place. FRESH has not
received notice from any of its employees of such employee's intent to terminate
his or her employment or bring any action against FRESH for any reason related
to the transactions contemplated by this Agreement or for any other reason.

     5.27  Past Due Obligations.  Except as set forth on Exhibit 5.27, no past
due obligations of FRESH over $500 have given rise or shall give rise within 6
months after the Closing Date (except as such will be performed by FRESH prior
to the Closing so as to relieve THI of all liability therefor) to any additional
liability to THI on account of their being past due.

     5.28  Environmental Compliance.  Except as set forth in Exhibit 5.28, (i)
SELLERS have not generated, used, transported, treated, stored, released or
disposed of, nor has suffered or permitted anyone else to generate, use,
transport, treat, store, release or dispose of any Hazardous Substance in
violation of any laws or governmental regulation; (ii) there has not been any
generation, use, transportation, treatment, storage, release or disposal of any
Hazardous Substance in connection with the conduct of the business of FRESH or
the use of any property, facility of FRESH or to the knowledge of SELLERS any
nearby or adjacent properties or facilities, which has created or might
reasonably be expected to create any liability under any laws or governmental
regulation or which would require reporting to or notification of any
governmental entity; (iii) no asbestos or polychlorinated biphenyl or
underground storage tank is contained in or located at 

                                      14
<PAGE>


any facility of FRESH; and (iv) any Hazardous Substance handled or dealt with in
any way in connection with the business of FRESH has been and his being handled
or dealt with in all respects in compliance with applicable local, state and
federal laws. For purposes of this Section, "Hazardous Substance" means (but
shall not be limited to) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable Laws as "hazardous substances",
"hazardous materials", "hazardous wastes" or "toxic substances", or any other
formulation intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, toxicity or "EP
toxicity", and petroleum and drilling fluids, produced waters and other wastes
associated with the exploration, development, or production or crude oil,
natural gas or geothermal energy.

     5.29  Tax and Other Returns and Reports.  With respect to FRESH, SELLERS
have timely filed or will file all federal, state and local tax returns and
information returns ("Tax Returns") required to be filed by them and have paid
all taxes due for all periods ending on or before December 31, 1996.  Adequate
provision has been made in the books and records of FRESH and in the Financial
Statements referred to in Section 5.10 above for all taxes whether or not due
and payable and whether or not disputed. Exhibit 5.29.A lists the date or dates
through which the IRS and any other governmental entity have examined the United
States federal income tax returns or information returns and any other Tax
Returns of FRESH and of SELLERS as they may affect FRESH.  All required Tax
Returns, including amendments to date, have been prepared in good faith without
negligence or willful misrepresentation and are complete and accurate and in all
material respects.  Except as set forth in Exhibit 5.29.B, no governmental
entity has, during the past three years, examined or is in the process of
examining any Tax Returns of FRESH or SELLERS as they may affect FRESH.  Except
as set forth on Exhibit 5.29.C, no Governmental Entity has proposed (tentatively
or definitively), asserted or assessed or threatened to propose or assert, any
deficiency, assessment, lien, or other claim for taxes and there would be no
basis for any such delinquency, assessment, lien or claim.  There are no
agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency against FRESH or SELLERS
as they may affect FRESH or with respect to any Tax Return filed or to be filed
by FRESH.

     5.30  Recent Dividends and Other Distributions.  Except as provided in that
certain Stock Redemption, there has been no dividend or other distribution of
assets or securities by FRESH, whether consisting or money, property or any
other thing of value, declared, issued or paid to or for the benefit of FRESH's
shareholders subsequent to the date of the most recent financial statements
described in Section 5.10.

                                      15
<PAGE>
 
     5.31 Inventory. Except as set forth in Exhibits 5.31A and B, all of the
Inventory has been received within four months of June 30, 1997 and is of a
quantity and quality saleable at regular prices or usable in the ordinary course
of business during 1997. Exhibit 5.31A shall specify all Inventory that was
received more than four months before the Closing Date, including the calendar
month in which such Inventory was received, by quantity and product family.
Exhibit 5.31B shall specify all Inventory which is not of a quality or quantity
saleable or usable in the ordinary course of business.

     5.32 Purchase and Sale Obligations. All purchase, sales and orders and all
other commitments for purchases, sales and orders made by or on behalf of FRESH
have been made in the usual and ordinary course of its business in accordance
with normal practices. On the Closing Date, SELLERS shall deliver to THI a
schedule of all such uncompleted purchase and sale orders and other commitments
with respect to any of FRESH's obligations as of a date not earlier than ten
(10) days prior to the Closing.

     5.33 Other Information. None of the information which has been or may be
furnished by SELLERS or any of their representatives to THI or any of its
representatives in connection with the transactions contemplated hereby, which
is contained in this Agreement (including the Exhibits hereto) or any Ancillary
Document or any certificate or instrument delivered or to be delivered by or on
behalf of FRESH in connection with the transactions contemplated hereby, does or
will contain any untrue statement of a material fact or omit a material fact
necessary to make the information contained herein or therein not misleading.

     5.34 Knowledge of SELLERS. As to each representation and warranty made by
SELLERS under this Article 5, any fact or information known to any shareholder
of FRESH or notice received by any shareholder of FRESH, shall be imputed to
SELLERS as if such fact or information were known to SELLERS or such notice
received by SELLERS.

     6.   REPRESENTATIONS AND WARRANTIES OF THI
          -------------------------------------

     THI hereby represents and warrants to SELLERS as follows, each of which
representation and warranty shall be true as of the Closing Date:

     6.1 Organization. THI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. THI has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby.


                                      16
<PAGE>
 
     6.2 Authorization of Agreement. The execution, delivery and performance of
this Agreement by THI, and the consummation of the transactions contemplated
hereby have been duly and effectively authorized by THI's Board of Directors.
Subject to Section 6.5, this Agreement has been duly and validly authorized,
executed and delivered on behalf of THI. Subject to Section 6.5, this Agreement
constitutes a valid and binding obligation of THI, enforceable in accordance
with its terms, except that such enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors, rights
generally.

     6.3 Effect of Agreement. The execution, delivery and performance of this
Agreement by THI and consummation by THI of the transactions contemplated hereby
will not, with or without the giving or notice and the lapse of time, or both,
(a) violate any provision of law, statute, rule, regulation or executive order
to which the THI is subject; (b) violate any judgment, order, writ or decree of
any court applicable to THI; or (c) result in the breach of or conflict with any
term, covenant, condition or provision of the Certificate of Incorporation of
THI or any commitment, contract or other agreement on instrument to which THI is
a party.

     6.4 Litigation. To the best knowledge of THI, there are no actions, suits,
proceedings or governmental investigations or inquiries pending or threatened
against it which, in its reasonable judgment, would prevent the consummation of
the transactions contemplated hereby.

     6.5 Possible Submission to Stockholder Vote. THI has been advised that the
transactions contemplated herein need not be submitted to its stockholders for
approval. If, prior to Closing, THI is otherwise advised by counsel, it will so
notify SELLERS forthwith. As soon as is practicable thereafter, and consistent
with applicable state corporate and federal securities law and regulation, the
transactions contemplated in this Agreement shall be disclosed and submitted to
the Terrace stockholders to consider and vote thereon. SELLERS hereby agree
fully to cooperate with THI and provide all reasonable assistance and
documentation as may be necessary for THI full to comply with the applicable
requirements under the proxy rules promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, and under the
applicable requirements of the NASDAQ Stock Market.

     7.  POST-CLOSING COVENANTS
         ----------------------

     7.1. Further Assurances. SELLERS, at the request of THI, shall execute,
acknowledge and deliver to THI, without further consideration, all such further
assignments, conveyances, endorsements, deeds, powers of attorney, consents and
other documents (together with the instruments referred to in Section 1.3,
referred to herein collectively as the "Ancillary Documents")

                                      17
<PAGE>
 
and take such other action as THI may reasonably request (a) to transfer to and
fully vest in THI, and protect THI's right, title and interest in and to all of
SELLERS' rights, titles and interests in and to the Stock, and (b) otherwise to
consummate the transactions contemplated by this Agreement.

          7.1.1 THI will provide to the SELLERS reasonable access to any records
     of FRESH's business which is in THI's possession and which will assist
     SELLERS in responding to or complying with any tax audit or other
     governmental inquiry or which may be necessary in connection with any
     litigation by or against SELLERS and relating thereto.

          7.1.2 THI will use its best efforts to maintain licenses under the
     Perishable Agricultural Commodity Act, 1930, as amended. Notwithstanding
     the foregoing, SELLERS as employees of THI's subsidiaries, shall have
     primary responsibility for the foregoing.

          7.1.3 After the Closing, THI shall not acquire or establish a business
     which competes with that of FRESH, unless such business is made a part of
     FRESH, during the term of the Employment Agreements of Scarbrough and
     Davis.

          7.1.4 After the Closing, THI will use its best efforts to secure the
     release of any personal guarantees which Davis or Scarbrough have given
     directly related to any of the Liabilities. If, notwithstanding its best
     efforts, THI is unable to secure the release of any such personal
     guarantees, THI agrees to indemnify and hold Davis and Scarbrough harmless
     from any claims arising under such personal guarantees under Section 12.3.

     7.2 Confidentiality. SELLERS shall use its best efforts to keep
confidential any and all information concerning THI and its principals and
Affiliates, except for information that may be available from sources generally
available to the public. If for any reason the Closing shall not occur, SELLERS
will continue to use its best efforts to keep the information concerning THI and
its principals and Affiliates confidential and will not use it for any purpose
and will return to THI all documents or other written materials and any copies
thereof obtained or made by it during the course of the negotiations concerning
THI and its principals and Affiliates.

     7.3 Cooperation. SELLERS shall cooperate with THI in arranging or
participating in meetings between THI and employees, suppliers, customers,
agents, distributors and others who have or have had a business relationship
with SELLERS or FRESH, at times that are non-injurious in a material way to the
operations of FRESH.

                                      18
<PAGE>
 
     8.  CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THI
         ----------------------------------------------

     The obligations of THI pursuant to this Agreement are subject to the
satisfaction at the Closing of each of the following conditions, any or all of
which conditions may be waived by THI in its sole discretion:

     8.1 Accuracy of Representations and Warranties. All representations and
warranties made by SELLERS (contained in this Agreement, any Exhibit or Schedule
hereto, or any certificate or instrument delivered to THI or its representatives
by SELLERS or their representatives) shall be true on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date
(i.e., with respect to representations that a state of facts exists on or as of
the date hereof, it is a condition that such state of facts exists on or as of
the Closing Date; and with respect to a representation that a state of facts has
or has not changed between a date prior to the date hereof and the date hereof,
it is a condition that such state of facts has or has not changed between such
prior date and the Closing Date), except as affected by transactions
contemplated hereby.

     8.2 Performance of Agreements. SELLERS and FRESH shall have performed and
complied with all covenants, obligations and agreements, including but not
limited to those set forth this Agreement, to be performed or complied with by
them on or before the Closing Date pursuant to this Agreement.

     8.3  Litigation, Etc.
          --------------- 

          8.3.1 Except as set forth on Exhibit 5.19A, no claim, action, suit,
     proceeding, arbitration, investigation or hearing or note of hearing shall
     be pending or threatened against or affecting THI, SELLERS or FRESH which
     (a) might result either in an action or enjoin or prevent the consummation
     of the transactions contemplated by this Agreement; (b) in the reasonable
     judgment of THI would materially adversely affect the business of FRESH or
     the ability of THI to consummate the transactions contemplated by this
     Agreement or to operate the business of FRESH.

          8.3.2 SELLERS and FRESH shall not be in violation of any law, statute,
     ordinance, rule, regulation or executive order, the enforcement of which
     would, individually or in the aggregate, materially adversely affect the
     business of FRESH; or which would individually or in the aggregate,
     materially adversely affect the ability of THI to consummate the
     transactions contemplated by this Agreement or to own the Common Stock or
     to operate the business of FRESH.


                                      19
<PAGE>
 
          8.3.3  No law, regulation or decree shall have been proposed, adopted
     or promulgated, or have become effective, the enforcement of which would
     materially adversely affect the ability of THI to consummate the
     transactions contemplated by this Agreement or to own the Common Stock or
     to operate any such business.

     8.4  Approvals and Consents.  SELLERS shall have obtained, and THI shall
have received copies of, all of the approvals and consents required by this
Agreement, each of which approvals and consents shall be in full force and
effect and reasonably satisfactory in form and substance to THI and its counsel.

     8.5.  Shareholders' Certificate.  THI shall have received an accurate
certificate of the SELLERS dated the Closing Date, satisfactory in form and
substance to THI and its counsel, certifying (a) as to the fulfillment of the
matters specified in Sections 10.1 through 10.3.

     8.6  Officer's Certificate.  THI shall have received an accurate
certificate, dated the Closing Date, of the President of FRESH, dated as of the
Closing Date, stating, among other things, that he is not aware of any material
omissions or facts that would materially alter any of the Financial Statements,
nor is he aware of any facts or factors that are reasonably likely to occur, or
if known to other parties, that could have a material adverse effect on the
financial condition, business, operations, assets, liabilities, management or
prospects of FRESH.

     8.7  Good Standing Certificates.  THI shall have received (a) a certificate
of the Secretary of State of Florida, dated within 30 days before the Closing
Date, certifying that the records of such state regarding FRESH incorporated in
such state reflect neither a certificate of dissolution, a court order declaring
dissolution, a merger or consolidation which terminated its existence, nor
suspension of its corporate powers, rights and privileges, and that in
accordance with the records of such state, such corporation is authorized to
exercise all of its corporate powers, rights and privileges in such state and
(b) a telegram or other document from one or more appropriate officials of the
State of Florida or an affidavit of counsel with respect to telephone
conversations with such officials, dated within two days before the Closing
Date, to the same effect.

     8.8  No Material Adverse Change.  THI shall confirm to its sole
satisfaction that there have been no material adverse changes in the financial
condition, business, operations, assets, liabilities, management or prospects of
FRESH, and that the unaudited Total Stockholders' Equity of FRESH as of June 30,
1997 is no less than its audited Total Stockholders' Equity as of December 31,
1996.

                                      20
<PAGE>
 
     8.9  Actions, Proceedings, Etc.  All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement
shall have been completed in a manner reasonably satisfactory to THI, such
approval not to be unreasonably withheld.

     8.10  Opinion of Counsel to FRESH.  THI shall have received an opinion of
Messrs. Katz and Mestre, counsel to FRESH, addressed to THI, dated the Closing
Date, to the effect set forth in, and substantially in the form, of Exhibit
10.10.

     8.11  Licenses, Permits, Consents, Etc.  THI shall have received evidence,
in form and substance reasonably satisfactory to counsel for THI, that such
licenses, permits, consents, approvals, authorizations or orders of governmental
authorities as are necessary to the consummation of the transactions
contemplated by this Agreement and the continued operation of the business of
FRESH have been obtained.

     8.12  Documentation of Rights.  SELLERS shall have delivered to THI true
and complete copies of all of the documentation held by SELLERS relating to each
of the Rights.

     8.13  Officers' Financial Certificate.  THI shall have received an accurate
certificate as set forth in Exhibit 10.14 from the President and Secretary of
FRESH, dated as of the Closing Date, satisfactory in form and substance to THI
and its counsel, certifying that the 1996 Financial Statements are true and
correct, and accurately present the financial position of FRESH during that
interim period.

     8.14  Accountants Letter.  THI shall have received to THI's sole
satisfaction a "comfort" letter as set forth in Exhibit 10.15 from Jewett &
DuBose, independent certified public accountants for FRESH, dated as of the
Closing Date, stating, among other things, that such accountants are not aware
of any material omissions or facts that would materially alter any of the
Financial Statements, nor are they aware of any as of the Closing Date, or the
breach of any agreement, covenant or condition required by this Agreement to be
performed or complied with by SELLERS prior to the Closing Date.

     8.15  Completion of Due Diligence.  To THI's sole satisfaction, THI shall
have received sufficient information and access to such information on a timely
basis regarding FRESH.

     9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF FRESH
        ------------------------------------------------

     The obligations of SELLERS under this Agreement are subject to the
satisfaction at the Closing of each of the following conditions, any or all of
which conditions may be waived by SELLERS in their sole discretion.

                                      21
<PAGE>
 
     9.1  Accuracy of Representations and Warranties.  All representations and
warranties by THI in this Agreement shall be true as of the Closing Date with
the same force and effect as though made on and as of the Closing Date.

     9.2  Performance of Agreements.  THI shall have performed and complied in
all material respects with all covenants, obligations and agreements to be
performed or complied with by it on or before the Closing Date pursuant to this
Agreement.

     9.3  Secretary's Certificate.  SELLERS shall have received a certificate
from THI, substantially in the form of Exhibit 11.3, dated the Closing Date.

     9.4  Actions, Proceedings, Etc.  All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement
shall have been completed in a manner reasonably satisfactory to SELLERS and
approved by its counsel, including but not limited to (i) securing the
appropriate approval(s) and/or license(s) under the Perishable Agricultural
Commodities Act, 1930, as amended, and (ii) the affirmative vote of a majority
of the THI shareholders voting at a meeting called for such purpose, if required
under advice from THI's counsel; and such counsel to FRESH shall have been
furnished with such other instruments and documents as they shall have
reasonably requested.

     9.5  No Injunction.  No third party injunction, stay or restraining order
shall be in effect prohibiting the consummation of the transactions contemplated
hereby.

     9.6  Opinion of Counsel to Buyer.  SELLERS shall have received an opinion
of Fishman & Merrick, P.C., counsel to THI, addressed to SELLERS, dated as of
the Closing Date, to the effect set forth in, and substantially in the form, of
Exhibit 11.6.

     10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
         -----------------------------------------------------------

     10.1  Survival.  The representations and warranties set forth in this
Agreement, in any Exhibit or Schedule hereto and in any certificate or
instrument delivered in connection herewith shall survive for a period of two
(2) years after the Closing Date and shall thereupon terminate and expire and
shall be of no force or effect thereafter, except (i) with respect to any
material claim, written notice of which shall have been delivered to THI or
SELLERS, as the case may be, such claim shall survive the termination of such
period and shall survive for as long as such claim is unsettled, and (ii) with
respect to any litigation which shall have been commenced to resolve such claim
on or prior to such

                                       22
<PAGE>
 
date. Notwithstanding the foregoing, with respect to taxes, the period shall be
the applicable statute of limitations, and with respect to customer claims, the
period shall be five (5) years. For purposes hereof, a material claim shall mean
a claim or claims aggregating $25,000 or more, individually or in the aggregate.

     10.2  Indemnification by SELLERS.  Subject to the limitations set forth in
the last sentence of Section 10.1, SELLERS hereby covenant and agree with THI
that, regardless of any investigation made at any time by or on behalf of THI or
any information THI may have and, regardless of the Closing hereunder, SELLERS
shall indemnify THI and FRESH and its respective directors, officers, employees,
representatives and Affiliates of THI, and each of their successors and assigns
(individually, a "THI Indemnified Party"), and hold them harmless from, against
and in respect of any and all costs, losses, claims, liabilities, fines,
penalties, damages and expenses (including interest which may be imposed in
connection therewith, court costs and reasonable fees and disbursements of
counsel) incurred by any of them resulting from (i) FRESH, or the conduct of its
operations prior to the Closing, except for Liabilities specifically assumed by
THI under the provisions hereof, and (ii) any misrepresentation, breach of
warranty or nonfulfillment of any agreement, covenant or obligation by SELLERS
made in this Agreement (including without limitation any Exhibit hereto and any
certificate or instrument delivered in connection herewith) any taxes of any
kind whatsoever, or expenses, interest or penalties relating thereto, including
those that arise out of or result from the transactions contemplated by this
Agreement, other than taxes relating to the conduct of the business of FRESH
after the Closing Date.

     If, by reason of the claim of any third party relating to any of the
matters subject to indemnification under this Section 10.2, a lien, attachment,
garnishment or execution is placed upon any of the property or assets of any THI
Indemnified Party, SELLERS shall promptly furnish an indemnity bond reasonably
satisfactory to THI to obtain the prompt release of such lien, attachment,
garnishment or execution. THI shall be entitled to reduce any amounts it owes to
SELLERS against any amount owed to it by SELLERS under this Section 10.2.

     10.3  Indemnification by THI.  Subject to the limitations set forth in the
last sentence of Section 10.1, THI hereby covenants and agrees with SELLERS that
THI shall indemnify SELLERS and holds them harmless from, against and in respect
of any and all costs, losses, claims, liabilities, fines, penalties, damages and
expenses (including interest which may be imposed in connection therewith and
court costs and reasonable fees and disbursements of counsel) incurred by any of
them resulting from (i) the conduct of the operations of FRESH subsequent to the
Closing, and (ii) any misrepresentation, breach of warranty or the
nonfulfillment of any

                                      23
<PAGE>
 
agreement, covenant or obligation by THI made in this Agreement (including
without limitation any Exhibit hereto and any certificate or instrument
delivered in connection herewith).

     If, by reason of the claim of any third party relating to any of the
matters subject to indemnification under this Section 10.3, a lien, attachment,
garnishment or execution is placed upon any of the property or assets of any
FRESH Indemnified Party, THI shall promptly furnish an indemnity bond reasonably
satisfactory to SELLERS to obtain the prompt release of such lien, attachment,
garnishment or execution. SELLERS shall be entitled to reduce any amounts it
owes to THI in the amount owed to it by THI under this Section 10.3.

     10.4  Right to Defend.  If the facts giving rise to any such
indemnification shall involve any actual claim or demand by any third party
against a THI Indemnified Party or SELLERS (referred to hereinafter as an
"Indemnified Party"), the indemnifying parties shall be entitled to notice of
and entitled (without prejudice to the right of any Indemnified Party to
participate at its own expense through counsel of its own choosing) to defend or
prosecute such claim at their expense and through counsel of their own choosing
if they give written notice of their intention to do so no later than the time
by which the interest of the Indemnified Party would be materially prejudiced as
a result of its failure to have received such notice; provided, however, that if
the defendants in any action shall include both the indemnifying parties and an
Indemnified Party, and the Indemnified Party shall have reasonably concluded
that counsel selected by the indemnifying parties has a conflict of interest
because of the availability of different or additional defenses to the
Indemnified Party, the Indemnified Party shall cooperate fully in the defense of
such claim and shall make available to the indemnifying parties pertinent
information under its control relating thereto, but shall be entitled to be
reimbursed, as provided in this Article 10, for all costs and expense incurred
by it in connection therewith.

     10.5  Subrogation.  If the Indemnified Party receives payment or other
indemnification from the indemnifying party hereunder, the indemnifying party
shall be subrogated to the extent of such payment or indemnification to all
rights in respect of the subject matter of such claim to which the Indemnified
Party may be entitled, to institute appropriate action for the recovery thereof,
and the Indemnified Party agrees reasonably to assist and cooperate with the
indemnifying party at no expense to the Indemnified Party in enforcing such
rights.

                                      24
<PAGE>
 
     11.  MISCELLANEOUS
          -------------

     11.1  Expenses.  Except as and to the extent otherwise provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, SELLERS and THI shall each pay their own respective expenses and
the fees and expenses of their respective counsel and other experts.

     11.2  Waivers.  No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or in any other documents. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. Any party
hereto may, at or before the Closing, waive any conditions to its obligations
hereunder which are not fulfilled.

     11.3  Binding Effect; Benefits.  This Agreement shall inure to the benefit
of the parties hereto and shall be binding upon the parties hereto and their
respective successors and assigns. Except as otherwise set forth herein, nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement.

     11.4  Assignment.  Without limitation, and without the consent, prior,
written or otherwise, of SELLERS, this Agreement and all of the rights and
obligations hereunder may be assigned by THI to any entity owned or controlled
by, or affiliated with it. SELLERS shall consent in writing to any such
assignment. Immediately upon such assignment, THI shall be released from any
obligation, of any kind or nature, under this Agreement.

     11.5  Notices.  All notices, requests, demands and other communications
which are required to be or may be given under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or
upon receipt when transmitted by facsimile or telex or after dispatch by
certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:

     If to THI, to:

          Terrace Holdings, Inc.
          4100 North Hills Drive
          Hollywood, Florida  33312
          Facsimile:  (954) 894-0993

                                      25
<PAGE>
 
     With a copy to:

          Gerald L. Fishman, Esq.
          Fishman, Merrick, Miller, Genelly,
          Springer, Klimek & Anderson, P.C.
          30 North LaSalle Street
          Suite 3500
          Chicago, Illinois 60602
          Facsimile: (312) 726-2649

     If to SELLERS, to:

          Virgil Scarbrough
          4322 N.W. 88 Terrace
          Coral Springs, FL 33065

          Scott Davis
          6445 N.W. 72 Way
          Parkland, FL 33067

     With a copy to:

          Richard L. Katz, Esq.
          Katz & Mestre
          2100 Salzedo Street
          Suite 300
          Coral Gables, Florida  33134
          Facsimile:  (305) 447-8509

     11.6  Entire Agreement.  This Agreement (including the Exhibits hereto) and
the Ancillary Documents constitute the entire agreement and supersede all prior
agreements and understandings, oral and written, among the parties hereto with
respect to the subject matter hereof and supersede all prior agreements,
representations, warranties, statements, promises and understandings, whether
written or oral, with respect to the subject matter hereof. No party hereto
shall be bound by or charged with any written or oral arguments,
representations, warranties, statements, promises or understandings no
specifically set forth in this Agreement or in any Exhibit hereto or any
Ancillary Documents, or in certificates and instruments to be delivered pursuant
hereto on or before the Closing.

     11.7  Headings; Certain Terms.  The section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement. As used in this Agreement, the term "including" means "including, but
not limited to" unless otherwise specified; the word "or" means "and/or," and

                                      26
<PAGE>
 
the word "person" means and refers to any individual, corporation, trust,
partnership, joint venture, government or governmental authority, or any other
entity; and the plural and singular forms are used interchangeably.

     11.8  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when executed, shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.

     11.9  Governing Law.  This Agreement shall be construed in accordance with
the laws of the State of Florida, without giving effect to the choice of law
principles or rules thereof.

     11.10  Severability.  If any term or provision of this Agreement shall to
any extent be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each term and provision of the agreement shall be
valid and enforced to the fullest extent permitted by law.

     11.11  Amendments.  This Agreement may not be modified or changed except by
an instrument or instruments in writing signed by the party or parties against
whom enforcement of any such modification or amendment is sought.

     11.12  Transaction Taxes.  THI shall pay any and all taxes imposed upon the
initial issuance, and SELLERS shall pay any and all taxes imposed upon any
subsequent sale and exchange of the Common Stock and transfer of ownership
thereof.

     11.13  Disclosures.  Any disclosure by either party hereto pursuant to any
specific provision of this Agreement shall be deemed a disclosure for all other
purposes of this Agreement.

     11.14  Section References.  All references contained in this Agreement to
any section number are references to sections of this Agreement unless otherwise
specifically stated.

     11.15  Brokers and Finders.  Each party represents and warrants there are
no brokers, finders or similar persons to whom compensation will be due or owing
as a result of consummation of the transactions contemplated by this Agreement
and each party hereby agrees to indemnify and hold the other party harmless
against any such claims.

                                      27
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have signed this Agreement, or have
caused this Agreement to be signed in their respective names by an officer
thereunder duly authorized, as of the date first above written.


                                       TERRACE HOLDINGS, INC.


                                       By:
                                           -------------------------------------
                                           Samuel J. Lasko, President


                                           -------------------------------------
                                           Virgil Scarbrough


                                           -------------------------------------
                                           Scott Davis

                                      28