SECURITIES PURCHASE AGREEMENT



                                     between



                        WESTREC MARINA MANAGEMENT, INC.,


                                       and


                             COMMERCIAL ASSETS, INC.




                         Shares of Class A Common Stock

                         Shares of Class B Common Stock

                                       and

               Warrants to Purchase Shares of Class B Common Stock




                           Dated as of March 26, 1998

114038.12-Los Angeles Server 1A                    Draft May 11, 1998 - 10:58 AM

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                                TABLE OF CONTENTS


                                                                            Page

ARTICLE I
         DEFINITIONS..........................................................1
         Section 1.1  Definitions.............................................1
         Section 1.2  Rules of Construction..................................10

ARTICLE II
         PURCHASE AND SALE OF SECURITIES; CLOSING............................11
         Section 2.1  Authorization and Issuance of Securities...............11
         Section 2.2  Purchase and Sale of Securities........................11
         Section 2.3  Closing Deliveries  ...................................12
         Section 2.4  Delivery Expenses  ....................................13
         Section 2.5  Issue Taxes  ..........................................14
         Section 2.6  Lost, Etc. Securities  ................................14
         Section 2.7  Indemnification  ......................................14
         Section 2.8  Indemnification Threshold..............................16
         Section 2.9  Maximum Losses.........................................16
         Section 2.10  Subrogation...........................................17
         Section 2.11  Damages...............................................17

ARTICLE III
         CLOSING CONDITIONS..................................................17
         Section 3.1  Conditions to Purchaser's Obligations..................17
         Section 3.2  Conditions to the Company's Obligations................19

ARTICLE IV
         REPRESENTATIONS AND WARRANTIES OF THE  COMPANY......................21
         Section 4.1  Company's Due Incorporation and Good Standing..........21
         Section 4.2  Capitalization.........................................21
         Section 4.3  [Reserved].............................................22
         Section 4.4  Authority..............................................22
         Section 4.5  Authorization, Etc. of Shares..........................22
         Section 4.6  Authorization of Warrant Shares........................22
         Section 4.7  Authorization, Etc. of Registration Rights Agreement...23
         Section 4.8  Authorization, Etc. of Stockholder Agreement...........23


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<PAGE>

         Section 4.9  No Violation or Conflict; No Default...................23
         Section 4.10  No Material Adverse Change; Financial Statements......25
         Section 4.11  Full Disclosure.......................................25
         Section 4.12  Private Offering......................................25
         Section 4.13  No Brokers............................................26
         Section 4.14  Representations and Warranties........................26
         Section 4.15  Litigation............................................26
         Section 4.16  Labor Relations.......................................27
         Section 4.17  Taxes.................................................27
         Section 4.18  Environmental Matters.................................28
         Section 4.19  ERISA.................................................30
         Section 4.20  Properties............................................31
         Section 4.21  Compliance with Laws..................................32
         Section 4.22  Insider Transactions..................................32
         Section 4.23  Certain Transfers.....................................32
         Section 4.26 Survival of Representations and Warranties.............33

ARTICLE V
         REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.....................33
         Section 5.1  Purchase for Own Account...............................33
         Section 5.2  Accredited Investor....................................33
         Section 5.3  Authorization..........................................34
         Section 5.4  Capitalization.........................................34
         Section 5.5  No Brokers.............................................34
         Section 5.6  Survival of Representations and Warranties.............35

ARTICLE VI
         COVENANTS...........................................................35
         Section 6.1  Further Actions........................................35
         Section 6.2  Additional Covenants of the Company....................35

ARTICLE VII
         TERMINATION.........................................................37
         Section 7.1  Termination Events.....................................37
         Section 7.2  Effect of Termination..................................38

ARTICLE VIII
         MISCELLANEOUS.......................................................38


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         Section 8.1  Notices................................................38
         Section 8.2  Successors and Assigns.................................40
         Section 8.3  No Waivers; Amendments.................................40
         Section 8.4  Counterparts...........................................40
         Section 8.5  Section Headings.......................................40
         Section 8.6  GOVERNING LAW..........................................40
         Section 8.7  Entire Agreement.......................................41
         Section 8.8  Severability...........................................41
         Section 8.9  Attorneys' Fees........................................41
         Section 8.11  Knowledge.............................................42




                                    EXHIBITS

EXHIBIT A                 Certificate of Incorporation
EXHIBIT B                 Registration Rights Agreement
EXHIBIT C                 Sachs Warrant Agreement
EXHIBIT D                 Stockholder Agreement
EXHIBIT E                 Tax Allocation Agreement
EXHIBIT F                 Westrec Warrant Agreement



                                    SCHEDULES

4.1
4.9(a)(3)
4.15
4.16
4.17
4.18(d)
4.18(e)
4.19
4.20
4.22
4.24

                                      iii
<PAGE>



                          SECURITIES PURCHASE AGREEMENT

                  This SECURITIES  PURCHASE AGREEMENT (the "Agreement") is dated
as of March 26, 1998, and entered into by and between WESTREC MARINA MANAGEMENT,
INC., a California  corporation (the "Company") and COMMERCIAL  ASSETS,  INC., a
Maryland corporation (the "Purchaser").

                  In  consideration  of the mutual  covenants and agreements set
forth  herein and for other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged,  and intending to be legally bound
hereby, the Company and the Purchaser agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

Section 1.1  Definitions

                  As  used in this  Agreement,  the  following  terms  have  the
following meanings:

                  "Affiliate,"  with  respect  to any  Person,  means  any other
Person that,  directly or  indirectly,  controls,  is  controlled by or is under
common control with that Person. For purposes of the foregoing,  "control," when
used with respect to any Person,  means the possession,  directly or indirectly,
of the power to direct or cause the  direction of the  management or policies of
such Person, whether through the ownership of voting securities, by contract, or
otherwise,  and the terms  "controlled"  and  "controlling"  shall have meanings
correlative to the foregoing. In the case of a Person who is an individual,  the
term  "Affiliate"  shall include (i) members of his or her immediate  family (as
defined in  Instruction 2 of Item 404(a) of Regulation  S-K under the Securities
Act) and (ii) trusts,  the trustee or the beneficiaries of which are that Person
or members of his or her immediate  family, as determined in accordance with the
foregoing clause (i).

                  "Annual Financial Statements" means, with respect to any year,
audited  consolidated  financial  statements of the Company and its consolidated
Subsidiaries,   including  a  balance  sheet,  income  statement,  statement  of
stockholders'  equity and statement of cash flows, as of the end of and for such
year,  prepared in  accordance  with GAAP and  accompanied  by an opinion of the
Company's  independent public accountants,  which statements (beginning with the
fiscal  year  1998  statement)  must  include  the  operations  of  the  workers
compensation and group medical plans maintained for employees of the Company and
its Subsidiaries.


<PAGE>

                  "Audit"   means  any  audit,   assessment   of  Taxes,   other
examination  by any Tax Authority,  proceeding,  or appeal of a ruling in any of
the foregoing, relating to Taxes.

                  "Board of Directors"  means, as to any corporation,  its board
of directors or any duly authorized committee thereof.

                  "Business Day" means any day other than a Saturday, Sunday, or
other day when  commercial  banks are required or authorized by Law to be closed
for business in Los Angeles, California.

                  "Capital   Stock"   means  any  and  all  shares,   interests,
participations  or other  equivalents  (however  designated) of corporate stock,
including, without limitation, all common stock and preferred stock.

                  "Cash  Purchase  Price" has the  meaning  ascribed  thereto in
Section 2.2(c).

                  "Certificate of Amendment"  means the certificate of amendment
to the Company's Articles of Incorporation, substantially in the form of Exhibit
A hereto.

                  "Charter  Documents"  means  the  Articles  of  Incorporation,
Bylaws and any other organizational  document,  as amended or restated (or both)
to date, of the Company.

                  "Class A Common  Stock"  means the Class A Common  Stock,  par
value $.10 per share, of the Company.

                  "Class B Common  Stock"  means the Class B Common  Stock,  par
value $.10 per share, of the Company.

                  "Closing" has the meaning ascribed thereto in Section 2.2(c).

                  "Closing  Date" has the  meaning  ascribed  thereto in Section
2.2(c).

                  "Code"  means the Internal  Revenue  Code of 1986,  as amended
from time to time, and any successor statute or law thereto.

                  "Common  Stock" means the Class A Common Stock and the Class B
Common Stock.





                                       2
<PAGE>




                  "Consolidated  EBITDA" means, for any period, the Consolidated
Net Income of the  Company for such  period  adjusted by adding  thereto (to the
extent deducted in determining  Consolidated Net Income),  without  duplication,
the  sum  of  (i)  consolidated  income  tax  expense  of the  Company  and  its
Subsidiaries  for such period,  and  consolidated  depreciation and amortization
expense of the Company and its  Subsidiaries  for such  period,  provided,  that
consolidated  income tax expense and consolidated  depreciation and amortization
of a  Subsidiary  that is a less than a  wholly-owned  Subsidiary  shall only be
added to the extent of the equity  interest of the Company and its  wholly-owned
Subsidiaries in such Subsidiary,  (ii) Consolidated Fixed Charges of the Company
for such period,  and (iii) (to the extent not already reflected in Consolidated
EBITDA) the difference between (x) the earnings of Westrec Financial derived, in
the insurance plan year ending during such period, from the workers compensation
and  group  medical  plans  maintained  for  employees  of the  Company  and its
Subsidiaries minus (y) an estimate reasonably prepared by Company and reasonably
acceptable to the Purchaser of the aggregate amount of all claims expected to be
incurred by those plans for that insurance plan year.

                  "Consolidated  Fixed  Charges" of the Company  means,  for any
period, the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued  (including,  in  accordance  with the following
sentence, interest attributable to capitalized lease obligations) by the Company
and its Subsidiaries  during such period,  including (i) original issue discount
and  non-cash  interest  payments  or  accruals  on any  indebtedness,  (ii) the
interest portion of all deferred payment  obligations and (iii) all commissions,
discounts  and other fees and charges owed with  respect to bankers  acceptances
and letters of credit  financings  and currency  and  interest  swap and hedging
obligations, in each case to the extent attributable to such period, and (b) the
amount of dividends accrued or payable by the Company or any of its Subsidiaries
in respect of  Preferred  Stock  (other  than to the  Company or a  wholly-owned
Subsidiary of the Company).  For purposes of this definition,  (x) interest on a
capitalized  lease  obligation  shall be deemed to  accrue at an  interest  rate
reasonably determined by the Company to be the rate of interest implicit in such
capitalized  lease  obligation in accordance with GAAP and (y) interest  expense
attributable to any indebtedness  represented by the guarantee by the Company or
a Subsidiary of the Company of an  obligation of another  Person shall be deemed
to be the interest expense attributable to the indebtedness guaranteed.

                  "Consolidated  Net  Income"  means,  for any  period,  the net
income  (or  loss)  of  the  Company  and  its  Subsidiaries  (determined  on  a
consolidated basis in accordance with GAAP) for such period, adjusted to exclude
(only to the extent  included in computing such net income (or loss) and without


                                       3
<PAGE>

duplication):  (a) all gains and losses  which are either  extraordinary  or are
either  unusual  or  nonrecurring   (as  determined  in  accordance  with  GAAP)
(including any gain or loss from the sale or other disposition of assets or from
the issuance or sale of any capital stock),  less all fees and expenses relating
thereto,  (b) the net  income or loss of any  person  acquired  in a pooling  of
interests transaction for any period prior to the date of such acquisition,  (c)
the  amount of any  finders'  fees or  similar  fees paid to the  Company or its
Subsidiaries  by the Purchaser or any of its  Affiliates in connection  with the
acquisition by the Purchaser or such  Affiliates of a marina  property,  (d) all
reasonable  expenses  incurred by the Company or its  Subsidiaries in connection
with  the  review,  evaluation,   development  and  acquisition  of  new  marina
properties  to be managed by the Company,  and (e) any expenses  incurred by the
Company as a result of payment of any commissions or fees to Pearl Hill.

                  "Contracts"  has  the  meaning  ascribed  thereto  in  Section
4.9(a)(3).

                  "Conversion   Notice"  means  a  notice  sent  by  either  the
Purchaser or a Converting  Transferee to the Company.  If sent by the Purchaser,
the Conversion  Notice will (a) represent that the Purchaser has entered into an
agreement  to transfer  Class B Common  Stock to a  Converting  Transferee  in a
transfer  permitted  under the  Stockholder  Agreement,  and (b)  designate  the
Converting  Transferee  to whom the Company  must issue shares of Class A Common
Stock in  accordance  with the terms of  Section  6.5.  If sent by a  Converting
Transferee,  the  Conversion  Notice  will (x)  represent  that the  sender is a
Converting  Transferee  that received shares of Class B Common Stock or Warrants
in a transfer permitted under the Stockholder  Agreement,  and (y) set forth the
number of such  shares of Class B Common  Stock that the  Converting  Transferee
desires the Company to purchase in accordance with the terms of Section 6.5.

                  "Converting  Transferee"  means  a  holder  of  any  Purchaser
Securities  other than the Purchaser  that either (i) is a Permitted  Transferee
(as defined in the  Stockholder  Agreement)  that (x) is not a Subsidiary of the
Purchaser or (y) does not own,  directly or indirectly,  under the  constructive
ownership  rules of section 544 of the Code,  more than 9.8% of the  Purchaser's
Capital  Stock,  or (ii) an  Unaffiliated  Party (as defined in the  Stockholder
Agreement).

                  "Documents"   means  this   Agreement,   the  Westrec  Warrant
Agreement,  the Sachs Warrant Agreement,  the Registration Rights Agreement, the
Stockholder Agreement, and the Tax Sharing Agreement,  collectively,  or each of
such documents singularly,  and any documents or instruments  contemplated by or
executed in connection with any of them or in connection with the Transactions.


                                       4
<PAGE>




                  "Environmental  Claim"  means  any  claim,  action,  cause  of
action,  or investigation or any assertion by any Person of potential  liability
(including   potential  liability  for  investigatory   costs,   cleanup  costs,
governmental  response  costs,  natural  resources  damages,  property  damages,
personal injuries, or penalties) arising out of, based on, or resulting from (a)
the presence, or release into the environment,  of any Material of Environmental
Concern at any location now or previously owned, leased, used or operated by the
Company  or any  Partnership,  or (b)  circumstances  forming  the  basis of any
violation, or alleged violation, of any Environmental Law.

                  "Environmental  Laws" means all  federal,  state,  local,  and
foreign laws and regulations relating to pollution or protection of human health
or the environment  (including  ambient air, surface water,  ground water,  land
surface  or  subsurface  strata,  and  natural  resources),  including  laws and
regulations relating to emissions,  discharges, releases, or threatened releases
of Materials of Environmental Concern, or otherwise relating to the manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling of Materials of Environmental Concern.

                  "Employee  Benefit Plan" has the meaning  ascribed  thereto in
Section 4.19.

                  "Enterprise  Value" means, at any time during any fiscal year,
an  amount  equal to (i) five  times  Consolidated  EBITDA  for the  immediately
preceding fiscal year (the "Preceding  Year"),  plus (ii) the fair market value,
as mutually  determined  by the Company and the  Purchaser,  of any  investments
(other than in the Partnerships) held by the Company and its Subsidiaries,  plus
(iii)  the sum of all cash  and cash  equivalents  held by the  Company  and its
Subsidiaries,  plus (iv) the trade  receivables  (adjusted  as  appropriate  for
collectibility)  of the  Company  and its  Subsidiaries,  plus  (v)  any  normal
pre-paid  expenses  of the Company and its  Subsidiaries,  paid in the  ordinary
course of  business,  plus (vi) all  normal  inventory  of the  Company  and its
Subsidiaries,  acquired for resale in the ordinary course of business, valued at
the lower of cost or market value,  plus (vii) any receivable from Affiliates of
the Company actually  collected within 90 days of the end of the Preceding Year,
minus (viii) all Liabilities of the Company or any of its Subsidiaries,  in each
case or shown on the balance sheet included in the Annual  Financial  Statements
for the  Preceding  Year,  minus (ix) the fair market  value (or,  if less,  the
redemption price) of any outstanding  shares of stock (a) of the Company,  other
than Common Stock,  and (b) of any  Subsidiary of the Company,  other than stock
held by the Company or any  Subsidiaries  of the  Company.  For  purposes of the
above  calculation,  (a) the amounts in clauses  (ii) - (ix) will be  determined
with  reference  to, or as of, the end of the  Preceding  Year,  and (b) Westrec
Equities, Inc. shall not be deemed to be a Subsidiary of the Company.


                                        5
<PAGE>




                  "Enterprise  Value Per Common Share" means,  on any date,  the
Company's  Enterprise  Value on that  date  divided  by the  number of shares of
Common Stock issued and outstanding on that date.

                  "Equity Interest" means (i) with respect to a corporation, any
and all issued and  outstanding  Capital  Stock and  warrants,  options or other
rights to acquire Capital Stock and (ii) with respect to a partnership,  limited
liability  company or similar  Person,  any and all units,  interests,  or other
equivalents  of, or other  ownership  interests in any such Person and warrants,
options or other rights to acquire any such units or interests.

                  "ERISA" means The Employee  Retirement  Income Security Act of
1974, as amended from time to time, and any successor statute or law thereto.

                  "ERISA  Affiliate" has the meaning ascribed thereto in Section
4.19.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder,  and any successor
statute or law thereto.

                  "GAAP" means those generally  accepted  accounting  principles
and  practices  which are  recognized  as such from time to time by the American
Institute  of  Certified  Public   Accountants  acting  through  its  Accounting
Principles Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently  applied for
all periods after the date hereof.

                  "Governmental  Body" means (i) any federal,  state,  local, or
foreign governmental authority or regulatory body, (ii) any subdivision, agency,
commission,  or authority  thereof,  or any  quasi-governmental  or private body
exercising any governmental  regulatory authority  thereunder,  (iii) any Person
directly  or  indirectly  owned  by and  subject  to the  control  of any of the
foregoing,  or (iv) any court,  arbitrator,  or other judicial or quasi-judicial
tribunal.

                  "Haulover Debt" means the obligation of Westrec Equities, Inc.
evidenced by a note in the  approximate  amount of $420,000  executed by Westrec
Equities  Inc. in favor of California  United Bank,  and as to which the Company
may be a guarantor or a co-obligor.


                                       6
<PAGE>



                  "Holder" or "Holders"  means the  Purchaser  and any Affiliate
thereof that becomes a holder of any of the  Securities,  so long as such Person
holds any Securities.

                  "Initial Purchase Price" means $1.5 million.

                  "Laws" has the meaning ascribed thereto in Section 4.9.

                  "Liabilities"  of the Company means all amounts that are shown
as  liabilities  on a  consolidated  balance  sheet of the  Company  prepared in
accordance  with GAAP plus, to the extent not so shown,  any preferred  stock of
the  Company  (valued  at the  greater  of the  liquidation  preference  of such
preferred  stock or any amount required to be paid upon redemption or repurchase
thereof),  regardless of whether such preferred stock is required to be redeemed
or  repurchased by the Company or any  Subsidiary;  provided that, to the extent
reflected on the Company's 1997 Audited Financial Statements,  the Haulover Debt
as to which Michael M. Sachs has  indemnified the Company in Section 3.10 of the
Stockholder Agreement shall not be counted as a Liability of the Company.

                  "Lien" means any mortgage,  pledge, lien, encumbrance,  charge
or adverse  claim  affecting  title or  resulting  in a charge  against  real or
personal  property,  or security interest of any kind (including any conditional
sale or other title retention  agreement,  any lease in the nature thereof,  any
option or other  agreement  to sell and any  filing of any  financing  statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

                  "Losses" has the meaning ascribed thereto in Section 2.7.

                  "Material  Adverse Effect" means (a) a material adverse effect
upon the  business,  operations,  properties,  assets,  condition  (financial or
otherwise) or prospects of the Company and its  Subsidiaries,  or (b) a material
adverse effect on the ability of the Company or any other party to the Documents
(other  than the  Company)  to perform  its  respective  obligations  under this
Agreement or any of the other Documents.

                  "Materials  of   Environmental   Concern"   means   chemicals,
pollutants,  contaminants,  industrial, toxic or hazardous wastes, substances or
constituents,  petroleum or petroleum products (or any by-product or constituent
thereof), asbestos or asbestos-containing materials, or PCBs.

                  "Notice" has the meaning ascribed thereto in Section 8.1.


                                       7
<PAGE>


                  "Outside Date"means May 31, 1998.

                  "Partnerships"  means  PS  Marinas  I,  a  California  Limited
Partnership,  PS Marinas 3, a California  Limited  Partnership,  PS Marinas 4, a
California Limited Partnership,  PS Marinas 5, a California Limited Partnership,
Tower Park  Marina  Investors,  L.P.,  a  California  limited  partnership,  and
Southwinds.

                  "Person" means an individual, partnership,  corporation, trust
or   unincorporated   organization  or  a  government  or  agency  or  political
subdivision thereof.

                  "Preferred  Stock" has the meaning ascribed thereto in Section
4.2.

                  "Proceedings" has the meaning ascribed thereto in Section 4.15

                  "Purchase Price  Adjustment" has the meaning  ascribed thereto
in  Section  2.2(c)(ii).  "Purchaser  Securities"  means (a)  326,740  shares of
newly-issued  shares of Class A Common Stock,  (b) the Warrants,  and (c) 82,351
shares of newly-issued shares of Class B Common Stock.

                  "Put  Notice"  has the  meaning  ascribed  thereto  in Section
6.4(a).

                  "Put Date" has the meaning ascribed thereto in Section 6.4(b).

                  "Registration  Rights Agreement" means the Registration Rights
Agreement,  dated as of the  Closing  Date,  by and  between the Company and the
Purchaser, substantially in the form attached hereto as Exhibit B.

                  "Sachs Warrant Agreement" means the Warrant  Agreement,  to be
dated as of the Closing  Date,  by and between the Company and Michael M. Sachs,
substantially in the form attached hereto as Exhibit C.

                  "SEC" means the Securities and Exchange Commission.

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder,  and any successor  statute
or law thereto.

                  "Securities"  means,  collectively,  the Shares, the Warrants,
and the Warrant Shares,  and "Security" means any of the Shares, the Warrants or
the Warrant Shares, as in the context may be appropriate.


                                       8
<PAGE>


                  "Shares" means the shares of  newly-issued  Common Stock to be
purchased pursuant to this Agreement.

                  "Southwinds"  means  Southwinds  Marina,  L.L.C.,  a  Delaware
limited liability company.

                  "Stockholder Agreement" means the Stockholder Agreement, to be
dated as of the Closing Date, by and among the Company,  the Purchaser,  Westrec
Financial,  Michael Sachs,  and each other Person who becomes a party thereto in
accordance with the terms thereof,  substantially in the form attached hereto as
Exhibit D.

                  "Subsidiary"  of any Person means (a) a  corporation  in which
such  Person,  a  subsidiary  of such  Person,  or such  Person  and one or more
subsidiaries   of  such  Person,   directly  or  indirectly,   at  the  date  of
determination,  has either (i) a majority  ownership interest or (ii) the power,
under ordinary circumstances, to elect, or to direct the election of, a majority
of the board of directors of such  corporation,  or (b) a  partnership  in which
such  Person,  a  subsidiary  of such  Person,  or such  Person  and one or more
subsidiaries  of such  Person  (i) is, at the date of  determination,  a general
partner of such partnership,  or (ii) has a majority  ownership interest in such
partnership  or the right to elect,  or to direct the election of, a majority of
the governing  body of such  partnership,  or (c) any other Person (other than a
corporation or a partnership) in which such Person, a subsidiary of such Person,
or such  Person and one or more  subsidiaries  of such  Person has either (i) at
least a majority ownership interest or (ii) the power to elect, or to direct the
election of, a majority of the directors or other governing body of such Person.

                  "Taxes" means all federal,  state,  local,  and foreign taxes,
and other  assessments of a similar nature (whether  imposed directly or through
withholding),  including any interest, additions to tax, or penalties applicable
thereto.

                  "Tax Allocation  Agreement" means the Tax Allocation Agreement
to be dated as of the Closing Date,  between the Company,  Westrec Financial and
the other parties thereto,  substantially in the form attached hereto as Exhibit
E.

                  "Tax  Authority"  means the Internal  Revenue  Service and any
other  domestic  or  foreign   governmental   authority   responsible   for  the
administration of any Taxes.

                  "Tax Returns" means all federal, state, local, and foreign tax
returns,  any  declarations,   statements,   reports,   schedules,   forms,  and
information returns relating to Taxes, including any amendment to any of them.

                                       9
<PAGE>

                  "Transactions"means  the  transactions  contemplated  by  this
Agreement and the other Documents.

                  "Warrants" means warrants to purchase shares of Class B Common
Stock at the times and in accordance  with the terms and conditions set forth in
the Westrec Warrant Agreement.

                  "Warrant  Shares"  means the  shares  of Class B Common  Stock
issuable upon exercise of the Warrants.

                  "Westrec  Equities,  Inc." means  Westrec  Equities,  Inc.,  a
California corporation and a wholly-owned Subsidiary of the Company.

                  "Westrec   Financial"   means  Westrec   Financial,   Inc.,  a
California  corporation  and  the  owner  as of the  date  hereof  of all of the
outstanding equity interests in the Company.

                  "Westrec Warrant Agreement" means the Warrant Agreement, to be
dated as of the Closing  Date,  by and  between  the Company and the  Purchaser,
substantially in the form attached hereto as Exhibit F.

Section 1.2  Rules of Construction

                  Unless the context otherwise requires:

                  (a)    a term has the meaning assigned to it;

                  (b)    "or" is not exclusive;

                  (c)    words in the  singular  include the plural, and words
                         in the plural include the singular;

                  (d)    provisions apply to successive events and transactions;

                  (e)    "herein,"  "hereof,"  "hereunder," and other words of
                         similar import refer to this Agreement as a whole and
                         not to any particular  section or other  subdivision;
                         and



                                       10
<PAGE>


                  (f)    "including" means including without limitation.


                                   ARTICLE II
                    PURCHASE AND SALE OF SECURITIES; CLOSING

Section 2.1  Authorization and Issuance of Securities

                           (a) The Company has authorized the issuance  and sale
to the  Purchaser of the Shares and the Warrants.

                           (b) The  Warrants  will  be  evidenced  by a  Warrant
certificate,  substantially  in the form  attached  as Exhibit A to the  Westrec
Warrant  Agreement and dated the Closing Date. The Warrants will be exercisable,
at the times and in the manner provided in the Westrec Warrant Agreement and the
Warrants,  for a number of Warrant  Shares as provided  in the  Westrec  Warrant
Agreement. The terms and provisions of the Westrec Warrant Agreement constitute,
and are hereby expressly made, a part of this Agreement, and the Company and the
Purchaser, by their execution and delivery of this Agreement, expressly agree to
those terms and provisions and to be bound thereby.

                           (c) Each  Holder  of  Securities  will  have  certain
registration rights with respect thereto as set forth in the Registration Rights
Agreement.

Section 2.2  Purchase and Sale of Securities

                           (a)  Purchase  and  Sale.  Subject  to the  terms and
conditions  set forth herein and in reliance on the  respective  representations
and warranties set forth or incorporated by reference herein, the Company agrees
to sell to the Purchaser, and the Purchaser agrees to purchase from the Company,
the Purchaser Securities.

                           (b) Closing.  The purchase and sale of the Securities
will take place at a closing (the  "Closing")  at the offices of Skadden,  Arps,
Slate,  Meagher & Flom,  LLP, 300 South Grand Avenue,  Suite 3400,  Los Angeles,
California  90071 at 9:00 a.m.,  Los Angeles  time,  on the second  Business Day
after all of the  conditions  set forth in Article  III have been  satisfied  or
waived,  or such other  Business Day as may be agreed upon by the  Purchaser and
the Company (the  "Closing  Date").  Other than as set forth in Section 7.1, the
failure to consummate  the purchase and sale provided for herein at the time and
place determined under this Section 2.2(b) will not result in the termination of
this Agreement nor relieve any party of any obligation hereunder.

                                       11
<PAGE>


                           (c)  Payment of Purchase Price.

                           (i)  At the  Closing,  the  Purchaser  will  pay  the
         Initial Purchase Price to the Company.

                           (ii) The aggregate  consideration  for the Shares and
         the Warrants  will be (A) an amount equal to the  Company's  Enterprise
         Value Per Common  Share on the Closing  Date times  409,091  (the "Cash
         Purchase Price"), plus (B) the warrants granted under the Sachs Warrant
         Agreement  (which warrants are being  distributed by the Company solely
         to Westrec Financial and are being sold by Westrec Financial to Michael
         M. Sachs).  As soon as practicable after the delivery by the Company to
         the Purchaser of the Company's 1997 Annual  Financial  Statements,  the
         Company and the Purchaser  will calculate the Cash Purchase  Price.  If
         the Cash  Purchase  Price  exceeds  the  Initial  Purchase  Price,  the
         Purchaser  will pay the  excess to the  Company.  If the Cash  Purchase
         Price is less than the Initial  Purchase Price, the Company will refund
         the difference to the  Purchaser.  Any payment due under this paragraph
         (a "Purchase  Price  Adjustment")  must be made as promptly as possible
         after the  determination  of the Cash  Purchase  Price,  in the  manner
         prescribed  for the  payment of the Initial  Purchase  Price in Section
         2.3(a)(1) hereof.

                           (iii) The Company and the  Purchaser  hereby agree to
         allocate  the  purchase  price  with  respect  to the  Shares  and  the
         Warrants,  based on their fair market  value,  as follows:  100% to the
         Shares; 0% to the Warrants.  Contemporaneously  with the payment of any
         Purchase  Price  Adjustment,  the Company and the Purchaser  will agree
         upon an  allocation  of the purchase  price  between the Shares and the
         Warrants,  based on each Security's fair market value,  except that the
         failure to agree upon the  allocation  will not  relieve any party from
         its  obligation  hereunder  to pay a  Purchase  Price  Adjustment.  The
         Company and the  Purchaser  hereby agree that all Tax Returns  filed by
         the  Company  and the  Purchaser  will be  consistent  in all  material
         respects with the allocation  determined as set forth in this Paragraph
         2.2(c)(iii).

  Section 2.3  Closing Deliveries

                   At the Closing:

                 (a) The Company will deliver to the Purchaser:

                                       12
<PAGE>


                  (1)  certificates  representing  the Shares and the  Warrants,
         duly endorsed (or  accompanied  by duly  executed  stock powers in such
         permitted   denomination  or   denominations   and  registered  in  the
         Purchaser's  name or the  name  of  such  nominee  or  nominees  as the
         Purchaser may request),  dated the Closing Date, against payment of the
         purchase price therefor by one or more intra-bank or Federal funds bank
         wire transfers of same day funds to such bank account within the United
         States as the Company shall  designate at least two Business Days prior
         to the Closing);

                  (2)  duly  executed  copies  of  each of the  Westrec  Warrant
         Agreement,   the  Sachs  Warrant  Agreement,  the  Registration  Rights
         Agreement, the Stockholder
         Agreement, and the Tax Allocation Agreement; and

                  (3) a  certificate  to the effect  that each of the  Company's
         representations  and warranties set forth or  incorporated by reference
         in this  Agreement  was  accurate in all respects as of the date hereof
         and is accurate in all respects as of the Closing  Date,  as if made on
         the Closing Date.

                           (b) The Purchaser will deliver to the Seller:

                  (1)  one or more wire transfers in accordance with Section 2.3
         (a)(1) above;

                  (2)  duly  executed  copies  of  each of the  Westrec  Warrant
         Agreement,   the  Sachs  Warrant  Agreement,  the  Registration  Rights
         Agreement, and the Stockholder Agreement; and

                  (3) a certificate  to the effect that each of the  Purchaser's
         representations  and  warranties in this  Agreement was accurate in all
         respects as of the date  hereof and is  accurate in all  respects as of
         the Closing Date as if made on the Closing Date.

Section 2.4  Delivery Expenses

                  If a Holder  surrenders  any Securities to the Company for any
reason, the Company agrees to pay the cost of delivering to such Holder's office
or to the office of such Holder's  designee  from the Company,  insured (at such
Holder's expense) to such Holder's reasonable satisfaction, each Security issued


                                       13
<PAGE>

in  substitution,  replacement  or  exchange  for,  or  upon  exercise  of,  the
surrendered Security.

Section 2.5  Issue Taxes

                  The  Company  agrees  to pay all  sales,  transfer,  and other
similar  Taxes  (other  than Taxes in the nature of  income,  franchise  or gift
taxes) and  governmental  fees arising in connection  with the  issuance,  sale,
delivery or transfer by the Company to each Holder of the Shares,  the  Warrants
and the Warrant  Shares,  as the case may be, and the  execution and delivery of
the other Documents and any modification of any of such Securities and Documents
and will hold such Holder harmless without limitation as to time against any and
all liabilities  with respect to all such Taxes and fees. The obligations of the
Company  under this  Section 2.5 shall  survive the exercise of the Warrants and
the termination of this Agreement and the other Documents.

Section 2.6  Lost, Etc. Securities

                  Notwithstanding  anything  to the  contrary  contained  in the
Charter Documents or the Westrec Warrant Agreement, if a mutilated Security or a
Warrant Share is  surrendered  to the Company by a Holder for  replacement or if
the Holder of a Security or Warrant  Share  claims and submits an  affidavit  or
other evidence,  reasonably  satisfactory to the Company, to the effect that the
Security or Warrant  Share has been lost,  destroyed or  wrongfully  taken,  the
Company shall issue,  or cause to be issued,  a replacement  Security or Warrant
Share if the  customary  requirements  relating to  replacement  securities  are
reasonably satisfied;  provided,  that the affidavit of an authorized officer of
such Holder,  setting forth the fact of loss,  theft or  destruction  and of its
ownership  of the Security or Warrant  Share at the time of such loss,  theft or
destruction shall be accepted as satisfactory  evidence thereof,  and no further
indemnity  shall be required as a condition to the  execution  and delivery of a
new Security or Warrant Share other than the unsecured written agreement of such
owner,  reasonably satisfactory to the Company, to indemnify the Company, or, at
the option of the Holder,  an  indemnity  bond in the amount of the  Security or
Warrant Share remaining outstanding.

Section 2.7  Indemnification

                  In addition to all other sums due hereunder or provided for in
this Agreement or any of the other  Documents and any and all obligations of the
Company  to  indemnify  the  Purchaser  hereunder  or  under  any of  the  other
Documents,  the  Company  hereby  agrees,  without  limitation  as to  time,  to
indemnify the Purchaser,  each of its  Affiliates  and each  director,  officer,


                                       14
<PAGE>

partner,  employee,  counsel, agent or representative of the Purchaser or any of
its Affiliates (collectively,  the "Indemnified Parties") against, and hold each
of them  harmless  from,  to the fullest  extent  lawful,  all  losses,  claims,
damages,  taxes,  liabilities,  costs (including,  without limitation,  costs of
preparation  and  reasonable  fees and other charges and expenses of counsel and
customary  per  diem  reimbursement  or fees  for time  spent  preparing  for or
participating  in any deposition or giving  testimony) and reasonable  expenses,
including expenses of investigation (collectively, "Losses"), incurred by any of
them,  arising out of or in connection with (i) the breach of any representation
or warranty of the Company set forth in or  incorporated  by  reference  in this
Agreement,  or (ii) any  pollution or threat to human health or the  environment
that is  related  in any way to the  Company  and its  Subsidiaries'  respective
operations,  including,  without limitation, all on-site and off-site activities
involving  Materials of Environmental  Concern,  and that occurred,  existed, or
arises out of conditions that existed or were caused, in whole or in part, on or
before the Closing Date; provided, however, that the Company shall not be liable
to any  Indemnified  Party  for  any  Losses  to the  extent  that it  shall  be
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or review)  that such Losses  arose from any act or failure to
act  of  such  Indemnified  Party   constituting  gross  negligence  or  willful
misconduct,  so long as such acts were not  taken by such  Indemnified  Party in
good  faith  or  in  reasonable  reliance  upon  any  of  the   representations,
warranties,  covenants, or promises of the Company or its Affiliates included or
incorporated by reference herein or in any other Document. The Company agrees to
reimburse  any  Indemnified  Party  promptly  for all  such  Losses  as they are
incurred by such  Indemnified  Party (subject to repayment to the Company to the
extent  that it is  ultimately  determined  that  an  Indemnified  Party  is not
entitled to indemnification  hereunder).  The obligations of the Company to each
Indemnified  Party  hereunder shall be separate  obligations,  and the Company's
liability to any Indemnified  Party  hereunder shall not be extinguished  solely
because any other  Indemnified  Party is not  entitled to  indemnity  hereunder.
Subject to Section 4.26,  the  obligations of the Company under this Section 2.7
shall survive the purchase of the Securities,  the exercise of the Warrants, the
purchase of any Warrant Shares,  any transfer of the Securities by the Purchaser
and the termination of this Agreement and any of the other Documents.

                  In case any action,  claim,  suit,  citation or proceeding (an
"Action") shall be brought  against any Indemnified  Party with respect to which
indemnity may be sought against the Company  hereunder,  such Indemnified  Party
shall  promptly  notify the Company in writing and the Company  shall assume the
defense thereof,  including the employment of counsel reasonably satisfactory to
such  Indemnified  Party and payment of all fees and other  charges and expenses
incurred in connection  with the defense  thereof.  The failure to so notify the
Company  shall not affect any  obligation it may have to any  Indemnified  Party


                                       15
<PAGE>

under this Agreement except to the extent that (as finally determined by a court
of  competent  jurisdiction,  which  determination  is not  subject to review or
appeal) such failure  materially and adversely  prejudiced the Company's ability
to defend such  Action.  Each  Indemnified  Party shall have the right to employ
separate counsel in any such Action and participate in the defense thereof,  but
the  fees  and  expenses  of  such  counsel  shall  be at the  expense  of  such
Indemnified Party unless:  (i) the Company has agreed to pay such fees and other
charges  and  expenses,  it  being  understood  that  the  Company  is  under no
obligation to agree to do so except as set forth in clauses (ii) - (iii) of this
paragraph; (ii) the Company has failed reasonably promptly to assume the defense
and employ counsel  reasonably  satisfactory to such Indemnified Party; or (iii)
the named parties to any such Action  (including any impleaded  parties) include
any Indemnified  Party and the Company or an Affiliate of the Company,  and such
Indemnified  Party and the Company shall have been advised in writing by counsel
that a conflict of interest may exist if the Company's  counsel  represents such
Indemnified  Party and the  Company or its  Affiliate;  provided  that,  if such
Indemnified  Party  notifies  the  Company in  writing  that it elects to employ
separate  counsel in the  circumstances  described in clause (i),  (ii) or (iii)
above,  the  Company  shall not have the right to assume  the  defense  thereof,
provided,  however,  that the Company shall not, in connection with any one such
Action or separate but  substantially  similar or related Actions arising out of
the same general allegations or circumstances,  be responsible hereunder for the
fees and other  charges  and  expenses  of more  than one such firm of  separate
counsel (in addition to any local counsel), which counsel shall be designated by
such  Indemnified  Party.  The Company shall not be liable for any settlement of
any such  Action  effected  without  its  written  consent  (which  shall not be
unreasonably  withheld),  except as set forth below.  The Company agrees that it
will not,  without the  Indemnified  Party's prior written  consent,  consent to
entry of any judgment or settle or compromise  any pending or threatened  Action
in respect of which  indemnification  or  contribution  may be sought  hereunder
unless the foregoing  contains an unconditional  release,  in form and substance
reasonably  satisfactory to the Indemnified  Parties, of each of the Indemnified
Parties from all liability and obligation arising therefrom.

                  If the  indemnification  provided  for in this  Section 2.7 is
unavailable  to, or  insufficient  to hold harmless,  any  Indemnified  Party in
respect  of any  Losses  referred  to  herein,  then the  Company  shall have an
obligation  to  contribute  to the amount  paid or  payable by such  Person as a
result of such  Losses in such  proportion  as is  appropriate  to  reflect  the
relative fault of the Company, its subsidiaries and Affiliates, on the one hand,
and such Indemnified Party, its Subsidiaries and Affiliates,  on the other hand,
in  connection  with the  actions  which  resulted in such Losses as well as any
other relevant equitable considerations.  The amount paid or payable by any such


                                       16
<PAGE>

Person as a result of the Losses  referred  to above  shall be deemed to include
any  legal or other  fees or  expenses  reasonably  incurred  by such  Person in
connection with any investigation or Action.

Section 2.8  Indemnification Threshold

                  No claim for  indemnification  may be made by any  Indemnified
Party  hereunder  unless the aggregate of all Losses incurred by all Indemnified
Parties and subject to  indemnification  exceeds $100,000 and only to the extent
of any such Losses in excess of $100,000.

Section 2.9  Maximum Losses

                  No claim for  indemnification  of Losses (whether in an action
for  indemnification or otherwise) may be made by an Indemnified Party hereunder
to the extent that the aggregate Losses claimed (including any Losses previously
recovered) by all Indemnified  Parties  exceeds the Cash Purchase Price,  except
that this Section 2.9 will not apply to or limit any  Indemnified  Party's right
to  indemnification  arising under clause (ii) of Section 2.7, the breach of any
representation  or  warrant  in  Section  4.18,  or any other  provision  hereof
relating to Environmental Laws.

Section 2.10  Subrogation

                  If the Company  makes any payment under Section 2.7 in respect
of any Losses,  the Company shall be subrogated,  to the extent of such payment,
to the rights of the  Indemnified  Party against any insurer or third party with
respect to such Losses;  provided,  however, that the Company shall not have any
rights  of  subrogation  with  respect  to the  Indemnified  Party or any of its
Affiliates  or any of its or its  Affiliates'  officers,  directors,  agents  or
employees.

Section 2.11  Damages

                  Notwithstanding  anything to the  contrary  elsewhere  in this
Agreement or any other Document,  neither the Company nor its Affiliates  shall,
in any event, be liable to any Indemnified Party for any consequential  damages,
including,  but not limited to, loss of revenue or income,  cost of capital,  or
loss of business  reputation  or  opportunity  relating to the breach or alleged
breach of this  Agreement.  Each  party  agrees  that it will not seek  punitive
damages as to any matter under, relating to or arising out of the Transactions.


                                       17
<PAGE>


                                   ARTICLE III
                               CLOSING CONDITIONS

Section 3.1  Conditions to The Purchaser's Obligations

                  The  obligation  of the  Purchaser to purchase and pay for the
Securities  at the Closing is subject to the  satisfaction  or waiver of each of
the following conditions on or before the Closing Date:

                           (a)  Delivery of  Documents.  The Company  shall have
         delivered to the Purchaser,  in form and substance  satisfactory to the
         Purchaser and its counsel, the following:

                           (i)  Certificates   representing  the  the  Purchaser
         Securities,  duly  executed by  authorized  officers of the Company and
         registered in the Purchaser's name;

                           (ii)  Executed  copies of each  Document  (other than
         this Agreement) to which the Company is a party.

                           (iii)  An  opinion,   dated  the  Closing   Date  and
         addressed to the Purchaser,  from Gibson,  Dunn & Crutcher LLP, counsel
         for the Company, in a form reasonably  acceptable to the Purchaser.  In
         rendering  their opinion,  such counsel may rely as to factual  matters
         upon  certificates  or  other  documents  furnished  by  the  Company's
         officers and other  representatives  (copies of which must be delivered
         to the  Purchaser)  and by  government  officials,  and upon such other
         documents  as  such  counsel  deem  appropriate  as a basis  for  their
         opinion.  Such counsel shall opine,  as  applicable,  as to the federal
         laws of the United States and the laws of the State of California.

                           (iv) A duly  certified  resolution  of the  Company's
         Board of  Directors,  in full  force and  effect on the  Closing  Date,
         authorizing the Company's  execution,  delivery and performance of this
         Agreement  and all other  Documents to which the Company is a party and
         the consummation of the Transactions.

                           (v) Such other  documents,  certificates and opinions
         as the Purchaser may reasonably request.


                                       18
<PAGE>

                           (b)  Compliance  with  Agreements.  The Company shall
have  performed  and complied with all  agreements,  covenants,  and  conditions
herein and in each other  Document  that are to be performed or complied with by
the Company on or before the Closing Date.

                           (c)  Representations  and  Warranties.   All  of  the
Company's  representations and warranties contained or incorporated by reference
herein  or in any  other  Document  shall be true and  correct  on and as of the
Closing Date, both before and after giving effect to the Transactions.

                           (d)  No  Material   Adverse  Change.   Subsequent  to
December 31, 1997, (i) there shall not have been any material adverse change, or
any  development  involving  a  prospective  material  adverse  change,  in  the
properties,  business, operations, assets, condition (financial or otherwise) or
prospects of the Company, its Subsidiaries, or any of their properties; and (ii)
except for the  issuance  of the  Securities,  (A) there shall not have been any
change in the  Company's  Capital Stock (other than as  contemplated  hereby) or
long-term debt (other than resulting from scheduled payments  thereunder) or any
material  increase in its short-term  debt, and (B) the Company shall not (other
than in the ordinary  course of business  consistent  with past  practice)  have
incurred any liability or obligation,  direct or contingent, that is material to
the Company,  is required to be disclosed on a balance sheet in accordance  with
GAAP, and is not disclosed on the latest balance sheet provided to the Purchaser
prior to the date of this Agreement.

                           (e) No Material Judgment or Order. There shall not be
on the Closing Date any  judgment or order of a court of competent  jurisdiction
or any ruling of any Governmental  Body that, in the reasonable  judgment of the
Purchaser or its counsel,  would prohibit or subject the Company to any material
penalty on account of the sale or issuance of the Securities hereunder.

                           (f) Consummation of the Transactions  shall not cause
the  Purchaser  tofail to  qualify as a "real  estate  investment  trust"  under
Section  856 of the Code,  and there  shall not have been  enacted,  proposed or
announced  any  amendment  to the Code or the  rules or  regulations  thereunder
(including any rulings) which, if applied to the Purchaser or the  Transactions,
could  cause the  Purchaser  to fail to  qualify  as a "real  estate  investment
trust."

                           (g) All of the transactions contemplated by the other
Documents shall have been consummated.

                           (h) The Closing Date shall have  occurred on or prior
to the Outside Date.

                                       19
<PAGE>

Section 3.2  Conditions to the Company's Obligations

                  The  obligation of the Company to issue and sell the Purchaser
Securities  to the  Purchaser at the Closing is subject to the  satisfaction  or
waiver of each of the following conditions on or before the Closing Date:

                           (a) Performance of  Obligations.  The Purchaser shall
have  performed  and complied with all  agreements,  covenants,  and  conditions
herein and in each other Document on or before the Closing Date.

                           (b)  Delivery  of  Documents  and  Payment of Initial
Purchase  Price.  The  Purchaser  shall  have  delivered  each of the  following
documents and shall have made the payment required by Section 2.2(c)(i) hereof:

                           (i) Executed copies of each Document (other than this
         Agreement) to which the Purchaser is a party.

                           (ii)  Opinions,  dated the Closing Date and addressed
         to the Company, from Skadden,  Arps, Slate, Meagher & Flom LLP, counsel
         for the Purchaser and from separate local counsel for the Purchaser, in
         a  form  reasonably  acceptable  to the  Company.  In  rendering  their
         opinion,  such counsel may rely as to factual matters upon certificates
         or other  documents  furnished  by the  Purchaser's  officers and other
         representatives  (copies of which must be delivered to the Company) and
         by government officials,  and upon such other documents as such counsel
         deems  appropriate  as a basis for their  opinion.  Such counsel  shall
         opine,  as applicable,  as to the federal laws of the United States and
         the laws of the States of California and Maryland.

                           (iii) A duly certified  resolution of the Purchaser's
         Board of Directors  ratifying and approving the Purchaser's  execution,
         delivery and  performance of this Agreement and all other  Documents to
         which it is a party and the consummation of the Transactions.

                           (iv) Such other documents,  certificates and opinions
         as the Company may reasonably request.

                           (c)  Representations  and  Warranties.   All  of  the
Purchaser's   representations  and  warranties   contained  or  incorporated  by


                                       20
<PAGE>

reference herein or in any other Document shall be true and correct on and as of
the Closing Date, both before and after giving effect to the Transactions.

                           (d)  No  Material   Adverse  Change.   Subsequent  to
December 31, 1997, there shall not have been any material adverse change, or any
development  involving a prospective  material adverse change in the properties,
business, operations, assets, condition (financial or otherwise) or prospects of
the Purchaser or its Subsidiaries.

                           (e) No Material Judgment or Order. There shall not be
on the Closing Date any  judgment or order of a court of competent  jurisdiction
or any ruling of any Governmental  Body that, in the reasonable  judgment of the
Company or its counsel,  would  prohibit or subject the Purchaser or the Company
to any material penalty on account of the consummation of the Transactions.

                           (f) All of the transactions contemplated by the other
Documents shall have been consummated.

                           (g) The Closing Date shall have  occurred on or prior
to the Outside Date.


                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                  The Company  represents  and warrants to the  Purchaser on the
date hereof and as of the Closing Date as follows:

Section 4.1  Company's Due Incorporation and Good Standing

                           (a) The Company is a corporation  duly  incorporated,
validly existing, and in good standing under the laws of the State of California
with  full  corporate  power  and  authority  to  own,  lease  and  operate  its
properties, to conduct its business as currently conducted and as proposed to be
conducted and to enter into and perform its obligations under this Agreement and
the other  Documents to which it is a party.  The Company is duly qualified as a
foreign  corporation  to  transact  business  and is in  good  standing  in each
jurisdiction in which such qualification is required.

                           (b) Schedule 4.1 sets forth a list of each Subsidiary
of the Company. Each such Subsidiary is a corporation duly incorporated, validly


                                       21
<PAGE>

existing  and  in  good  standing  under  the  laws  of  its   jurisdiction   of
incorporation, with full corporate power and authority to own, lease and operate
its  properties  and to conduct  its  business  as  currently  conducted  and as
proposed  to be  conducted.  Each  Subsidiary  is duly  qualified  as a  foreign
corporation to transact business and is in good standing in each jurisdiction in
which such  qualification is required.  All of the outstanding  Capital Stock of
each of the Subsidiaries is owned by the Company free and clear of any Lien.

Section 4.2  Capitalization

                  The  authorized  capital  stock  of the  Company  consists  of
20,000,000  shares of Class A Common Stock,  10,000,000 shares of Class B Common
Stock and 5,000,000 shares of preferred stock (the "Preferred Stock"). As of the
Closing  Date,  after giving  effect to the  transactions  contemplated  by this
Agreement  and the other  Documents,  (a) there will be issued  and  outstanding
3,326,740  shares  of Class A Common  Stock and  82,351shares  of Class B Common
Stock, all of which will be validly issued and fully paid and nonassessable, and
no shares of  Preferred  Stock;  and (b) there will be reserved for issuance (i)
upon exercise of the Warrants, 1,206,288 shares of Class B Common Stock and (ii)
upon conversion of shares of Class B Common Stock,  1,288,639  shares of Class A
Common  Stock.  Except as set forth  above,  at the Closing  Date,  after giving
effect  to the  transactions  contemplated  by  this  Agreement  and  the  other
Documents,  no Equity Interests of the Company will be issued or outstanding and
there  are  not,  and at the  Closing  Date  there  will  not be,  any  options,
agreements,  instruments or securities relating to the issued or unissued Equity
Interests of the Company or any  Subsidiary of the Company,  or  obligating  the
Company or any Subsidiary of the Company to issue,  transfer,  grant or sell any
Equity Interests in the Company or any Subsidiary.

Section 4.3  [Reserved]


Section 4.4  Authority

                  The Company has all necessary corporate power and authority to
execute  and deliver  this  Agreement  and each other  Document to which it is a
party,  to perform its obligations  hereunder and thereunder,  and to consummate
the  Transactions.  The execution and delivery of this Agreement and each of the
other  Documents  to which it is a party has been  authorized  by all  necessary
corporate action on the part of the Company,  and no other corporate  proceeding
or approval is required on the part of the Company to authorize  this  Agreement
or the other Documents to which it is a party or to consummate the Transactions.
This Agreement and each of the other Documents  (except the Registration  Rights
Agreement and the Stockholder Agreement) have been duly and validly executed and


                                       22
<PAGE>

delivered by the Company  and,  assuming the due  authorization,  execution  and
delivery  thereof by the Purchaser,  constitute the Company's  legal,  valid and
binding  obligation,  enforceable  against  the Company in  accordance  with its
terms,   except  for  (a)  the  effect   thereon  of   bankruptcy,   insolvency,
reorganization,  moratorium  or other  similar  laws now or  hereafter in effect
relating to or affecting creditors' rights generally and (b) limitations imposed
by federal or state law or equitable principles upon the specific enforceability
of any provision thereof and upon the availability of injunctive relief or other
equitable remedies.

Section 4.5  Authorization, Etc. of Shares

                  The Shares issuable to the Purchaser  hereunder have been duly
authorized  for  issuance  and,  when  issued  to the  Purchaser  in  accordance
herewith,  will be  validly  issued,  fully  paid,  and  non-assessable.  At the
Closing, the Purchaser will acquire good and valid title to the Shares, free and
clear of any Lien.  The Company has duly  authorized  and  reserved a sufficient
number of shares of Class A Common Stock for issuance upon exchange of the Class
B Common Stock  (including  Warrant Shares) and, when issued upon such exchange,
the  shares of Class A Common  Stock  will be  validly  issued,  fully  paid and
non-assessable.

Section 4.6  Authorization of Warrant Shares

                  The  Company has duly  authorized  and  reserved a  sufficient
number of  shares of Class B Common  Stock for  issuance  upon  exercise  of the
Warrants and exchange of the Warrant  Shares,  when issued upon  exercise of the
Warrants in accordance with the terms of the Westrec Warrant Agreement,  will be
validly issued, fully paid, and nonassessable.

Section 4.7  Authorization, Etc. of Registration Rights Agreement

                  The  Registration  Rights  Agreement has been duly  authorized
and, at the Closing Date, will be validly  executed and delivered by the Company
and, assuming the due authorization, execution and delivery thereof by the other
parties  thereto,  will  constitute  the  Company's  legal,  valid  and  binding
obligation, enforceable against the Company in accordance with its terms, except
for (a) the effect thereon of bankruptcy, insolvency, reorganization, moratorium
or other  similar  laws now or  hereafter  in effect  relating  to or  affecting
creditors' rights generally,  (b) limitations imposed by federal or state law or
equitable  principles upon the specific  enforceability of any provision thereof
and upon the availability of injunctive relief or other equitable remedies,  and
(c)  rights to  indemnification  thereunder  may be  limited by federal or state


                                       23
<PAGE>

securities laws or the policies underlying such laws.

Section 4.8  Authorization, Etc. of Stockholder Agreement

                  The Stockholder Agreement has been duly authorized and, at the
Closing Date, will be validly  executed and delivered by each signatory  thereto
(other  than the  Purchaser).  Assuming  the due  authorization,  execution  and
delivery thereof by the Purchaser, it will constitute a legal, valid and binding
agreement of each other signatory thereto,  enforceable  against each of them in
accordance  with  its  terms,  except  (a) the  effect  thereon  of  bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting  creditors' rights generally and (b) limitations
imposed  by  federal  or state law or  equitable  principles  upon the  specific
enforceability  of any provision thereof and upon the availability of injunctive
relief or other equitable remedies.

Section 4.9  No Violation or Conflict; No Default

                           (a) Neither the nature of the Company's business, the
execution,  delivery or performance of this Agreement or any other Document, the
Company's   compliance   with  its  respective   obligations   thereunder,   the
consummation  of the  transactions  contemplated  hereby  and  thereby,  nor the
issuance, sale or delivery of the Securities will:

                  (1)  violate or conflict with any provision  of the  Company's
         Charter Documents;

                  (2)  violate or  conflict  with any  statute,  law,  executive
         order, rule or regulation or any judgment, decree, order, regulation or
         rule  of  any  court  or  Governmental  Body   (collectively,   "Laws")
         applicable  to  the  Company  or  any  of  its  Subsidiaries  or  their
         respective  properties  or  assets,  except  where  such  violation  is
         reasonably not expected to have, singly or in the aggregate, a Material
         Adverse Effect; or

                  (3)  violate,  be in  conflict  with,  constitute  a breach or
         default  (or any event  which,  with the  passage  of time or notice or
         both, would become a default) under, permit the termination of, require
         the  consent  of any  Person  (other  than  as  disclosed  in  Schedule
         4.9(a)(3)  hereto)  under,  result in the creation or imposition of any
         Lien upon any property of the Company or any of its Subsidiaries under,
         result in the loss (by the Company or any  Subsidiary) or  modification


                                       24
<PAGE>

         in any manner adverse to the Company and its  Subsidiaries of any right
         or benefit under, or give to any other Person any right of termination,
         amendment, acceleration, repurchase or repayment, increased payments or
         cancellation   under,  any  mortgage,   indenture,   note,   debenture,
         agreement,  lease,  license,  permit,  franchise or other instrument or
         obligation,  whether  written or oral  (collectively,  "Contracts")  to
         which the  Company  or any of its  Subsidiaries  is a party or by which
         their properties may be bound or affected except is reasonably expected
         not,  individually  or in the  aggregate,  to have a  Material  Adverse
         Effect.

                           (b) Neither  the Company nor any of its  Subsidiaries
is in  default  (without  giving  effect to any  grace or cure  period or notice
requirement)  under any  Contract,  except  where  such  default  is  reasonably
expected  not,  individually  or in the  aggregate,  to have a Material  Adverse
Effect.

                           (c) The execution,  delivery and  performance of this
Agreement and the other  Documents by the Company and the other parties  thereto
(other  than  the   Purchaser)   will  not  require   any   consent,   approval,
authorization, or permit of, or filing with or notification to, any Governmental
Body under any Laws, except (i) for required filings under the Securities Act or
state  "blue  sky"  laws  as a  result  of the  exercise  of  rights  under  the
Registration  Rights  Agreement,  and (ii)  where the  failure  to  obtain  such
consents,  approvals,  authorizations  or  permits  or to make such  filings  or
notifications,  is reasonably expected not, individually or in the aggregate, to
have a Material  Adverse  Effect or to prevent or delay in any material  respect
consummation of the transactions  contemplated  hereby, or otherwise prevent the
Company from  performing  their  obligations  under this  Agreement or the other
Documents.

Section 4.10  No Material Adverse Change; Financial Statements

                           (a) Since  December 31, 1997,  (i) there has not been
any material  adverse change in the properties,  business,  operations,  assets,
condition  (financial or otherwise) or prospects of the Company; and (ii) except
for the authorization  and issuance of the Shares and the Warrants,  there shall
not have been any change in the Capital Stock of the Company or of the long-term
debt (other than resulting from scheduled payments thereunder),  or any increase
in the short-term debt, of the Company or the Partnerships.

                           (b) The  Company  has  delivered  to the  Purchaser a
consolidated  balance sheet of the Company and its  Subsidiaries  as of December
31, 1997, and the related  statements of income,  stockholders'  equity and cash
flows for the two fiscal years then ended,  together with the report  thereon of
Ernst & Young LLP, independent  certified public accountants,  on such financial


                                       25
<PAGE>

statements at and for the years ended  December 31, 1995 and 1996  including the
notes thereto.  Such financial  statements fairly present the financial position
and results of  operations  and cash flows of the  Company as of the  respective
dates and for the respective  periods referred to therein and have been prepared
in accordance with GAAP, consistently applied throughout the periods involved.

Section 4.11  Full Disclosure

                  Neither  this  Agreement  (including  without  limitation  the
representations and warranties incorporated herein by reference),  the financial
statements  referred to in Section  4.10(b),  any other Document,  nor any other
certificate  (addressed  to the  Purchaser)  furnished  by or on  behalf  of the
Company to the  Purchaser in connection  with the sale of the  Securities or the
consummation  of the  Transactions  contains any untrue  statement of a material
fact or  omits or will  omit to  state a  material  fact  necessary  to make the
statements   contained  herein  or  therein  not  misleading  in  light  of  the
circumstances under which they were made.

Section 4.12  Private Offering

                  Assuming the correctness of the representations and warranties
set forth in Section 5.1  hereof,  the offer and sale of the  Securities  to the
Purchaser  hereunder is exempt from the  registration  and  prospectus  delivery
requirements  of the  Securities  Act.  In the case of each offer or sale of the
Securities, neither the Company nor its representatives used any form of general
solicitation or general advertising, including advertisements, articles, notices
or other communications  published in any newspaper,  magazine or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
were invited by any general solicitation or general advertising.

                  The Purchaser is the sole purchaser of the Securities from the
Company.  No  securities  have been  issued and sold by the  Company  within the
six-month period  immediately  prior to the date hereof that would be integrated
with the sale of the Securities hereunder pursuant to the Securities Act.

Section 4.13  No Brokers

                  Neither the Company nor any of its  Affiliates has engaged any
broker,  finder,  commission agent, or other intermediary in connection with the
sale of the  Securities and the  Transactions  or is under any obligation to pay
any  broker's or finder's fee or  commission  or similar  payment in  connection
therewith,  other than  certain  compensation  that may be payable to Pearl Hill
Investments ("Pearl Hill") by the Company.


                                       26
<PAGE>

Section 4.14  Representations and Warranties

                  The Company's  representations and warranties (and the related
schedules)  in the  Documents  other  than  this  Agreement  will be  deemed  to
constitute  representations  and  warranties of the Company under this Agreement
with the same force and effect as the representations  and warranties  expressly
set forth herein.

Section 4.15  Litigation

                           (a) Except as set forth on Schedule 4.15, there is no
Action (including,  without limitation,  an investigation or partial proceeding,
such as a deposition),  whether  commenced,  or to the knowledge of the Company,
threatened or contemplated  ("Proceedings")  against or affecting the Company or
any of its Subsidiaries,  or the properties or assets of any of them, except for
Proceedings that, if finally  determined  adversely to the Company or any of its
Subsidiaries,  could  not  reasonably  be  expected  to have,  singly  or in the
aggregate,  a Material  Adverse  Effect.  In  addition,  there have not been any
developments  with respect to any of the Proceedings  disclosed on Schedule 4.15
which  would  reasonably  be  expected  in the future to have,  singly or in the
aggregate, a Material Adverse Effect. No Proceeding seeking to restrain, enjoin,
prevent the  consummation of, or otherwise  challenge this Agreement,  any other
Document or the Transactions is pending.

                           (b) Neither the Company nor any Subsidiary is subject
to any judgment,  order,  decree,  rule, or regulation of any Governmental  Body
that has had a Material  Adverse Effect or that is reasonably  expected to have,
singly or in the aggregate, a Material Adverse Effect.

Section 4.16  Labor Relations

                  To the  knowledge of the Company,  neither the Company nor any
of  its  Subsidiaries,  nor  any  Person  for  whom  the  Company  or any of its
Subsidiaries  is or may be  responsible,  by contract or by operation of law, is
engaged in any unfair labor practice that could  reasonably be expected to have,
singly or in the aggregate,  a Material  Adverse Effect.  There is (a) no unfair
labor practice charge or complaint  pending or, to the knowledge of the Company,
threatened  against  the Company or any of its  Subsidiaries,  or any Person for
whom the Company or any of its Subsidiaries is or may be responsible by contract
or by  operation  of law,  before  the  National  Labor  Relations  Board or any
corresponding  state,  local or foreign agency,  and no grievance or arbitration
proceeding  arising out of or under any  collective  bargaining  agreement is so
pending or  threatened,  (b) no strike,  labor  dispute,  slowdown  or  stoppage


                                       27
<PAGE>

pending or  threatened  against the Company or any of its  Subsidiaries,  or any
Person for whom  either  the  Company  or any of its  Subsidiaries  is or may be
responsible by contract or by operation of law, and (c) no union  representation
claim or question  existing  with respect to the employees of the Company or any
of  its  Subsidiaries,  or  any  Person  for  whom  the  Company  or  any of its
Subsidiaries is or may be responsible by contract or by operation of law, and no
union organizing  activities taking place.  Neither the Company,  nor any of its
Subsidiaries or any Person for whom the Company or any of its Subsidiaries is or
may be  responsible  by  contract  or by  operation  of law,  is a party  to any
collective bargaining agreement.

                  Except as disclosed on Schedule  4.16 or such as is reasonably
not expected to result in a Material Adverse Effect, neither the Company nor any
of its Subsidiaries has violated any applicable  federal,  state,  provincial or
foreign law  relating to  employment  or  employment  practices or the terms and
conditions of employment,  including, without limitation,  discrimination in the
hiring, promotion or pay of employees,  wages, hours of work, plant closings and
layoffs, collective bargaining,  immigration and occupational safety and health.
No charges with respect to or relating to the Company or any of its Subsidiaries
are  pending  before  the  Equal  Employment   Opportunity   Commission  or  any
corresponding  state agency,  and the Company and its  Subsidiaries  have at all
times  been  in  material  compliance  with  all  federal  and  state  laws  and
regulations  prohibiting  discrimination  in the  workplace,  including laws and
regulations  that  prohibit  discrimination  or  harassment  on account of race,
national origin, religion, gender, disability,  age, immigration status, workers
compensation status or otherwise.

Section 4.17  Taxes

                  Except as otherwise disclosed in Schedule 4.17:

                           (a) The Company has timely filed (or has had filed on
its  behalf) or will timely  file or cause to be timely  filed,  all Tax Returns
required by applicable  law to be filed on or before the Closing Date.  All such
Tax Returns and amendments thereto are or will be true, complete, and correct.

                           (b) The  Company has paid or,  where  payment was not
yet due, has  established  an adequate  accrual for the payment of all Taxes due
with respect to any period ending on or before December 31, 1997.

                           (c)  No  Audit  by a  Tax  Authority  is  pending  or
threatened  with  respect to any Tax  Returns  filed by, or Taxes due from,  the
Company  or any of its  Subsidiaries.  No  issue  has  been  raised  by any  Tax
Authority  in any Audit of or affecting  the Company or any of its  Subsidiaries


                                       28
<PAGE>

that if raised with respect to any other period not so audited could be expected
to result in a material  proposed  deficiency for any period not so audited.  No
deficiency or adjustment for any Taxes has been threatened,  proposed,  asserted
or assessed against the Company or any of its  Subsidiaries.  There are no liens
for Taxes upon the  assets of the  Company  or any of its  Subsidiaries,  except
liens for current Taxes not yet due.

                           (d) Neither  the Company nor any of its  Subsidiaries
has given nor been  requested  to give any  waiver of  statutes  of  limitations
relating to the payment of Taxes or executed  powers of attorney with respect to
Tax matters, which will be outstanding as of the Closing Date.

                           (e) Neither  the Company nor any of its  Subsidiaries
is a party to or bound by any tax sharing, cost sharing, or similar agreement or
policy relating to Taxes (other than the Tax Sharing Agreement).

                           (f) The Company has not  entered  into any  agreement
that would result in the disallowance of any tax deductions  pursuant to section
280G of the Code. No "consent"  within the meaning of section 341(f) of the Code
has been filed with respect to the Company.

Section 4.18  Environmental Matters

                           (a) To the Company's  knowledge,  the Company and its
Subsidiaries  are in compliance with all  Environmental  Laws,  which compliance
includes,  but is  not  limited  to,  the  possession  by the  Company  and  its
Subsidiaries of all permits and other governmental authorizations required under
applicable  Environmental  Laws,  and  compliance  with the terms and conditions
thereof,  except where such  non-compliance  could not reasonably be expected to
have a Material Adverse Effect. To the Company's knowledge,  neither the Company
nor any of its  Subsidiaries has received any  communication  (written or oral),
whether from a Governmental  Authority,  citizens group,  employee or otherwise,
that alleges that it is not in  compliance  with any  Environmental  Law. To the
Company's  knowledge,  there are no circumstances  that may prevent or interfere
with such compliance in the future.

                           (b)  To  the   Company's   knowledge,   there  is  no
Environmental  Claim  pending or  threatened  against  the Company or any of its
Subsidiaries  with respect to its  operations  or business or against any Person
whose  liability  therefor the Company or any of its  Subsidiaries  is or may be
responsible by contract or by operation of law.

                                       29
<PAGE>


                           (c) To the Company's knowledge,  there are no past or
present actions,  activities,  circumstances,  conditions,  events or incidents,
including,  without limitation,  the release, emission,  discharge,  presence or
disposal of any Material of Environmental  Concern, that could form the basis of
any Environmental  Claim against the Company or any of its Subsidiaries,  or any
Person  whose  liability  for any  Environmental  Claim the  Company  any of its
Subsidiaries is or may be responsible by contract or by operation of law.

                           (d) Without in any way limiting the generality of the
foregoing,  to the  Company's  knowledge  Schedule  4.18(d)  sets  forth (1) all
material permits,  licenses and other  governmental  authorizations  held by the
Company and its  Subsidiaries,  or required for their operations and businesses,
under any  Environmental  Law,  including  the  current  status of each  permit,
license and  authorization,  (2) all on-site and  off-site  locations  where the
Company or any Subsidiary has stored (to the extent such storage is regulated by
the Resource  Conservation  and Recovery Act of 1976,  as amended),  disposed or
arranged  for the  disposal  of  Materials  of  Environmental  Concern,  (3) all
underground storage tanks, and the capacity and contents of such tanks,  located
on  property  currently  owned,  leased  or  controlled  by the  Company  or any
Subsidiary,  (4) the location and  condition of any asbestos or lead  (including
furnishings or lead-based  paints) contained in or forming part of any building,
building component, structure or office space owned, leased or controlled by the
Company or any  Subsidiary,  and (5) all PCBs or  PCB-containing  items that are
used or stored at any property owned, leased or controlled by the Company or any
Subsidiary.

                           (e) To the Company's  knowledge,  the Company and its
Subsidiaries have all material permits, licenses, registrations,  authorizations
and approvals and financial assurance  (including,  without  limitation,  rights
under grandfather provisions,  exemptions, waivers and the like) ("Environmental
Permits") required to be held or provided by them under applicable Environmental
Laws in order to conduct their respective  businesses as currently operated.  To
the  Company's  knowledge,  the  Company  and its  Subsidiaries  are in material
compliance with the requirements of all such Environmental  Permits, and none of
them  have  been  notified  by any  Governmental  Authority  or has any basis to
believe  that any  Environmental  Permit is  reasonably  likely to be  modified,
suspended or revoked, or that any Environmental  Permit cannot be renewed in the
ordinary course of business.  Schedule 4.18(e) lists all Environmental  Permits,
if any, held by the Company and its Subsidiaries and all Environmental  Permits,
if any,  relating to them or the properties  currently owned or leased by any of
them.

                           (f)  The  Company  has  provided  to  the   Purchaser
complete and correct  copies,  or  originals,  of all  environmental  and worker
safety and health reports,  studies,  risk  assessments,  exposure  assessments,


                                       30
<PAGE>

investigations,  audits,  internal  assessments of potential  responsibility  or
liability  under   Environmental  Laws,  and  records  of  agency  audits  under
Environmental Laws which are in the possession of the Company,  its Subsidiaries
or Affiliates  relating to the  properties  currently  owned or leased by any of
them.

                           (g) The Company has made  available to the  Purchaser
copies  of  all  documents  relating  to  the  purchase  or  acquisition  by the
Partnerships  of their  respective  assets,  and has  provided to the  Purchaser
copies  of  all  other  contracts  or  agreements   allocating   responsibility,
obligation  or  liability  for  environmental  matters  to  the  Company  or any
Subsidiary  from a third  party  or  allocating  responsibility,  obligation  or
liability for environmental matters from any such Person to a third party.

Section 4.19  ERISA

                  Except as set forth on Schedule 4.19,  neither the Company nor
any other trade or business (whether or not incorporated) that together with the
Company or its  Subsidiaries  would be deemed a "single  employer"  (within  the
meaning of Section 4001 of ERISA (an "ERISA Affiliate") is a "party in interest"
(as defined in Section 3(14) of ERISA) or a  "disqualified  person"  (within the
meaning  of  Section  4975 of the Code),  with  respect  to any  profit-sharing,
pension or retirement  plan,  program,  arrangement  or agreement,  or any other
"employee  benefit  plan"  (within the meaning of Section  3(3) of ERISA) or any
"plan" (within the meaning of Section 4975 of the Code) (collectively, each such
plan, program, arrangement or agreement an "Employee Benefit Plan").

                  With respect to each Employee  Benefit Plan: (i) each Employee
Benefit Plan has been administered in compliance in all material respects,  with
its  terms   including,   but  not  limited  to,  any  provisions   relating  to
contributions thereunder, and is in compliance in all material respects with the
applicable provisions of ERISA, the Code and all other federal,  state and other
applicable laws, rules and regulations,  as they relate to such Employee Benefit
Plans;  (ii) no "employee  pension  benefit plan" (as defined in Section 3(2) of
ERISA) has been the subject of a "reportable  event" (as defined in Section 4043
of ERISA) and to the  knowledge of the Company,  there have been no  "prohibited
transactions" (as described in Section 4975 of the Code or Section 406 of ERISA)
with respect to any Employee  Benefit Plan which could  subject the Company to a
material tax,  penalty or other liability  under ERISA or the Code;  (iii) there
are no  proceedings,  suits or material  claims  (other than routine  claims for
benefits) pending or to the knowledge of the Company  threatened with respect to
any Employee Benefit Plan, the assets of any trust  thereunder,  or the Employee
Benefit  Plan  sponsor  with  respect to the design or operation of any Employee
Benefit Plan; (iv) to the knowledge of the Company, no condition exists or event


                                       31
<PAGE>

or transaction  has occurred in connection  with any Employee  Benefit Plan that
has  resulted  or is  reasonably  likely to result in the  Company  or any ERISA
Affiliate  incurring  any  liability,  fine  or  penalty  except  as  could  not
reasonably be expected to have,  singly or in the aggregate,  a Material Adverse
Effect;  (v) no Employee  Benefit  Plan is or ever has been  subject to, and the
Company has no liability under, Title IV of ERISA, whether actual or contingent;
and (vi) no amounts payable under any Employee  Benefit Plan will, in connection
with the transactions contemplated under this Agreement, the Related Agreements,
or  otherwise,  fail for any  reason to be  deductible  for  federal  income tax
purposes in an amount that could  reasonably be expected to result in a Material
Adverse Effect.

Section 4.20  Properties

                           (a) Neither the  Company nor any  Subsidiary  thereof
owns any real  property.  Schedule 4.20 sets forth a true,  correct and complete
list of all of the real  property  leased  or  occupied  by the  Company  or its
Subsidiaries indicating,  in each case, the address or legal description of such
real property and the legal and equitable owner of such real property. There are
no options,  rights of first refusal, rights of first offer or comparable rights
held by any  Person to  purchase  or  otherwise  acquire  a direct  or  indirect
interest in the Company's leasehold interest in any real property.

                           (b)  To  the  Company's  knowledge,  each  such  real
property is in material compliance with all Laws, including, without limitation,
all Laws with respect to zoning, building, fire and health codes, and sanitation
and  pollution  control.  Neither the Company  nor any of its  Subsidiaries  has
received  notice of, or has knowledge of, any condition  currently or previously
existing on any such real  property or any portion  thereof  which is reasonably
expected to give rise to any material  violation of any existing Law  applicable
to any of such real  property if it were  disclosed  to the  authorities  having
jurisdiction over any of such real property.

                           (c) Neither  the Company nor any of its  Subsidiaries
has knowledge of any pending or  contemplated  condemnation,  eminent  domain or
similar  proceeding  or special  assessment  which would affect any of such real
property or any part thereof.

                           (d) To the  knowledge of the Company,  each such real
property and the  improvements  thereon are in good condition and repair and are
free from any material defects,  including,  without limitation,  environmental,
erosion,   draining  or  soil  problems,   physical,   structural,   mechanical,
construction  or  electrical  defects,  defects in the parking  lot  pavement or


                                       32
<PAGE>

defects in utility systems. To the knowledge of the Company,  there are no leaks
in any of the roofs or any other portions of the  improvements  at any such real
properties,  and no infestation at any properties by rodents,  termites or other
insects or animals of any type that would have a material  adverse effect on the
value of any such real properties.

Section 4.21  Compliance with Laws

                  The Company and its Subsidiaries  have obtained and maintained
in good standing any licenses, permits, consents, and authorizations required to
be obtained by it under all Laws relating to their  respective  businesses,  the
absence of which is reasonably  expected to have, singly or in the aggregate,  a
Material   Adverse   Effect.   All  such  licenses,   permits,   consents,   and
authorizations remain in full force and effect, except insofar as the absence of
any of the foregoing could not reasonably be expected to have,  singly or in the
aggregate,  a Material  Adverse Effect.  The Company and its Subsidiaries are in
compliance,  in all material respects,  with all Laws, except to the extent that
any  failure to comply is not  reasonably  expected  to have a Material  Adverse
Effect.

Section 4.22  Insider Transactions

                  Except for the distribution of Warrants  contemplated  hereby,
since  December 31, 1997,  the Company has not entered into any  transaction  or
contract with any of its  Affiliates  or an Affiliate of any of its  Affiliates,
other than as described in Schedule 4.22, attached hereto.

Section 4.23  Certain Transfers

                  Before the Closing Date,  the Company  distributed  to Westrec
Financial  (i) all  limited  partnership  interests  held by the  Company  in PS
Marinas I, a California Limited Partnership,  PS Marinas 3, a California Limited
Partnership,  PS Marinas 4, a California Limited Partnership,  Tower Park Marina
Investors,  L.P., a California  limited  partnership  and (ii) all Capital Stock
owned by the  Company in Westrec  Equities,  Inc. As of the  Closing  Date,  the
Company holds no legal or beneficial interest in any Partnership.

Section 4.24  Insurance Plans

                  Schedule 4.24,  attached  hereto,  contains a true and correct
accounting of the earnings of Westrec Financial  derived,  in the insurance plan
year ending June 30, 1997, from the workers compensation and group medical plans
maintained  for  employees of the Company and its  Subsidiaries  and an estimate
reasonably prepared by Company and reasonably acceptable to the Purchaser of the
aggregate  amount of all claims  expected to be incurred by those plans for that


                                       33
<PAGE>

insurance plan year.

Section 4.25  Southwinds

                  As of  the  date  hereof  and  on the  Closing  Date,  Westrec
Financial owns, free and clear of all liens,  claims, and encumbrances,  100% of
the Capital Stock of Westrec  Southwinds,  Inc.,  and Westrec  Southwinds,  Inc.
owns, free and clear of all liens,  claims,  and encumbrances,  a 10% membership
interest in Southwinds.

Section 4.26 Survival of Representations and Warranties

                  All of the Company's  representations and warranties hereunder
and under the other  Documents  will survive the  execution  and delivery of the
same through and until the third  anniversary  of the Closing Date,  except that
the  representations  and warranties  contained in Sections 4.1 through 4.8 will
survive indefinitely and the representations and warranties in Section 4.17 will
survive  until the  expiration of the  applicable  statute of  limitations  with
respect to such Tax Returns.  All other  obligations  of the Company  under this
Agreement will expire upon consummation of the Closing.


                                    ARTICLE V
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

                  The Purchaser represents and warrants to the Company that:

Section 5.1  Purchase for Own Account

                  The  Purchaser  is  purchasing  Securities  solely for its own
account and not as nominee or agent for any other Person and not with a view to,
or for  offer or sale in  connection  with,  any  current  distribution  thereof
(within  the  meaning  of the  Securities  Act) that  would  cause the  original
purchase of the  Securities  to be in  violation of the  securities  laws of the
United  States of  America  or any  state  thereof.  The  foregoing  is  without
prejudice to the Purchaser's  right at all times to sell or otherwise dispose of
all or any part of the Securities pursuant to a registration statement under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act.


                                       34
<PAGE>

Section 5.2  Accredited Investor

                  The Purchaser is knowledgeable,  sophisticated and experienced
in business and  financial  matters and in investing in privately  held business
enterprises; acknowledges that the Securities have not been registered under the
Securities Act and  understands  that the Securities  must be held  indefinitely
unless they are  subsequently  registered under the Securities Act or their sale
is permitted  pursuant to an exemption from such  registration  requirement;  is
able to bear  the  economic  risk of its  investment  in the  Securities  and is
presently  able to  afford  the  complete  loss of  such  investment;  and is an
"accredited   investor"  as  defined  in  Regulation  D  promulgated  under  the
Securities Act.

Section 5.3  Authorization

                  The Purchaser has taken all actions  necessary to authorize it
(i) to execute,  deliver and perform all of its obligations under this Agreement
and the other Documents, and (ii) to consummate the Transactions. This Agreement
and each of the  other  Documents  have  been  duly  and  validly  executed  and
delivered by the Purchaser and, assuming the due authorization,  execution,  and
delivery thereof by the Company,  constitutes the Purchaser's  legal,  valid and
binding obligation,  enforceable against it in accordance with its terms, except
for (a) the effect thereon of bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of creditors generally
and (b) limitations imposed by federal or state law or equitable principles upon
the specific enforceability of any provision hereof and upon the availability of
injunctive relief or other equitable remedies.

Section 5.4  Capitalization

                           (a) The  authorized  Capital  Stock of the  Purchaser
consists of 25 million shares of preferred stock and 75 million shares of common
stock. As of the Closing Date, there will be issued and outstanding no shares of
preferred  stock and  10,342,009  shares of common  stock,  all of which will be
validly  issued  and fully  paid and  nonassessable.  Upon the  exercise  of any
Warrants,  the Purchaser  will reserve  adequate  shares of its common stock for
issuance  upon  exercise of any  warrant  issued  pursuant to the Sachs  Warrant
Agreement.  Except as set forth above, at the Closing Date, no Equity  Interests
of the  Purchaser  will be issued or  outstanding  and there are not, and at the
Closing  Date  there  will  not be,  any  options,  agreements,  instruments  or
securities  relating to issued or unissued  Equity  Interests  of the  Purchaser
obligating the Purchaser to issue, transfer,  grant or sell any Equity Interests
in the Purchaser.


                                       35
<PAGE>


Section 5.5  No Brokers

                  Neither the  Purchaser nor any of its  Affiliates  has engaged
any broker,  finder,  commission agent, or other intermediary in connection with
the sale of the  Securities and the  Transactions  or is under any obligation to
pay any broker's or finder's fee,  commission,  or similar payment in connection
therewith, other than certain compensation that may be payable to Pearl Hill.

Section 5.6  Survival of Representations and Warranties

                  All  of  the   Purchaser's   representations   and  warranties
hereunder and under the other  Documents will survive the execution and delivery
of the same through and until the third anniversary of the Closing Date.

Section 5.7  Investigation

                  The Purchaser has  conducted an  investigation  of the Company
and its  Subsidiaries  and  acknowledge  that the  Company  has  provided to the
Purchaser  access to the  employees,  books,  and records of the Company and its
Subsidiaries as the Purchaser has requested in connection therewith.


                                   ARTICLE VI
                                    COVENANTS

Section 6.1  Further Actions

                  During the period from the date  hereof to the  Closing  Date,
each of the parties shall,  and shall cause their  respective  Affiliates to (a)
use their best efforts to take all actions necessary or appropriate to cause its
representations  and  warranties  contained  in Articles  IV or V  respectively,
hereof or  incorporated  by reference  herein or contained  or  incorporated  by
reference in any of the other Documents to be true and correct as of the Closing
Date (except with respect to any  representation  that  specifically  relates to
another  date),  both  before  and  after  giving  effect  to  the  transactions
contemplated  by this  Agreement  and  the  other  Documents,  as if made on the
Closing Date, and (b) take, or cause to be taken,  all action,  and do, or cause
to be done, all things  necessary,  proper or advisable under applicable law and
regulations to consummate and make effective the  Transactions  including  using
their best efforts to obtain all consents and  approvals  that are  necessary to
the  consummation  of the  Transactions,  and to remove all  injunctive or other
impediments or delays, legal or otherwise thereto.


                                       36
<PAGE>


Section 6.2  Additional Covenants of the Company

                           (a)  Between  the  date  of  this  Agreement  and the
Closing Date, the Company (i) shall and shall cause each of its Subsidiaries to,
conduct its business consistent with past practice and in the ordinary course of
its normal day-to-day operations,  and (ii) shall not take, or permit any of its
Subsidiaries  to  take,  any of the  actions  set  forth in  Section  3.6 of the
Stockholder Agreement, except as specifically contemplated by this Agreement and
the other Documents or with the prior written approval of the Purchaser.

                           (b) As soon as  practicable  after the  Closing,  the
Company and its Affiliates will take all necessary action to cause the operation
of the workers  compensation and group medical plans maintained for employees of
the  Company  and its  Subsidiaries  to be  transferred  to the  Company or to a
wholly-owned Subsidiary of the Company.

Section 6.3  No General Solicitation

                  Neither the Company, nor any of its Affiliates, nor any Person
acting on its or any of their behalf has engaged or will engage,  in  connection
with the  offering of the  Securities,  in any form of general  solicitation  or
general advertising within the meaning of Rule 502(c) under the Securities Act.

Section 6.4  The Purchaser's Put Right

                  (a) If,  as of the  210th day  after  the  Closing  Date,  the
Purchaser or any designated Affiliate thereof shall not have acquired,  on terms
reasonably  acceptable to the Purchaser,  (i) with respect to each  Partnership,
either all general  partnership  interests therein,  all of the Capital Stock of
each of its general  partners,  or  substantially  all of its  assets,  (ii) the
interest in Southwinds held on the Closing Date by Westrec Southwinds,  Inc., or
all of the Capital Stock of the entity holding that interest,  or  substantially
all of Southwind's  assets, and (iii) all the limited  partnership  interests in
any Partnership held by the Company or any Affiliate thereof, then the Purchaser
may, no later than the 240th day after the Closing  Date (or if that date is not
a Business Day,  then the first  Business  Date  thereafter),  deliver a written
notice (a "Put Notice") to the Company  containing the  information set forth in
Section 6.4(b).

                  (b) The Put Notice will advise the Company of the  Purchaser's
intention  to exercise  its right under this Section 6.4 to cause the Company to
repurchase  the  Securities,  specify  a date  (the  "Put  Date")  on which  the
repurchase  is to occur (which date may be no sooner than the 15th  Business Day


                                       37
<PAGE>

after the date of delivery of the Put Notice), and include wire instructions for
the Company's payment in connection therewith.

                  (b) If the  Purchaser  timely  delivers  a Put  Notice  to the
Company, then on the Put Date:

                  (1) the  Purchaser  will  deliver to the Company  certificates
                  representing all of the Purchaser's Securities,  together with
                  a  certificate  from  the  chief  executive  officer  or chief
                  financial  officer  of  the  Purchaser   certifying  that  the
                  Securities  are  free  and  clear  of  any  lien,   claim,  or
                  encumbrance of any Person; and

                  (2)  the  Company  will  deliver  to the  Purchaser,  by  wire
                  transfer as  specified  in the Put Notice,  an amount equal to
                  the Cash Purchase Price paid by the Purchaser.

Section 6.5 Class B Common Stock Purchase

                  No later than 10 days after  receipt of a  Conversion  Notice,
the Company will exchange the number of shares of Class B Common Stock specified
therein for an equal  number of shares of Class A Common  Stock,  and will issue
the shares of Class A Common Stock to the Person  designated  in the  Conversion
Notice.  The parties hereby  acknowledge that the rights granted in this Section
6.5 will be automatically assigned to any party to whom shares of Class B Common
Stock are transferred in a transfer  permitted under the Stockholder  Agreement,
and that,  notwithstanding  any other  provision of this  Agreement,  such party
shall be considered a third-party beneficiary with respect to this Section 6.5.


                                   ARTICLE VII
                                   TERMINATION

Section 7.1  Termination Events

                  This Agreement may be terminated,  by written notice delivered
before or at the Closing, only as follows:

                           (a) by the Company,  if the Purchaser has committed a
material  breach of this  Agreement,  or by the  Purchaser,  if the  Company has


                                       38
<PAGE>

committed a material breach of this Agreement;

                           (b) by the  Company,  if  any  of the  conditions  in
Section 3.2 has not been  satisfied or waived as of the Closing  Date, or if the
satisfaction  of any such  condition is or becomes  impossible  (other than as a
result of the Company's  failure to perform its  obligations  hereunder) and the
Company has not waived the condition;

                           (c) by the  Purchaser,  if any of the  conditions  in
Section 3.1 has not been  satisfied or waived as of the Closing  Date, or if the
satisfaction  of any such  condition is or becomes  impossible  (other than as a
result of the Purchaser's failure to perform its obligations  hereunder) and the
Purchaser has not waived the condition; or

                           (d)  by  mutual   consent  of  the  Company  and  the
Purchaser.

Section 7.2  Effect of Termination

                  Each  party's  right of  termination  under  Section 7.1 is in
addition  to any other  rights it may have  under  this  Agreement  or any other
Document,  and the exercise of the right to  terminate  will not  constitute  an
election  of  remedies  or a waiver of any other  right.  If this  Agreement  is
terminated under Section 7.1, all further obligations of the parties hereto will
terminate,  except  that the  terminating  party's  right to  pursue  all  legal
remedies will survive the termination.


                                  ARTICLE VIII
                                  MISCELLANEOUS

Section 8.1  Notices

                  All  notices,   demands,   requests,   consents  or  approvals
(collectively,  "Notices")  required or permitted to be given hereunder or which
are given with  respect to this  Agreement  must be in  writing  and  personally
delivered or mailed, registered or certified, return receipt requested,  postage
prepaid (or by a  substantially  similar  method),  or  delivered by a reputable
overnight courier service with charges prepaid, or transmitted by hand delivery,
telegram,  telex or  facsimile,  addressed as set forth  below,  or to any other
address (and with any other copy) as a party may have specified most recently by
written Notice. Notice will be deemed given or delivered on the date of delivery
or  transmission  if personally  delivered or transmitted by telegram,  telex or
facsimile.  Notice  otherwise  sent as provided  herein shall be deemed given or
delivered  on the third  Business Day  following  the date mailed or on the next


                                       39
<PAGE>

Business  Day  following  delivery  thereof  to a  reputable  overnight  courier
service.

         To the Company:

                  Westrec Marina Management, Inc.
                  16633 Ventura Boulevard, 6th Floor
                  Encino, California  91436
                  Attention: Michael M. Sachs
                  Facsimile: (818) 907-1104

         with a copy (which shall not alone constitute Notice) to:

                  Gibson, Dunn & Crutcher LLP
                  2029 Century Park East
                  Suite 4000
                  Los Angeles, CA  90067
                  Attention: Russell C. Hansen, Esq.
                  Facsimile: (310) 551-8741

         To the Purchaser:

                  Commercial Assets, Inc.
                  3410 South Galena Street
                  Suite 210
                  Denver, Colorado  80231
                  Attention:  President
                  Facsimile: (303) 614-9401

         with a copy (which shall alone not constitute Notice) to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  300 South Grand Avenue, Suite 3400
                  Los Angeles, California  90071
                  Attn:  Thomas C. Janson, Jr., Esq.
                  Fax:  (213) 687-5600

Section 8.2  Successors and Assigns

                  This  Agreement  shall  inure to the benefit of and be binding
upon the  successors  and assigns of each of the parties  hereto  which  acquire


                                       40
<PAGE>

Common Stock in a transfer permitted under the Stockholder Agreement.

Section 8.3  No Waivers; Amendments

                           (a) No  failure  or delay by any party in  exercising
any right, power, or privilege hereunder shall operate as a waiver thereof,  nor
shall any  single or  partial  exercise  thereof  preclude  any other or further
exercise  thereof  or the  exercise  of any other  right,  power,  or  privilege
provided by law.  Notwithstanding the foregoing,  neither the Company nor any of
its officers, employees, agents, stockholders,  Affiliates,  consultants,  legal
advisors,  or  representatives  shall have any  liability or  obligation  to the
Purchaser in respect of any statement, representation,  warranty or assurance of
any kind made by the Company, its representatives,  or any other Person,  except
for the representations and warranties specifically set forth herein;  provided,
that no  provision  of this  Agreement  will act to  relieve  the  Company,  its
representatives, or any other Person from liability for fraud.

                           (b) This  Agreement  may not be amended or  modified,
nor may any  provision  hereof be  waived,  other  than by a written  instrument
signed by the Company and the Purchaser.

Section 8.4  Counterparts

                  This  Agreement may be signed in  counterparts,  each of which
shall  constitute an original and which  together  shall  constitute one and the
same agreement.

Section 8.5  Section Headings

                  The  section  headings  contained  in this  Agreement  are for
reference  purposes only and shall not affect the meaning or  interpretation  of
this Agreement.

Section 8.6 GOVERNING LAW; SUBMISSION TO JURISDICTION

                  THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF  CALIFORNIA,  AS  APPLIED  TO  CONTRACTS  MADE AND
PERFORMED  WITHIN  THE STATE OF  CALIFORNIA,  WITHOUT  REGARD TO  PRINCIPLES  OF
CONFLICT OF LAWS.

                  EACH PARTY HERETO HEREBY IRREVOCABLY  SUBMITS TO THE EXCLUSIVE
JURISDICTION OF ANY CALIFORNIA  STATE COURT SITTING IN THE COUNTY OF LOS ANGELES
OR ANY UNITED STATES  DISTRICT  COURT IN THE CITY OF LOS ANGELES,  IN RESPECT OF


                                       41
<PAGE>

ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS
FOR  ITSELF  AND IN  RESPECT OF ITS  PROPERTY,  GENERALLY  AND  UNCONDITIONALLY,
JURISDICTION  OF THE  AFORESAID  COURTS.  EACH  PARTY  AGREES  THAT IT WILL  NOT
COMMENCE  ANY  SUCH  ACTION  IN  ANY  OTHER  JURISDICTION.  THE  PARTIES  HERETO
IRREVOCABLY  WAIVE,  TO THE FULLEST EXTENT THAT THEY MAY DO SO UNDER  APPLICABLE
LAW,  ANY  OBJECTION  THAT THEY MAY NOW OR  HEREAFTER  HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH  ACTION  BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
COURT CONSTITUTES AN INCONVENIENT FORUM.

Section 8.7  Entire Agreement

                  This Agreement, together with the other Documents, constitutes
the entire agreement and understanding  among the parties hereto with respect to
the  subject  matter  hereof  and  thereof  and  supersedes  any and  all  prior
agreements and  understandings,  written or oral, relating to the subject matter
hereof.

Section 8.8  Severability

                  Any   provision   of  this   Agreement   that  is  invalid  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or  unenforceability  without rendering invalid
or  unenforceable  the remaining  provisions of this  Agreement or affecting the
validity or  enforceability  of any  provision  of this  Agreement  in any other
jurisdictions,  it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.

Section 8.9  Attorneys' Fees

                  Subject to Section 2.7, if any litigation is commenced between
the parties  hereto or their  representatives  concerning  any provision of this
Agreement or the rights and duties of any person or entity hereunder,  solely as
between the parties hereto or their successors,  the party or parties prevailing
in that  proceeding  will be  entitled  to the  reasonable  attorneys'  fees and
expenses of counsel and court costs incurred by reason of such litigation.

                                       42
<PAGE>

Section 8.10    Representations and Warranties

                  The  disclosure  of any  information  on any  Schedule to this
Agreement  shall be deemed to constitute the  disclosure of such  information on
all other schedules to this Agreement applicable to such information.

Section 8.11     Knowledge

                  Whenever a representation or warranty is stated to be based on
the knowledge of a party, such phrase refers to whether a member of such party's
senior management has or reasonably  should have acquired actual  knowledge,  in
the performance of his or her duties in that capacity,  of the matters involved.
As used  herein,  "senior  management"  means any  officer of the Company or the
Purchaser,  as the case may be, with a title of vice president or its equivalent
or higher.

                                       43
<PAGE>




                  IN WITNESS  WHEREOF,  this Securities  Purchase  Agreement has
been duly  executed by the parties set forth below as of the date first  written
above.

                                    WESTREC MARINA MANAGEMENT, INC.


                                     By:_________________________________
                                          Name:
                                          Title:


                                     COMMERCIAL ASSETS, INC.


                                     By: ________________________________
                                           Name:
                                           Title:






<PAGE>

                                    EXHIBIT A