STOCK PURCHASE AGREEMENT

         THIS STOCK  PURCHASE  AGREEMENT (the  "Agreement")  is made and entered
into  as of  the  7th  day  of  March,  1997,  by  and  among  BUCKHEAD  AMERICA
CORPORATION, a Delaware corporation ("Purchaser"), and shareholders set forth on
Exhibit 8.1, (hereinafter collectively referred to as "Seller").

                                   WITNESSETH:

         WHEREAS,  Seller owns all of the issued and  outstanding  capital stock
("Stock") of The Lodge Keeper Group, Inc., an Ohio corporation, ("Company");

         WHEREAS, Seller desires to sell to Purchaser,  and Purchaser desires to
purchase from Seller, the Stock;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  herein  contained,  and other good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

                                    ARTICLE I

                                PURCHASE AND SALE

         SECTION 1.1 Agreement to Purchase and Sell Stock.  Subject to the terms
and  conditions  of this  Agreement,  each  individual  Seller agrees to sell to
Purchaser,  and Purchaser  agrees to purchase from Seller,  on the Closing Date,
all of the  Stock  which  said  Seller  owns,  free and  clear  of all  security
interests,  pledges,  liens,  encumbrances,  charges,  or  restrictions  on  the
ownership,  use, voting,  transfer,  receipt of dividends or other attributes of
ownership.

         SECTION 1.2       Purchase Price for Stock.

                  (a) Payment.  The purchase price for the Stock will be paid to
Seller by  Purchaser  as follows:  (i) Nine  Hundred  Seventy-Five  Thousand and
No/100 Dollars  ($975,000.00) by cashier's checks,  wire transfer or other good,
immediately  available  U.S.  funds (the "Cash");  and (ii) Seller shall receive
Nine Hundred  Seventy-Five  Thousand and No/100 Dollars  ($975,000.00)  worth of
unregistered  shares (the "Shares") of Purchaser's  common stock, such Shares to
be represented by Seller's customary certificate for similar shares.

         The number of Shares shall be determined by dividing $975,000.00 by the
"value" of the  Shares.  The  "value"  of the  Shares  shall be deemed to be the
greater of  Purchaser's  (i) per share  "book  value" or (ii) per share  "market
value."





<PAGE>



         As used herein,  the term "book value" shall mean the net book value of
Purchaser  as reflected  on  Purchaser's  Form 10-Q or Form 10-KB filed with the
United States Securities Exchange Commission closest in time prior to Closing.

         As used herein,  the term "market value" shall mean the average selling
price of Purchaser's  common stock on the NASDAQ  national market system for the
period  beginning ten (10) "business  days" prior to Closing and terminating ten
(10) "business days" (as defined in Section 10.6 below) after Closing.

         If (x)  Purchaser's  per share  "market  value" is less than  $6.00 per
share,  and (y) Purchaser's  per share "book value" is greater than  Purchaser's
per share  "market  value",  then in  calculating  the  "value"  of the  Shares,
Purchaser's  per share "book  value"  shall be reduced by an amount equal to the
difference between $6.00 and Purchaser's per share "market value.

         The Shares  shall be  registered  under  applicable  federal  and state
securities laws pursuant to that certain  Registration  Rights  Agreement by and
between Seller and Purchaser,  to be executed and delivered at Closing, the form
of which shall be mutually agreed upon by Seller and Purchaser.

                  (b) Adjustments to Purchase Price.  The Purchase Price will be
reduced by an amount  equal to the  diminution  in net worth of the Company as a
result of the  transfer  of the  assets as set  forth in  Section  4.16 and said
reduction shall be taken 50/50 from the Shares and the Cash.

                  (c) Delivery of Cash and Stock.  Purchaser  shall  deliver the
Cash and  Stock to each  Seller in the  amounts  set  forth on  Exhibit  1.2(c),
attached hereto and  incorporated  herein by this  reference.  The Cash shall be
delivered  at Closing and the Shares  shall be  delivered  twenty days after the
closing.

         SECTION 1.3 Closing.  The closing of the  transactions  contemplated in
this Agreement (the "Closing") shall take place at the offices of Arnall, Golden
& Gregory  in  Atlanta,  Georgia  on May 1, 1997 or such  other date or place as
shall be mutually acceptable to the parties (the "Closing Date").


                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         As an inducement to the  Purchaser to enter into this  Agreement,  each
Seller hereby jointly and severally  represents and warrants to Purchaser  (each
of  which  representation  and  warranty  is  material  to and  relied  upon  by
Purchaser) as follows:





                                       -2-

<PAGE>




         SECTION  2.1  Disclosure  Schedule.  Seller  shall cause the Company to
deliver  to  Purchaser  no later  than  fifteen  (15)  business  days  after the
execution of this  Agreement by all parties  hereto a schedule (the  "Disclosure
Schedule")   containing  certain  information  regarding  the  Company  and  the
Subsidiaries  (defined  below) as indicated at various places in this Agreement.
The  Disclosure  Schedule  shall be deemed for all purposes of this Agreement to
constitute  an  integral  part of this  Agreement  and the  representations  and
warranties of Seller, contained herein.

         SECTION 2.2 Incorporation and Qualification of the Company. The Company
is a corporation duly incorporated,  validly existing and in good standing under
the  laws of the  State  of Ohio  and has all  corporate  power  and  authority,
together with all material governmental licenses,  authorizations,  consents and
approvals,  required  to own,  operate  or lease the  properties  and assets now
owned,  operated  or leased by the  Company  and to carry on its  business.  The
Company is duly  qualified as a foreign  corporation  to do business,  and is in
good  standing,  in each  jurisdiction  where the  character of its  properties,
owned,   operated  or  leased  or  the  nature  of  its  activities  makes  such
qualification  necessary  and where the failure to qualify would have a Material
Adverse Effect (defined below) upon the Company.  All jurisdictions in which the
Company is  qualified as a foreign  corporation  are set forth in Section 2.2 of
the Disclosure Schedule.

         For  purposes of this  Agreement,  "Material  Adverse  Effect"  means a
material  adverse effect on the condition  (financial or  otherwise),  business,
assets, results of operations or prospects of the Company taken as a whole.

SECTION 2.3 Capital Stock of the Company.  The  authorized  capital stock of the
Company  consists of 10,000 shares and all of the issued and outstanding  shares
of capital stock of the Company  consists of 1,088.33 shares of Common Stock, no
par  value  per  share.  Each  outstanding  share of the  Stock  has  been  duly
authorized and validly issued, and is fully paid and non-assessable.  Seller now
has, and will have on the Closing Date,  good, valid and marketable title to the
Stock  free and  clear of any  Stock  Encumbrances  (defined  below).  There are
outstanding  (i) no shares of capital  stock or other voting  securities  of the
Company  except as set forth in this  Section  2.3,  (ii) no  securities  of the
Company  convertible  into or exchangeable for shares of capital stock or voting
securities of the Company,  (iii) no options (including employee stock options),
warrants or right of  conversion or other rights,  agreements,  arrangements  or
commitments obligating,  or which may obligate, the Company to sell or issue any
additional  shares of the  Company's  capital  stock,  (iv) no obligation of the
Company  to issue  any  voting  securities  or  securities  convertible  into or
exchangeable  for capital  stock or voting  securities of the Company and (v) no
equity  equivalents,  interests in the  ownership or earnings,  or other similar
rights of or with respect to the Company (the items in clauses (i), (ii), (iii),
(iv) and (v) being referred to collectively as the "Company Securities").* There
are no outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any of the Company  Securities.  Upon Closing,  Seller shall transfer to
Purchaser all right, title and interest in and

* except as otherwise set forth on Scheduls 2.3 of the Disclosure Schedule





                                       -3-

<PAGE>



to the  Stock  free  and  clear  of any  Stock  Encumbrances.  As  used  in this
Agreement,  "Stock Encumbrances" shall mean any security interest, pledge, lien,
charge, adverse claim of ownership or use, or any restriction on ownership, use,
voting, transfer or receipt of dividends, or any encumbrance of any kind.

         SECTION 2.4       Subsidiaries and Other Business Entities.

                  (a) Section 2.4 of the Disclosure  Schedule is a true, correct
and  complete   list  of  all   corporations,   limited   liability   companies,
partnerships,  joint  ventures or other  business  entities  (collectively,  the
"Subsidiaries") in which the Company owns, of record or beneficially, any direct
or indirect equity  interest or any right,  (contingent or otherwise) to acquire
the same.

                  (b) Section  2.4 of the  Disclosure  Schedule  lists the name,
jurisdiction,  date of  incorporation,  authorized  stock and stock ownership of
each Subsidiary.

                  (c) Each  Subsidiary (i) is a corporation  duly  incorporated,
validly  existing  and in  good  standing  under  the  laws  of  its  respective
jurisdiction  of  incorporation,  (ii) has all  corporate  power and  authority,
together with all material governmental licenses,  authorizations,  consents and
approvals,  required  to own,  operate  or lease the  properties  and assets now
owned, operated or leased by such Subsidiary and to carry on its business in all
respects as currently  conducted by such  Subsidiary and (iii) is duly qualified
as a  foreign  corporation  to do  business  and is in  good  standing,  in each
jurisdiction where the character of its properties owned,  operated or leased or
the nature of its activities  makes such  qualification  necessary and where the
failure to qualify would have a Material  Adverse Effect upon the Company or its
Subsidiaries.

                  (d) The  Company  or a  Subsidiary  owns all of the issued and
outstanding shares of capital stock of each Subsidiary and such shares are fully
paid and nonassessable.  There are outstanding (i) no shares of capital stock or
other voting  securities of any  Subsidiary  except as set forth in this Section
2.4(d),  (ii) no securities of any Subsidiary  convertible  into or exchangeable
for shares of capital stock or voting  securities of such  Subsidiary,  (iii) no
options (including employee stock options),  warrants or rights of conversion or
any other  rights,  agreements,  arrangements  or  commitments  relating  to any
subsidiary  obligating a Subsidiary to issue additional shares of capital stock,
(iv)  no  obligation  of any  Subsidiary  to  issue  any  voting  securities  or
securities  convertible  into  or  exchangeable  for  capital  stock  or  voting
securities of such  Subsidiary and (v) no equity  equivalents,  interests in the
ownership  or  earnings,  or other  similar  rights  of or with  respect  to any
Subsidiary (the items in clauses (i), (ii),  (iii),  (iv) and (v) being referred
to collectively as the "Subsidiary Securities") except as otherwise set forth on
Section  2.4(d)(v)  of  the  Disclosure  Schedule.   There  are  no  outstanding
obligations  of any Subsidiary to  repurchase,  redeem or otherwise  acquire any
Subsidiary Securities.





                                       -4-

<PAGE>



         SECTION 2.5  Authority of Seller;  Enforceability.  This  Agreement has
been duly authorized,  executed and delivered by the Seller,  and this Agreement
(and the obligations of the Seller set forth herein) constitute the legal, valid
and  binding  obligation  of the  Seller,  enforceable  against  the  Seller  in
accordance  with its  terms,  subject  to the  effect,  if any,  of  bankruptcy,
insolvency,  reorganization,  moratorium  and other  similar laws  affecting the
rights of creditors  generally and the effect, if any, of general  principles of
equity.

         SECTION  2.6 No  Conflicts;  Consents.  Section  2.6 of the  Disclosure
Schedule sets forth all of the  consents,  approvals,  authorizations,  filings,
notifications  and other actions necessary to consummate all of the transactions
described herein.  Assuming all consents,  approvals,  authorizations  and other
actions  described in Section 2.6 of the Disclosure  Schedule have been obtained
and all  filings  and  notifications  listed in  Section  2.6 of the  Disclosure
Schedule  have been  made,  the  execution,  delivery  and  performance  of this
Agreement by Seller does not and will not:

                  (a) violate or conflict with the certificate of incorporation,
bylaws or other organizational documents of the Company;

                  (b) conflict with or violate any law,  rule or regulation  of,
or any order, writ, judgment, injunction, decree, stipulation,  determination or
award  entered by or with,  any  foreign  federal,  state or local  governmental
authority,  body, agency official,  regulatory or administrative agency, body or
official, or governmental commission,  court, tribunal, body, agency official or
arbitral  body  (singularly  and  collectively,  the  "Governmental  Authority")
applicable to Seller or the Company or the business of the Company;

                  (c)  conflict  with,  result in any  breach of,  constitute  a
material  default  (or  constitute  an event  which with the giving of notice or
lapse of time, or both, would become or result in a conflict, breach or default)
under, or give to others any rights of termination,  amendment,  acceleration or
cancellation  of Contract  (defined in Section  2.16 below),  Lease  (defined in
Section 2.15 below),  agreement or obligation to which the Company or the Seller
is subject or bound, or result in the creation of any security interest, pledge,
mortgage,  lien, charge, adverse claim of ownership or use or any encumbrance of
any kind (collectively, the "Encumbrance") on the stock or Company's assets.

         SECTION 2.7  Corporate  Records of the Company.  The stock  records and
minute book of the Company  heretofore  furnished  to  Purchaser  by the Company
correctly  show the  total  number of shares of its  capital  stock  issued  and
outstanding and all corporate  action taken by the directors and shareholders of
the Company (including actions taken by consent without a meeting),  and contain
true,  correct  and  complete  copies  or  originals  of  the  certification  of
incorporation and bylaws and all amendments thereto.






                                       -5-

<PAGE>



         SECTION  2.8  Financial  Statements.  Section  2.8  of  the  Disclosure
Schedule is true, correct and complete consolidated financial statements for the
fiscal years 1994,  1995,  and 1996 and for the month  ending  December 31, 1996
(the  "Financial  Statements"),  including  a  consolidated  balance  sheet (the
"Balance  Sheet")  as of  December  31,  1996 (the  "Balance  Sheet  Date")  and
consolidated  statements of income and retained  earnings and cash flows for the
years then ended,  together with the notes  thereto for the Company.  All of the
Financial  Statements  and the Balance  Sheet  (including  any related notes and
schedules) have been prepared in accordance with generally  accepted  accounting
principles applied on a basis consistent with the prior years of the Company and
present fairly the financial condition of the Company as of the respective dates
thereof and the results of its operations for the periods then ended.

                  All  of  the  books  and  records  of the  Company  have  been
maintained  in accordance  with good  business  practice and are in all material
respects  in  accordance  with all  laws,  regulations  and  other  requirements
applicable to its business and operations.

         SECTION 2.9       Absence of Certain Changes, Events and Conditions.

                  (a)  Except as set forth on Section  2.9(a) of the  Disclosure
Schedule,  since the Balance Sheet Date, there has not been any material adverse
change  in  the  condition  (financial  or  otherwise)  of the  business  or the
liabilities,  assets, operations, results of operations, prospects or conditions
(financial or other) of the Company or its Subsidiaries.

                  (b)  Except as set forth on Section  2.9(b) of the  Disclosure
Schedule,  since the Balance Sheet Date, the Company and the  Subsidiaries  have
operated their respective businesses in the ordinary course consistent with past
practice  and the  Company  and the  Subsidiaries  have not  (other  than in the
ordinary course of business):

                           (i)  permitted  or  allowed  any of its  assets to be
         mortgaged, pledged or subjected to any Encumbrance;

                           (ii)  written  down,  or  failed  to  write  down (in
         accordance with generally accepted accounting principles,  consistently
         applied), or written up the value of any of its inventory or assets;

                           (iii) amended,  terminated,  cancelled or compromised
         any  claims  or  waived  any  other  rights,  or sold,  transferred  or
         otherwise disposed of any properties or assets, real, personal or mixed
         (including,  without  limitation,  leasehold  interests and  intangible
         property);

                           (iv)  disposed of or  permitted  to lapse any patent,
         trademark,   assumed  name,  service  mark,  trade  name  or  copyright
         application,  registration  or license to its business,  or under which
         the or the Subsidiaries has any right or license, or disclosed to





                                       -6-

<PAGE>



         any person any  trade secret or process of its business, or under which
         the Company or the Subsidiaries has any right or license;

                           (v) granted any general  increase in the compensation
         of the  employees  of the  Company  and  the  Subsidiaries  (including,
         without limitation,  any such increase pursuant to any Plan, as defined
         in Section  2.17),  or established or increased or promised to increase
         any benefits under any such Plan;

                           (vi)  made  any  material  changes  in the  customary
         methods of operation of its business,  including practices and policies
         relating to leasing, purchasing, marketing or selling;

                           (vii) declared, made, set aside or paid any dividends
         or other distributions  (whether in cash, securities or other property)
         to its  stockholders  with respect to the Stock, or redeemed any of its
         capital stock;

                           (viii)  incurred  or  assumed  any  indebtedness  for
         borrowed money or guaranteed any such indebtedness;

                           (ix) issued or sold any of its stock, notes, bonds or
         other securities (including treasury shares), or any option, warrant or
         other rights to purchase the same;

                           (x)  sustained  any  damage,   destruction  or  other
         casualty  loss  (whether or not  covered by  insurance)  affecting  the
         business or assets of the Company or the  Subsidiaries  which damage is
         in excess of $5,000.00;

                           (xi)  entered  into  any   transaction,   commitment,
         contract or agreement relating to its assets or business (including the
         acquisition or disposition of any assets) or the  relinquishment of any
         contract or other right;

                           (xii) (A) granted any severance or termination pay to
         any director,  officer or employee of the Company or the  Subsidiaries,
         (B) entered into any employment, deferred compensation or other similar
         agreement (or any amendment to any such  existing  agreement)  with any
         director,  officer or employee of the Company,  (C) increased  benefits
         payable  under any existing  severance or  termination  pay policies or
         employment  agreements  or (D) increased  compensation,  bonus or other
         benefits payable to directors, officers or employees of the Company;

                           (xiii) granted any option to purchase, or other right
         to  acquire,   capital  stock  or  any  security  or  other  instrument
         convertible  into  capital  stock of any  class of the  Company  or the
         Subsidiaries to any Person (defined below);






                                       -7-

<PAGE>



                           (xiv)  changed any method of accounting or accounting
         practice  (including in each case tax accounting),  except for any such
         change  required by reason of a concurrent  change in  accordance  with
         generally accepted  accounting  principles and notice of which has been
         given in writing to Purchaser;

                           (xv) entered into,  extended,  amended or terminated,
         any contract,  agreement,  lease,  franchise,  permit or license or any
         material  term  of  any  outstanding  security  of the  Company  or the
         Subsidiaries;

                           (xvi)  made  any  amendment  to  its  certificate  of
         incorporation or bylaws;

                           (xvii)  had  any  labor   dispute  or  pending  labor
         negotiation,  or any event that is expected to cause or to give rise to
         any such labor dispute or negotiation, or any activity or proceeding by
         a labor union or  representative  thereof to organize any  employees of
         the Company or the Subsidiaries, or any lockout, strike, slowdown, work
         stoppage or threat thereof by or with respect to such employees;

                           (xviii)   made   any   loan,   advance   or   capital
         contributions to or investment in any Person; and

                           (xix)  agreed,  whether in writing or  otherwise,  to
         take any of the actions specified in this Section 2.9(b).

                  As used in this  Agreement,  "Person" means an  individual,  a
corporation,  a  partnership,  an  association,  a trust or any other  entity or
organization,  including a government or political  subdivision or any agency or
instrumentality thereof.

         SECTION 2.10 Accounts  Receivable.  All accounts receivable existing on
the Closing Date will be valid  obligations of the respective makers thereof and
not subject to any offset or counterclaim.

         SECTION 2.11 Tangible Personal Property. Section 2.11 of the Disclosure
Schedule lists the machinery,  equipment,  tools,  parts,  supplies,  furniture,
fixtures,  personalty,  and other  tangible  personal  property  (the  "Tangible
Personal  Property")  used in the  Company's  or the  Subsidiaries's  respective
businesses.  The Tangible Personal  Property is in good operating  condition and
repair,  normal wear and tear  excepted.  Except as set forth in Section 2.11 of
the  Disclosure  Schedule,  the  Company  and the  Subsidiaries  have  good  and
indefeasible  title to and own the Tangible  Personal Property free and clear of
all  Encumbrances  or similar  rights of third  parties.  The Tangible  Personal
Property of the Company and the  Subsidiaries is being  maintained at normal and
customary levels adequate for the conduct of the business of the Company and the
Subsidiaries as currently conducted and includes all Tangible Personal





                                                      -8-

<PAGE>



Property and assets applicable to or used in connection with the business of the
Company and the Subsidiaries.

         SECTION 2.12 Inventory.  *the Company does not currently,  and will not
as of the Closing Date, own any inventory.

         SECTION 2.13 Intellectual  Property. (a) Section 2.13 of the Disclosure
Schedule lists any trademark,  service mark, registration thereof or application
for registration therefor, (domestic and foreign) trade name, invention, patent,
patent application,  trade secret, know-how, copyright,  copyright registration,
application for copyright registration, or any other similar type of proprietary
intellectual  property  (including without limitation any such right in computer
software) owned by the Company or the Subsidiaries or used in the conduct of the
Company's  or  the  Subsidiaries   respective  businesses   (collectively,   the
"Intellectual  Property").  Other  than  as set  forth  on  Section  2.13 of the
Disclosure  Schedule,  the  Company is the sole  owner of all such  Intellectual
Property and has the sole and exclusive  right to use same. The  consummation of
the transactions  contemplated  hereby will not alter or impair the Company's or
the  Subsidiaries'  rights  to  own  and  use  the  Intellectual  Property.  The
Intellectual  Property  is  sufficient  for the  conduct of the  business of the
Company and the Subsidiaries as currently conducted.

         SECTION 2.14 Real  Property.  Section 2.14 of the  Disclosure  Schedule
sets forth all of the real property in which the Company or any  Subsidiary  has
any  interest  except  for  the  interests  described  in  Section  2.15  of the
Disclosure  Schedule (the "Real Property").  Section 2.14 also sets forth all of
the  monetary  and  non-monetary  encumbrances,  restrictions,  and  obligations
encumbering  said Real  Property and true,  correct and complete  copies of same
have been made available to Purchaser prior to the date hereof.

         SECTION 2.15 Leases.

                  (a) Other than the Real Property,  neither the Company nor any
Subsidiary holds any interest in real property  (including,  but not limited to,
any  interest  as a fee owner or any  interest  as  lessor,  lessee,  sublessor,
sublessee,  assignor, assignee or guarantor or other surety) except as described
in Section 2.15(a) of the Disclosure Schedule (the "Leases"),  and such Schedule
specifies the name of the lessor, sublessor, lessee or sublessee thereunder, the
lease  term and the basic  annual  rental and other  items paid or payable  with
respect thereto.

                  (b) The Leases are valid, binding and enforceable  obligations
of the  parties  thereto,  except  that the  enforceability  of the  leases  and
subleases   may  be   limited   by  (i)   applicable   bankruptcy,   insolvency,
reorganization,   moratorium  and  similar  laws  affecting   creditors'  rights
generally and (ii)  equitable  principles  which may limit the  availability  of
certain equitable remedies (such as specific performance). Seller's interests in
the  Leases are  unencumbered  and free and clear of all liens and claims of any
kind. There is no development affecting any such

* Except as disclosed on Section 2.12 of the Disclosure Schedule



                                       -9-

<PAGE>



properties  pending which might  curtail in any material  respect the present or
future use of such  property for the purpose for which it is  currently  used by
the Company or any Subsidiary. Neither the Company nor, to the best knowledge of
any  Seller,  any  other  party to any such  Lease  has  breached  any  material
provision of, or is in default in any material  respect under, the terms of such
Lease nor does there  exist any event  which with notice or the lapse of time or
both would constitute a breach or cause a default in any respect under the terms
of any such Lease.  Except as  disclosed  in Section  2.15(b) of the  Disclosure
Schedule,  the  transactions  contemplated  by this Agreement do not require the
consent  of any  party  to any  of  the  Leases,  and  will  not  result  in the
termination of, any of the Leases.

                  (c) The copies of the Leases  heretofore made available by the
Company to Purchaser are true, correct and complete copies of such Leases.  Said
Leases have not been  modified or amended  since the  commencement  of the terms
specified  in the  respective  Leases,  except as  disclosed  in the copies made
available to Purchaser.

         SECTION 2.16 Contracts.

                  (a) Section 2.16 of the Disclosure Schedule is a true, correct
and complete list of all contracts,  agreements and  obligations  (collectively,
"Contracts")  to which the Company or any  Subsidiary is a party (other than the
Leases).

                  (b) The Company has delivered to Purchaser  true,  correct and
complete  copies  of  each  of the  Contracts.  Neither  the  Company,  nor  any
Subsidiary, is in default under, or in breach of, any of the terms or conditions
of the Contracts; (i) no condition exists or has occurred which, with the giving
of notice or the lapse of time, or both, would constitute a default or breach by
the Company of any of the terms or conditions of the Contracts; (ii) to Seller's
knowledge,  no counterparty to the Contracts is in default or breach thereunder;
(iii) all of the  Contracts  are  valid,  binding,  in full force and effect and
enforceable in accordance with their terms,  except that the  enforceability  of
such  Contracts  and  agreements  may be limited by (A)  applicable  bankruptcy,
insolvency,  reorganization,  moratorium and similar laws  affecting  creditors'
rights  generally and (B) equitable  principles which may limit the availability
of certain equitable remedies (such as specific  performance);  and (iv) neither
the  execution  and  delivery of this  Agreement,  nor the  consummation  of the
transactions  contemplated  hereby, nor compliance with the terms and provisions
hereof,  will  require the consent of any person  pursuant to, or will result in
the termination or impairment of, any such Contract.

         SECTION 2.17 Employment Benefit Matters.

         (a) For purposes of this Section 2.17 only,  the term  "Company"  shall
include the Company and all of its Subsidiaries.  Section 2.17 of the Disclosure
Schedule  sets  forth a list of each  "employee  benefit  plan" (as  defined  by
Section 3(3) of the Employee  Retirement Income Security Act of 1974, as amended
("ERISA")), and any other bonus, profit sharing, pension,





                                      -10-

<PAGE>



compensation,  deferred  compensation,  stock  option,  stock  purchase,  fringe
benefit,  severance,  post-retirement,   scholarship,  disability,  sick  leave,
vacation, individual employment, commission, bonus, payroll practice, retention,
or other plan,  agreement,  policy,  trust fund or arrangement  (each such plan,
agreement,  policy,  trust  fund or  arrangement  is  referred  to  herein as an
"Employee Benefit Plan", and collectively, the "Employee Benefit Plans") that is
currently in effect,  was  maintained  since December 31, 1975 or which has been
approved before the date hereof but is not yet effective, for the benefit of (i)
directors or employees of the Company or any other persons  performing  services
for the Company,  (ii) former directors or employees of the Company or any other
persons formerly  performing services for the Company, or (iii) beneficiaries of
anyone  described in (i) or (ii)  (collectively,  "Company  Employees")  or with
respect to which the Company or any "ERISA Affiliate" (hereby defined to include
any trade or  business,  whether or not  incorporated,  other than the  Company,
which has employees who are or have been at any date of determination  occurring
within the preceding six (6) years,  treated pursuant to Section  4001(a)(14) of
ERISA and/or  Section 414 of the Code as employees  of a single  employer  which
includes  the Company)  has or has had any  obligation  on behalf of any Company
Employee.  Except as disclosed on Section 2.17 of the Disclosure Schedule, there
are no other benefits to which any Company Employee is entitled or for which the
Company has any obligation.

         (b) Seller has  delivered to  Purchaser,  with respect to each Employee
Benefit  Plan,  true and  complete  copies of (i) the  documents  embodying  and
relating to the plan, including,  without limitation, the current plan documents
and documents  creating any trust maintained  pursuant thereto,  all amendments,
investment  management  agreements,   administrative  service  contracts,  group
annuity contracts,  insurance contracts,  collective bargaining agreements,  the
most recent summary plan description with each summary of material modification,
if any, and employee handbooks, (ii) annual reports including but not limited to
Forms  5500,  990 and 1041 for the last  three  (3)  years  for the plan and any
related trust,  (iii) actuarial  valuation reports and financial  statements for
the last three  years,  and (iv) each  communication  involving  the plan or any
related trust to or from the Internal  Revenue  Service  ("IRS"),  Department of
Labor  ("DOL"),  Pension  Benefit  Guaranty  Corporation  ("PBGC")  or any other
governmental   authority   including,   without  limitation,   the  most  recent
determination  letter  received from the IRS pertaining to any Employee  Benefit
Plan intended to qualify under Sections 401(a) or 501(c)(9) of the Code.

         (c) The Company has no obligation to contribute to or provide  benefits
pursuant  to,  and has no other  liability  of any kind with  respect  to, (i) a
"multiple employer welfare  arrangement" (within the meaning of Section 3(40) of
ERISA),  or (ii) a "plan  maintained  by more  than one  employer"  (within  the
meaning of Section 413(c) of the Code).

         (d) Except as  otherwise  set forth on Section  2.17 of the  Disclosure
Schedule,  the Company is not liable for, and neither the Company nor  Purchaser
will be liable for, any contribution, tax, lien, penalty, cost, interest, claim,
loss, action, suit, damage, cost assessment





                                      -11-

<PAGE>



or other similar type of liability or expense of any ERISA Affiliate  (including
predecessors  thereof)  with regard to any  Employee  Benefit  Plan  maintained,
sponsored or  contributed  to by an ERISA  Affiliate  (if a like  definition  of
Employee  Benefit Plan were applicable to the ERISA Affiliate in the same manner
as it  applies  to  the  Company),  including,  without  limitation,  withdrawal
liability  arising under Title IV,  Subtitle E, Part 1 of ERISA,  liabilities to
the PBGC, or liabilities  under Section 412 of the Code or Section  302(a)(2) of
ERISA.

         (e) The Company,  each ERISA Affiliate,  each Employee Benefit Plan and
each Employee Benefit Plan "sponsor" or  "administrator"  (within the meaning of
Section  3(16) of  ERISA)  has  complied  in all  respects  with the  applicable
requirements of Section 4980B of the Code and Section 601 et seq. of ERISA (such
statutory   provisions   and   predecessors   thereof  are  referred  to  herein
collectively as "COBRA"). Section 2.17 of the Disclosure Schedule lists the name
of each Company Employee who has experienced a "Qualifying Event" (as defined in
COBRA)  with   respect  to  an  Employee   Benefit  Plan  who  is  eligible  for
"Continuation  Coverage"  (as  defined  in COBRA) and whose  maximum  period for
Continuation  Coverage required by COBRA has not expired.  Included in such list
are the  current  address  for each such  individual,  the date and type of each
Qualifying  Event,  whether  the  individual  has already  elected  Continuation
Coverage and, for any individual who has not yet elected Continuation  Coverage,
the date on which such  individual  was  notified  of his or her rights to elect
Continuation Coverage. Schedule 2.17 attached hereto also lists the name of each
Business  Employee who is on a leave of absence  (whether or not pursuant to the
Family and Medical Leave Act of 1993,  as amended  ("FAMLA") and is receiving or
entitled to receive  health  coverage  under an Employee  Benefit Plan,  whether
pursuant to FAMLA, COBRA or otherwise.

         (f) With respect to each Employee  Benefit Plan and except as otherwise
set forth on Section 2.17 of the Disclosure Schedule:

                           (i) each Employee  Benefit Plan which is described in
         Section 3(2) of ERISA  qualifies  under Section  401(a) of the Code and
         has received a determination letter from the IRS to the effect that the
         Employee  Benefit Plan is qualified  under  Section 401 of the Code and
         that any trust  maintained  pursuant  thereto  is exempt  from  federal
         income taxation under Section 501 of the Code, and nothing has occurred
         or is  expected  to occur that  caused or could  cause the loss of such
         qualification  or  exemption  or the  imposition  of any penalty or tax
         liability;

                           (ii) all payments  required by the  Employee  Benefit
         Plan,  any  collective  bargaining  agreement or by law  (including all
         contributions,   insurance   premiums,   premiums   due  the   PBGC  or
         intercompany  charges)  with  respect to all  periods  through the date
         hereof have been made;

                           (iii)  there  are no  violations  of or  failures  to
         comply with ERISA and the Code with respect to the filing of applicable
         reports, documents, and notices regarding





                                      -12-

<PAGE>



         the Employee  Benefit Plan with the DOL, the IRS, the PBGC or any other
         governmental  authority,  or any of the assets of the Employee  Benefit
         Plan or any related trust;

                           (iv) no claim,  lawsuit,  arbitration or other action
         has been asserted or  instituted  or threatened in writing  against the
         Employee Benefit Plan, any trustee or fiduciaries  thereof, the Company
         or any ERISA Affiliate,  any director,  officer or employee thereof, or
         any of the assets of the Employee Benefit Plan or any related trust;

                           (v) all  amendments  required  to bring the  Employee
         Benefit Plan into conformity with  applicable law,  including,  without
         limitation, ERISA and the Code, have been timely adopted;

                           (vi)  any  bonding   required  with  respect  to  the
         Employee  Benefit Plan in accordance with the applicable  provisions of
         ERISA has been obtained and is in full force and effect;

                           (vii) the Employee Benefit Plan complies with and has
         been  maintained and operated in accordance  with its respective  terms
         and the terms and the provisions of applicable law, including,  without
         limitation,  ERISA  and  the  Code  (including  rules  and  regulations
         thereunder);

                           (viii)  no  "prohibited   transaction"   (within  the
         meaning  of  Section  4975 of the Code and  Section  406 of ERISA)  has
         occurred or is expected to occur with respect to the  Employee  Benefit
         Plan (and the  transactions  contemplated  by this  Agreement  will not
         constitute  or  directly  or  indirectly  result in such a  "prohibited
         transaction")  which has  subjected or could  subject the Company,  any
         ERISA  Affiliate or  Purchaser or any officer,  director or employee of
         the Company,  any ERISA  Affiliate,  Purchaser or the Employee  Benefit
         Plan trustee,  administrator or other fiduciary, to a tax or penalty on
         prohibited  transactions  imposed  by  either  Section  502 of ERISA or
         Section 4975 of the Code or any other liability with respect thereto;

                           (ix) the Employee  Benefit Plan is not under audit or
         investigation by the IRS or the DOL or any other governmental authority
         and no such completed  audit, if any, has resulted in the imposition of
         any tax, interest or penalty;

                           (x) if the Employee  Benefit Plan purports to provide
         benefits  which qualify for  tax-favored  treatment  under Sections 79,
         105, 106,  117,  120,  125,  127, 129 or 132 of the Code,  the Employee
         Benefit Plan satisfies the requirements of said Section(s);

                           (xi) the Employee  Benefit  Plan may be  unilaterally
         amended or terminated on no more than 90 days notice;





                                      -13-

<PAGE>




                           (xii) if the Employee  Benefit Plan  purports to be a
         voluntary employee  beneficiary  association  ("VEBA"), a request for a
         determination letter for the VEBA has been submitted to and approved by
         the IRS that the VEBA is exempt from federal  income tax under  Section
         501(c)(9) of the Code, and nothing has occurred or is expected to occur
         that caused or could cause the loss of such  qualification or exemption
         or the imposition of any tax, interest or penalty with respect thereto;

                           (xiii)  the  Employee   Benefit  Plan  has  not  been
         terminated under  circumstances  which would result in liability to the
         PBGC;

                           (xiv) no  "reportable  event"  (within the meaning of
         Section 4043 of ERISA) has occurred; and

                           (xv) if the Employee Benefit Plan is subject to Title
         IV of ERISA,  no proceeding  has been or is expected to be initiated to
         terminate the plan.

         (g) The Company is not subject to any liens,  and excise or other taxes
under ERISA,  the Code or other  applicable law relating to any Employee Benefit
Plan;  has not ceased  operations  at a facility so as to become  subject to the
provisions  of Section  4062(e) of ERISA;  has not  withdrawn  as a  substantial
employer so as to become subject to the provisions of Section 4063 of ERISA; and
has not ceased  making  contributions  to any  Employee  Benefit Plan subject to
4064(a) of ERISA to which the Company or any ERISA Affiliate made  contributions
at any time during the six (6) years prior to the date hereof.

         (h) With respect to each Employee  Benefit Plan that is subject to Part
3 of Title I of ERISA,  Title IV of ERISA and/or  Section 412 of the Code but is
not a "Multiemployer Plan" (as defined in Section 4001(a)(3) of ERISA or Section
414(f) of the Code) (a "DB Plan"):

                           (i) the  present  value of all  vested  and  unvested
         "benefit  liabilities"  (as  defined in Section  4001(a)(16)  of ERISA)
         determined (A) based on actuarial assumptions used for funding purposes
         as set forth in the most recent  actuarial  report;  (B) as required by
         the  PBGC if the DB Plan  were  terminated;  and  (C) as set  forth  in
         Financial  Accounting Standards Board SFAS No. 87 using the methodology
         to calculate the DB Plan's accrued  benefit  obligation,  do not exceed
         the current fair market value of the assets of the DB Plan;

                           (ii)  except  as set  forth  on  Section  2.17 of the
         Disclosure  Schedule,  no amendments or other  modifications to such DB
         Plan or its actuarial  assumptions  have been adopted since the date of
         such DB Plan's most recent actuarial report;






                                      -14-

<PAGE>



                           (iii) no "accumulated funding deficiency" (as defined
         in Section 302 of ERISA or Section  412 of the Code) has been  incurred
         with  respect to the DB Plan,  whether or not  waived,  and the DB Plan
         complies with all funding requirements of the Code and ERISA; and

                           (iv) no  excise  or other  taxes,  interest  or other
         charges have been  incurred or are due and owing with respect to the DB
         Plan  because  of any  failure  to  comply  with  the  minimum  funding
         standards of ERISA and the Code.

                  (i) In the  case  of  any  Employee  Benefit  Plan  that  is a
Multiemployer  Plan,  the Company has no  withdrawal  liability  under Part 1 of
Subtitle  E of Title IV of ERISA as a result of either a  "complete  withdrawal"
(as defined in Section 4203 of ERISA) or a "partial  withdrawal"  (as defined in
Section 4205 of ERISA) by the Company from such Employee  Benefit Plan occurring
on or prior to the date hereof.

                  (j) The consummation of the transactions  contemplated by this
Agreement  will  not  give  rise to any  liability  for any  employee  benefits,
including,  without  limitation,   liability  for  severance  pay,  unemployment
compensation, termination pay or withdrawal liability, or accelerate the time of
payment or vesting or increase the amount of compensation or benefits due to any
Company Employee.

                  (k) No amounts  payable  under any Employee  Benefit Plan will
fail to be deductible  for federal income tax purposes by virtue of Section 280G
of the Code;

                  (l)  Except as set  forth on  Section  2.17 of the  Disclosure
Schedule,  no Employee  Benefit Plan in any way provides for any benefits of any
kind whatsoever  (other than under COBRA, the Federal Social Security Act or any
Employee Benefit Plan qualified under Section 401(a) of the Code) to any Company
Employee who, at the time the benefit is to be provided, is a former director or
employee of, or other provider of services to, the Company or an ERISA Affiliate
(or a beneficiary of any such person),  or any other Company Employee,  nor have
any representations,  agreements,  covenants or commitments been made to provide
such benefits.

                  (m) Since December 31, 1996, through the date hereof,  neither
the Company nor any ERISA  Affiliate has, nor will it, (i) institute or agree to
institute any new employee benefit plan or practice,  (ii) make or agree to make
any  change  in any  Employee  Benefit  Plan,  (iii)  make or  agree to make any
increase in the compensation  payable or to become payable by the Company or any
ERISA  Affiliate  to any  Company  Employee,  or (iv)  except  pursuant  to this
Agreement and except for contributions  required to provide benefits pursuant to
the provisions of the Employee  Benefit Plans,  pay or accrue or agree to pay or
accrue any bonus,  percentage of compensation,  or other like benefit to, or for
the credit of, any Company Employee.






                                      -15-

<PAGE>



                  (n) Any contribution,  insurance premium, excise tax, interest
charge or other  liability  or charge  imposed or required  with  respect to any
Employee  Benefit Plan which is attributable to any period or any portion of any
period prior to the Closing  shall be reflected as a liability on the  Company's
Balance Sheet as of the Closing,  including,  without limitation (i) any portion
of the matching  contribution required with respect to the Company's 401(k) Plan
for the plan year ending  after the Closing  which is  attributable  to elective
contributions  made by  participants  in such  plan  prior  to the  Closing  and
assuming that all participants are employed by the Company as of the end of such
plan  year,  and (ii) an amount  equal to a pro rata  portion  of the  quarterly
contribution  requirement with respect to any DB Plan for the quarter  beginning
immediately  prior to the  Closing,  based on the  number of days that will have
elapsed from such date through the Closing.

         SECTION 2.18 Labor Matters.  Except as set forth on Section 2.18 of the
Disclosure  Schedule,  neither the Company,  nor any of its  Subsidiaries,  is a
party to any  collective  bargaining  agreement  or other labor  union  contract
applicable to persons  employed by the Company or any of its  Subsidiaries;  (a)
there are no unfair labor practice  complaints  (or any basis  therefor  pending
against  the  Company  or any of its  Subsidiaries  before  the  National  Labor
Relations  Board or any  other  Governmental  Authority;  (b) to  Seller's  best
knowledge, there have been no efforts by any union, or local thereof, to seek to
represent, at any location where they do not currently represent such employees,
and employees of the Company or any of its Subsidiaries; and (c) there have been
no strikes, slowdowns, work stoppages,  lockouts, or threats thereof, by or with
respect to any  employees  of the  Company or any of its  Subsidiaries;  and (d)
without having made any  investigation or inquiry,  Seller has no knowledge that
any  party  with  whom the  Company  or any of its  Subsidiaries  has  entered a
Contract is involved in or  threatened  with or affected by any labor dispute or
other proceeding or order.

         SECTION 2.19 Taxes.

                  (a)     The following terms shall have the following meanings:

                  "Net  Unrealized  Built-in  Loss"  means  any "net  unrealized
built-in loss" as that term is defined in Section 382(h)(3)(A) of the Code.

                  "Post-Closing  Tax Period"  means any Tax period  ending after
the Closing Date,  excluding  the portion,  if any, of such Tax period up to and
including the Closing Date.

                  "Pre-Closing  Tax  Period"  means any Tax period  ending on or
before the Closing Date. Additionally,  if a Tax period ending after the Closing
Date contains any days which fall prior to or on the Closing  Date,  any portion
of the Tax period up to and including the Closing Date shall also be included in
the Pre-Closing Tax Period.






                                      -16-

<PAGE>



                  "Tax" (and, with correlative  meaning,  "Taxes" and "Taxable")
means (i) any net income, alternative or add-on minimum tax, gross income, gross
receipts,  sales, use, ad valorem,  value added, transfer,  franchise,  profits,
license,  withholding  on amounts  paid to or by the Company or any  Subsidiary,
payroll,  employment,  excise, severance, stamp, occupation,  premium, property,
environmental  or windfall profit tax, custom,  duty or other tax,  governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or any penalty,  addition to tax or  additional  amount  imposed by any
governmental authority (a "Taxing Authority")  responsible for the imposition of
any such tax  (domestic  or foreign),  (ii) any  liability of the Company or any
Subsidiary  for the  payment of any  amounts of the type  described  in (i) as a
result of being a member of an  affiliated,  consolidated,  combined  or unitary
group for any period and (iii) any  liability  of the Company or any  Subsidiary
for the payment of any amounts of the type  described  in (i) as a result of any
express or implied  obligation  to indemnify or pay the Tax  obligations  of any
other person.

                  "Tax Asset" means any net  operating  loss,  net capital loss,
investment  tax credit,  foreign tax credit,  charitable  deduction or any other
credit or tax  attribute  of the Company or any  Subsidiary  which could  reduce
Taxes  (including   without   limitation   deductions  and  credits  related  to
alternative  minimum Taxes, and Net Unrealized Built-in Losses existing prior to
the Closing Date).

                  (b) Except as set forth in Section  2.19(b) of the  Disclosure
Schedule,  (i)  all  Tax  returns,  statements,  reports  and  forms  (including
estimated tax returns and reports and information  returns and reports) required
to be filed on or before the Closing Date with any Taxing Authority with respect
to any Pre-Closing Tax Period by or on behalf of the Company,  or any Subsidiary
or Seller (collectively,  the "Returns"),  have been, or will be, filed when due
in accordance with all applicable laws, except that any such return,  statement,
report or form that has been extended until after the Closing Date in accordance
with  applicable law will be completed and a copy provided to Purchaser no later
than ten (10) days prior to the Closing Date; (ii) as of the time of filing, the
Returns  correctly  reflected  (and,  as to any Returns not filed as of the date
hereof,  will  correctly  reflect)  the facts  regarding  the income,  business,
assets, operations, activities and status of the Company and any Subsidiary, and
any other  information  required to be shown therein;  (iii) the Company and its
Subsidiaries  have timely paid or withheld all Taxes shown as due and payable on
the Returns that have been filed;  (iv) the  charges,  accruals and reserves for
Taxes with respect to the Company and its  Subsidiaries  for any Pre-Closing Tax
Period  (including any  Pre-Closing  Tax Period for which no Return has yet been
filed)  reflected  or to be  reflected  on  the  books  of  the  Company  or any
Subsidiary  (excluding any provision for deferred  income taxes) are adequate to
cover such Taxes;  (v) all federal,  state,  local and foreign tax returns filed
with  respect to Taxable  years of the  Company and any  Subsidiary  through the
Taxable year fiscal year 1992 have been  examined and closed or are returns with
respect to which the applicable  period for  assessment  under  applicable  law,
after giving  effect to  extensions  or waivers,  has expired;  (vi) neither the
Company nor any  Subsidiary is delinquent in the payment of any Tax or requested
any extension of time within





                                      -17-

<PAGE>



which to file or send any Return, which Return has not since been filed or sent;
(vii) neither the Company nor any Subsidiary has granted any extension or waiver
of the limitation period  applicable to any Returns,  which period (after giving
effect to such  extension  or waiver) has not yet  expired;  (viii)  there is no
claim,  audit,  action,  suit,  proceeding,  or  investigation  now  pending  or
threatened  against or with respect to the Company or any  Subsidiary in respect
of any Tax; (ix) there are no requests for rulings or  determinations in respect
of any Tax  pending  between  the  Company  or any  Subsidiary  and  any  Taxing
Authority;  (x) neither the Company nor any  Subsidiary has any interest in real
property  in any  jurisdiction  in which a Tax is imposed on the  transfer of an
interest  in real  property;  (xi)  none of the  property  owned  or used by the
Company or any Subsidiary is subject to a tax benefit transfer lease executed in
accordance  with  Section  168(f)(8) of the  Internal  Revenue Code of 1954,  as
amended by the  Economic  Recovery  Tax Act of 1981;  (xii) none of the property
owned or used by the Company or any Subsidiary is subject to a lease, other than
a "true"  lease for federal  income tax  purposes;  (xiii) none of the  property
owned by the Company or any Subsidiary is "tax-exempt  use property"  within the
meaning  of  Section  168(h) of the  Code;  (xiv)  neither  the  Company  or any
Subsidiary  nor any other  Person on behalf of the  Company any  Subsidiary  has
entered  into or will enter into any  agreement  or consent  pursuant to Section
341(f) of the Code; (xv) there are no liens for Taxes upon the assets or capital
stock of the Company any Subsidiary  except liens for current Taxes not yet due;
(xvi) Seller is not subject to withholding  under (A) Sections 1441,  1442, 1445
nor  under  any  other  section  of the Code  with  respect  to any  transaction
contemplated  hereby  or (B) the  laws,  rules,  regulations  or  administration
procedures of a Government Taxing Authority;  (xvii) neither the Company nor any
Subsidiary  will be required to include any adjustment in taxable income for any
Post-Closing Tax Period under Section 481(c) of the Code as a result of a change
in method of accounting  for a  Pre-Closing  Tax Period  effective  prior to the
Closing Date or pursuant to the  provisions of any  agreement  entered into with
any  Taxing  Authority  on or before  the  Closing  Date with  regard to the Tax
liability of the Company for any  Pre-Closing  Tax Period;  (xviii)  neither the
Company nor any Subsidiary  has been a member of an affiliated  group other than
one of  which  the  Company  any  Subsidiary  was the  parent,  or filed or been
included in a combined,  consolidated  or unitary Return other than one filed by
the Company any  Subsidiary;  (xix)  neither the Company nor any  Subsidiary  is
currently  under any  contractual  obligation to pay the Tax  obligations of any
other  Person,  or to pay the  Tax  obligations  with  respect  to  transactions
relating to any other  Person,  or to indemnify any other Person with respect to
any Tax; and (xx) all information set forth in the Interim Audited Statements of
the Company and the Subsidiaries relating to Tax matters is, and shall be, true,
complete and accurate; (xxi) any changes in the method of accounting used by the
Company any Subsidiary for any Tax items made during the  Pre-Closing Tax Period
have been approved by the Internal  Revenue  Service in accordance  with Section
446(e) of the Code;  (xxii) neither the Company nor any  Subsidiary  will have a
Net Unrealized Built-in Loss.

                  (c) Section  2.19(c) of the  Disclosure  Schedule sets forth a
list of states,  territories and jurisdictions  (whether foreign or domestic) to
which any Tax is properly payable by the Company any Subsidiary.





                                      -18-

<PAGE>




                  (d) Without the prior written  consent of  Purchaser,  neither
the  Company nor any  Subsidiary  shall make or change any  election,  change an
annual tax accounting period,  adopt or change any tax accounting  method,  file
any amended Return,  enter into any closing  agreement,  settle any Tax claim or
assessment,  surrender  any  right to claim a refund of  Taxes,  consent  to any
extension  or waiver of the  limitation  period  applicable  to any Tax claim or
assessment,  take  any  other  action  or omit to take any  action,  if any such
election, adoption, change, amendment, agreement, settlement, surrender, consent
or other action or omission may have the effect of increasing  the Tax liability
or  reducing  any Tax Asset of the  Company  any  Subsidiary,  Purchaser  or any
affiliate of Purchaser.

                  (e) Prior to the date  hereof,  Seller has caused the  Company
and its  Subsidiaries  to deliver to Purchaser  copies of the federal income tax
returns filed by the Company and its  Subsidiaries for all Tax periods for which
the applicable statute of limitations has not expired.

         SECTION  2.20  Litigation.  Except as set forth in Section  2.20 of the
Disclosure  Schedule,  there are no pending  (or the best  knowledge  of Seller,
threatened),  claims, disputes, actions, suits, arbitrations,  inquiries, audit,
proceedings or investigations (or any basis therefor) by or against the Company,
any Subsidiary,  or any of their respective  assets,  properties,  officers,  or
directors.

         SECTION 2.21 Licenses. The Company and the Subsidiaries are now, and at
the Closing  will be, the holder of all  licenses,  authorizations,  permits and
certificates (the "Licenses") required by any Governmental  Authority to conduct
their respective businesses, and all of the Licenses are now, and at the Closing
will be, in full force and effect.

         SECTION 2.22  Compliance with Laws. The Company has received no written
notice that (and to the best of Seller's knowledge,  Seller is unaware that) the
Company, or any Subsidiary,  is in violation of, or has violated, any applicable
Federal,  state,  local,  foreign or other law, regulation or order or any other
requirement  of  any  governmental,   regulatory  or  administrative  agency  or
authority  or  court or other  tribunal  relating  to it;  and the  Company  has
received no written  notice that the  Company or any  Subsidiary  is now charged
with, and to the best knowledge of Seller,  or is now under  investigation  with
respect to, any possible violation of any applicable law,  regulation,  order or
requirement  relating to any of the foregoing in connection with the business of
the Company, or any Subsidiary,  and the Company and the Subsidiaries have filed
all  reports  required  to  be  filed  with  any  governmental,   regulatory  or
administrative agency or authority on or before the date hereof.

         SECTION  2.23  Insurance.  Section  2.23  of  the  Disclosure  Schedule
contains a list and  description of all policies of insurance and fidelity bonds
relating to the assets of the  Company , the  Subsidiaries,  or the  business or
employees  of the  Company,  or any  Subsidiary  (except  for any such  policies
maintained to provide benefits to employees under a benefit plan





                                      -19-

<PAGE>



or  arrangement  described in Section  2.23  hereof),  together  with the annual
premiums payable with respect therefor,  presently maintained by the Company and
the Subsidiaries,  all of which are, and will be maintained  through the Closing
Date, in full force and effect. All premiums thereon have been paid, and neither
the Company,  nor any Subsidiary,  has received any notice of cancellation  with
respect thereto. There are no claims pending under any of said policies or bonds
or disputes with underwriters.  The Company and the Subsidiaries have used their
respective  best efforts to estimate and calculate  incurred,  but not reported,
claims  relating to such policies and bonds,  and any potential  liabilities  in
respect thereof have been recorded on the Interim Audited Statements and will be
recorded in the Collected  Interim  Information.  The methods used to derive the
amount  of  any  such  liabilities  to be  recorded  in  the  Collected  Interim
Information  shall be  consistent  with past  practices  of the  Company and the
Subsidiaries.  There are no pending or  threatened  terminations  of, or premium
increases  with  respect to, any of such  policies and bonds and the Company and
the Subsidiaries are in compliance with all conditions contained therein. Seller
has no reason to  believe  that the  insurance  carried by the  Company  and the
Subsidiaries  is not, or since the date of its inception,  has not been adequate
with respect to risks normally insured against by comparable companies similarly
situated.  The Company and the  Subsidiaries  have delivered true,  complete and
correct  copies  of  all  insurance   policies  insuring  the  Company  and  the
Subsidiaries.

         SECTION 2.24 Bank  Accounts.  Section 2.24 of the  Disclosure  Schedule
lists all of the (a) names of each bank,  savings and loan,  or other  financial
institution in which the Company the Subsidiaries has an account, including cash
contribution  accounts,  and  the  account  numbers  and  names  of all  persons
authorized  to draw  thereon  or  have  access  thereto,  (b)  locations  of all
lockboxes  and safe deposit  boxes of the Company and the  Subsidiaries  and the
names of all persons authorized to draw thereon or have access thereto.

         SECTION  2.25  Brokers.  No  broker,  finder  or  investment  banker is
entitled to any  brokerage,  finder's or other fee or  commission  in connection
with the transactions contemplated under this Agreement.

         SECTION 2.26 Governmental  Authorization.  The execution,  delivery and
performance by the Seller of this Agreement  requires no action by or in respect
of, or filing with, any governmental body agency, official or authority.

         SECTION  2.27  Amounts  Owing.  On or prior to the  Closing  Date,  the
Company and the Subsidiaries will have collected any amounts loaned, or advanced
to, or receivable from its directors, officers, Seller or consultants.

         SECTION  2.28  Employees.  Listed  in  Section  2.28 of the  Disclosure
Schedule are all of the Company's  and the  Subsidiaries'  directors,  officers,
employees and any and all compensation, pension or benefit arrangements, whether
written or oral,  between the Company,  and the Subsidiaries and said directors,
officers and employees.





                                      -20-

<PAGE>




         SECTION 2.29 No  Undisclosed  Liabilities.  There are no liabilities of
the  Company,  or any  Subsidiary,  required to be recorded of  disclosed  under
generally accepted accounting principles, whether accrued, contingent, absolute,
determined,  determinable  or  otherwise,  and there is no  existing  condition,
situation or set of  circumstances  which could reasonably be expected to result
in any such liability,  other than liabilities under this Agreement or reflected
in any schedule or document delivered in connection with this Agreement.

         SECTION 2.30 Certain Interests.  Except as set forth in Section 2.30 of
the Disclosure Schedule,  no officer,  director,  or shareholder of the Company,
any Subsidiary,  nor any relative of any such officer,  director or shareholder,
nor any  enterprise,  firm,  partnership,  association,  corporation or trust of
which  any such  officer,  director,  shareholder  or  relative  is an  officer,
trustee, director, partner, employee, agent, stockholder,  owner or beneficiary,
is a party to or has an  interest  with  respect to any  Contract or Lease which
relates to or affects the business of the Company, or any Subsidiary, or has any
interest in any property, real or personal,  tangible or intangible,  used in or
pertaining to the business of the Company, any Subsidiary.  For purposes of this
Section  2.30,  a  relative  of any  person  means any  person who is related by
consanguinity,  marriage or adoption to such first person as a second  cousin or
closer relative or is a spouse of any such relative.

         SECTION 2.31 Powers of Attorney.  Neither the Company,  any Subsidiary,
nor the Seller have any outstanding powers of attorney or comparable delegations
of  authority  in  connection  with the  Company,  or any  Subsidiary,  or their
respective business or assets.

         SECTION 2.32 Other Information.  No document or item referred to in any
schedule  (including,  without limitation,  the Disclosure  Schedule) or exhibit
hereto  contains,  and no information  set forth in any such schedule,  exhibit,
document or item contains,  any untrue  statement of a material fact or omits to
state a material fact  necessary in order to make the statements of the Company,
any Subsidiary, and/or Seller contained therein not misleading.

         SECTION 2.33 Environmental  Compliance.  Except as disclosed in Section
2.33 of the  Disclosure  Schedule  to  Seller's  knowledge  (and the Company has
received no written notice which indicates otherwise):

                  (a) No notice, notification,  demand, request for information,
citation,  summons,  complaint or order has been issued or filed, no penalty has
been  assessed  and no  investigation  or  review  is  pending,  or to the  best
knowledge of Seller,  threatened by any  governmental or other entity,  (i) with
respect to any alleged  violation of any law,  ordinance,  rule,  regulation  or
order of any governmental  entity in connection with the conduct of the business
of the Company,  or any  Subsidiary,  and relating to a Hazardous  Substance (as
hereinafter  defined) or (ii) with  respect to any  alleged  failure to have any
permit, certificate,  license, approval,  registration or authorization required
in connection  with the conduct of the business of the Company,  any Subsidiary,
relating to a Hazardous Substance of (iii) with respect





                                      -21-

<PAGE>



to any generation,  treatment, storage, recycling,  transportation,  disposal or
release (including a release as defined in 42 USC 9601) ("Hazardous Release") of
any  toxic  or  otherwise  hazardous   substance,   including   petroleum,   its
derivatives,  by-products  and other  hydrocarbons,  as defined in or  regulated
under applicable  Federal,  state or local environmental  statutes,  ordinances,
rules, regulations or orders ("Hazardous Substance") used in connection with the
business or assets of the Company, or any Subsidiary.

                  (b)(i) Neither the Company,  nor any  Subsidiary,  has handled
any Hazardous  Substance,  on any property now or previously  owned or leased by
the Company,  or any  Subsidiary  (the  "Properties");  (ii) no  polychlorinated
biphenyls  ("PCBs") or urea formaldehyde was or has become present at any of the
Properties as a result of any activity which is or was,  directly or indirectly,
within  the  control  of the  Company,  or any  Subsidiary,  and no PCBs or urea
formaldehyde  is or has been present at any of the Properties  that Seller knows
of or of which they  could  reasonably  be  expected  to know;  (iii) no friable
asbestos was or has become  present at any of the  Properties as a result of any
activity  which is or was,  directly  or  indirectly,  within the control of the
Company, or any Subsidiary and no friable asbestos is or has been present at any
such property  that Seller knows of or of which it could  reasonably be expected
to know; (iv) no underground storage tank ("UST"), which has or had been used to
store or has or had contained a Hazardous  Substance,  was or has become present
at any of the Properties as a result of any activity  which is or was,  directly
or indirectly,  within the control of the Company, any Subsidiary,  and there is
no such UST currently in use or abandoned,  at any of the Properties that Seller
knows of or of which it could  reasonably  be expected to know of; (v) there has
been no Hazardous  Release of a Hazardous  Substance  at, on or under any of the
Properties that Seller knows of or of which they could reasonably be expected to
know;  and (vi) no Hazardous  Substance is present in a reportable  or threshold
planning  quantity,  where  such a quantity  has been  established  by  statute,
ordinance, rule, regulation or order, at, on or under any of the Properties as a
result of any  activity  which is or was,  directly  or  indirectly,  within the
control of the Company,  or any Subsidiary  and no such  Hazardous  Substance in
such  quantity was or has become  present at any of the  Properties  that Seller
knows of or of which they could reasonably be expected to know of.

                  (c) Neither the Company,  nor any Subsidiary,  has transported
or arranged for the  transportation  (directly or  indirectly)  of any Hazardous
Substance  to any  location  which is  listed or  proposed  for  listing  on the
National  Priorities  List  under  the  Comprehensive   Environmental  Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the Comprehensive
Environmental   Response,   Compensation   and  Liability   Information   System
("CERCLIS")  or on any similar  state list or, to the best  knowledge of Seller,
which is the subject of any federal,  state or local enforcement action or other
investigation  which may lead to  claims  for  clean-up  costs,  remedial  work,
damages to natural resources or for personal injury claims,  including,  but not
limited to, claims under CERCLA.






                                      -22-

<PAGE>



                  (d) No oral or written  notification of a Hazardous Release of
a Hazardous  Substance  has been filed by or, on behalf of, the Company,  or any
Subsidiary,  and, to the best  knowledge of Seller,  none of the  Properties is,
based on any act or omission  directly or  indirectly  within the control of the
Company,  or any  Subsidiary,  during  the period of  ownership  or lease by the
Company,  or any  Subsidiary,  listed or proposed  for  listing on the  National
Priorities  List  promulgated  pursuant to CERCLA,  on CERCLIS or on any similar
state list of sites requiring investigation or clean-up.

                  (e) There are no environmental Encumbrances on any asset owned
or leased by the Company,  or any  Subsidiary,  no government  actions have been
taken for, to the best knowledge of Seller is in process which could subject any
of such assets to such Encumbrances and no notice or restriction relating to the
presence of a Hazardous  Substance  is required to be placed in any deed to such
of said assets title to which would be conveyed by use of a deed.

                  (f) There have been no environmental investigations,  studies,
audits,  tests,  reviews  or other  analyses  conducted  by or which  are in the
possession  of  the  Company,  or  any  Subsidiary,  in  relation  to any of the
Properties.

                  (g)  Section  2.33(g) of the  Disclosure  Schedule  is a true,
accurate and complete list of all environmental  reports prepared for any of the
Properties (i) at the request of Seller, the Company, or any Subsidiary, or (ii)
to the best knowledge of Seller, at the request of any other person.

         SECTION 2.34 No Options or Contracts.  There are no outstanding options
to purchase the Stock, the Company, or any of its assets.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                                OF THE PURCHASER

         As an  inducement  to Seller to enter  into this  Agreement,  Purchaser
represents  and warrants to Seller (which  representations  and  warranties  are
material to and relied upon by Seller) as follows:

         SECTION 3.1  Incorporation  and Authority of Purchaser.  Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all necessary  corporate power and authority to
enter  into  this  Agreement,  to carry  out its  obligations  hereunder  and to
consummate the transactions  contemplated  hereby.  This Agreement has been duly
executed and delivered by Purchaser, and (assuming due authorization,  execution
and delivery by Seller and the Company) constitutes a legal, valid and





                                      -23-

<PAGE>



binding obligation of the Purchaser, enforceable against Purchaser in accordance
with its terms,  subject  to the  effect,  if any,  of  bankruptcy,  insolvency,
reorganization,  moratorium  and other  similar  laws  affecting  the  rights of
creditors generally and the effect, if any, of general principles of equity.

         SECTION 3.2 No Conflicts.  The execution,  delivery and  performance of
this  Agreement by Purchaser  does not and will not (i) violate or conflict with
the certificate of incorporation or bylaws or other organizational  documents of
Purchaser;  (ii) conflict with or violate any law, rule or regulation of, or any
order, writ, judgment, injunction,  decree, stipulation,  determination or award
entered by or with, any Governmental Authority applicable to Purchaser; or (iii)
conflict with,  result in any breach of,  constitute a default (or constitute an
event which with the giving of notice or lapse of time, or both, would become or
result in a conflict,  breach or default) under,  any agreement or obligation to
which Purchaser is a party or subject and which would affect Purchaser's ability
or authority to consummate the transactions contemplated hereby.

         SECTION 3.3 Investment Purpose. Purchaser is acquiring the Stock solely
for the  purpose of  investment  and not with a view to, or for offer of sale in
connection with, any distribution thereof. Purchaser acknowledges that the Stock
has not been registered.

         SECTION 3.4 Brokers. No broker, finder or investment banker is entitled
to any  brokerage,  finder's or other fee or commission  in connection  with the
transaction  contemplated hereby based upon arrangements made by or on behalf of
the Purchaser.

         SECTION  3.5  Issuance  of Shares.  When  issued by  Purchaser  to each
Seller,  the Shares will have been duly  authorized,  validly issued,  and fully
paid and non-assessable


                                   ARTICLE IV

                              ADDITIONAL COVENANTS

         SECTION  4.1 Conduct of Business  Prior to the  Closing.  From the date
hereof  through the Closing Date,  Seller  hereby  covenants and agrees that the
Company and the Subsidiaries  shall conduct their  respective  businesses in the
ordinary  course  consistent with past practice and shall use their best efforts
to preserve intact their business  organizations  and  relationships  with third
parties  and to  keep  available  the  services  of  its  present  officers  and
employees.  Without  limiting the  generality  of the  foregoing,  from the date
hereof until the Closing Date, the Company,  the  Subsidiaries,  and Seller will
not without the prior written  consent of Purchaser,  such consent to be granted
or withheld in Purchaser's sole, absolute and unreviewable discretion, (i) issue
any shares of the stock,  warrants,  options, or stock equivalents or declare or
make any payment on account of the purchase, redemption, retirement or





                                      -24-

<PAGE>



acquisition  or any shares of the Company or any  Subsidiary,  (ii)  declare any
dividends or make any distributions to Seller except a one-time  distribution to
Seller of the Company's undistributed taxable income, (iii) take any action that
would have a Material  Adverse Effect on the Company,  or any  Subsidiary,  (iv)
incur any  indebtedness  from  borrowed  money,  (v)  subject  the assets of the
Company,  any Subsidiary,  to any additional liens or encumbrances or mortgages,
(vi) adopt or propose any change in its articles of  incorporation  or bylaws of
the Company,  any Subsidiary,  (vii) merge or consolidate with any other Person,
acquire a material  amount of assets of any other  Person,  (viii) sell,  lease,
license or otherwise  dispose of any assets or property of the  Company,  or any
Subsidiary  which have been  disclosed  to  Purchaser,  (ix) enter into or renew
(whether by exercise of option or  otherwise)  or amend in any material  respect
any Contract or any Lease  without the prior written  consent of Purchaser,  (x)
take or agree or commit to take any action that would make any representation or
warranty of the Company, any Subsidiary, or Seller inaccurate in any respect at,
or as of any time prior to, the Closing  Date or omit or agree or commit to omit
to take any action necessary to prevent any such representation or warranty from
being  inaccurate in any respect at any such time;  (xi) permit the Company,  or
any Subsidiary, to agree or commit to do any of the foregoing.

         SECTION 4.2 Access to Information. Subject to the terms of that certain
Confidentiality  Agreement,  dated  February 6, 1997, by and between the Company
and Purchaser,  from the date hereof through the Closing Date,  Seller agrees to
(a) permit Purchaser, and its employees and representatives reasonable access to
any  and  all of the  office  and  properties  records  of the  Company,  or any
Subsidiary  (including  work  papers of  auditors  in respect  of the  Financial
Statements and the Interim  Statements,  and work papers  relating to the period
commencing on January 1, 1997 and ending on the Closing Date) for the purpose of
Purchaser conducting a complete and thorough investigation,  analysis and review
of the  Company,  and any  Subsidiary,  (b) furnish to  Purchaser,  its counsel,
financial advisors, auditors and other authorized representatives such financial
and  operating  data and  other  information  relating  to the  Company,  or any
Subsidiary  as  such  Persons  may  reasonably  request  and  (c)  instruct  the
employees,  counsel and  financial  and other  advisors of the Company,  and any
Subsidiary, to cooperate with Purchaser in its investigation of the Company, and
any  Subsidiary;  provided,  however,  that no  investigation  pursuant  to this
Section shall limit or otherwise affect any  representation or warranty given by
Seller  hereunder.  In  the  event  that  Purchaser,  in  its  sole  discretion,
determines  that the  Company  is,  for any reason  whatsoever,  unsatisfactory,
Purchaser shall have until end of business on the forty-fifth (45) day after the
delivery of the  Disclosure  Schedule to notify Seller in writing that Purchaser
has elected to terminate  this Agreement in which event neither party shall have
any further liability to the other.

         SECTION 4.3  Confidentiality.  Prior to the Closing  Date,  no party to
this Agreement  shall disclose the existence of, or the terms of this Agreement,
or any  document  executed  in  connection  with the  transactions  contemplated
herein, except upon the mutual agreement of the parties hereto.





                                      -25-

<PAGE>




         SECTION 4.4 COBRA Compliance. Within fifteen (15) days of the execution
of this Agreement, Seller will cause the Company to provide Purchaser with three
(3) years of claims  history  for purpose of  calculating  the  projected  COBRA
liability.  Such projected  liability shall be offset against the Purchase Price
at the Closing. Following the Closing, Purchaser will comply with all applicable
requirements of Section 4980B of the Code and Section 601 et. seq.
of ERISA.

         SECTION 4.5 Unaudited  Monthly  Statements.  For each full fiscal month
commencing with January 1, 1997 until the Closing Date, the Company will prepare
and  deliver to  Purchaser,  as promptly  as  practicable  after the end of such
fiscal month, a consolidated,  unaudited balance sheet and unaudited  statements
of income and  retained  earnings  for the Company,  and the  Subsidiaries  (the
"Unaudited   Monthly   Statements",   and  together  with  the  Interim  Audited
Statements,   the  "Collected  Interim  Information").   The  Collected  Interim
Information  will be prepared in conformity with generally  accepted  accounting
principles as have been consistently  applied  previously by the Company and the
Subsidiaries.  Seller will also deliver a 1996 calendar year financial statement
and balance sheet which will be based on (i) audited  financial  information for
the  period  from  January 1 to June 30,  1996  and,  (ii)  unaudited  financial
information for the period from July 1, 1996 to December 31, 1996.

         SECTION 4.6  Inconsistent  Activities.  From the date hereof  until the
termination  hereof,  neither  the  Company,  any  Subsidiary,  nor any of their
officers, directors,  employees or agents will, directly or indirectly, (a) take
any action to entertain,  accept, solicit, initiate or encourage any Acquisition
Proposal  (defined  below) or (b)  engage in  negotiations  with,  disclose  any
non-public  information  relating to the Company,  or any Subsidiary,  or afford
access to the properties, books or records of the Company, or any Subsidiary to,
or enter into any  agreement  or option with respect to the  acquisition  of the
Company, or any Subsidiary,  with, any Person that may be considering making, or
has made, an Acquisition  Proposal.  Seller and the Company will promptly notify
Purchaser after receipt of any  Acquisition  Proposal or any indication that any
Person is  considering  making an any  Acquisition  Proposal  or any request for
non-public information relating to the Company, or any Subsidiary, or for access
to the properties,  books or records of the Company,  or any Subsidiary,  by any
Person that may be considering making, or has made, an Acquisition  Proposal and
will keep  Purchaser  fully  informed  of the  status  and  details  of any such
Acquisition  Proposal,  indication or request.  For purposes of this  Agreement,
"Acquisition  Proposal"  means any offer or proposal  for, or any  indication of
interest in, a merger or other business  combination  involving the Company,  or
any  Subsidiary,  or the acquisition of any equity interest in, or a substantial
portion  of the  assets  of,  the  Company,  or any  Subsidiary,  other than the
transactions contemplated by this Agreement.

         SECTION  4.7  Consents  and  Estoppels.  Prior  to  Closing,  and  as a
condition  to  Purchaser's  obligation  to close this  transaction,  Seller will
obtain,  at Seller's sole cost and expense,  (i) all consents from third parties
necessary or advisable in the reasonable  determination of Purchaser in order to
permit the consummation of the transactions contemplated in this





                                      -26-

<PAGE>



Agreement  without  impairing  the  validity  or  effectiveness  of any Lease or
Contract to which the Company is a party,  (ii) an  executed  landlord  estoppel
("Landlord  Estoppel")  from each party who is a Landlord under a Lease,  and an
executed  tenant  estoppel  ("Tenant  Estoppel") from each party who is a tenant
under a Lease, and (iii) an estoppel ("Contract Estoppel") from any counterparty
to any  party to any  Contract,  the  forms of said  Landlord  Estoppel,  Tenant
Estoppel, and Contract Estoppel being attached hereto as Exhibit 4.7(i), Exhibit
4.7(ii) and Exhibit 4.7(iii), respectively.

         SECTION 4.8 Amounts  Owing.  The  Company  shall,  prior to the Closing
Date, collect or provide for the collection of all amounts loaned or advanced by
it to, or otherwise receivable by it from, its directors,  its officers,  Seller
or any other employee or consultant.

         SECTION  4.9  Governmental   Filings.   Seller,  the  Company  and  the
Subsidiaries  will  cooperate  in preparing  and, if  necessary,  executing  all
documents and governmental  filings  necessary to the transactions  contemplated
hereby, including filings required under the Hart- Scott-Rodino Act.

         SECTION 4.10 INTENTIONALLY DELETED

         SECTION 4.11 Notices of Certain  Events.   The Company and Seller shall
promptly notify Purchaser of:

                  (a) any notice or other communication from any Person alleging
that the consent of such Person is or may be  required  in  connection  with the
transactions contemplated by this Agreement;

                  (b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions  contemplated
by this Agreement;

                  (c) any actions, suits, claims,  investigations or proceedings
commenced or, to the best of their knowledge, threatened against, relating to or
involving or otherwise  affecting the Company  which,  if pending on the date of
this  Agreement,  would have been  required to have been  disclosed  pursuant to
Section  2.20  or  which  relate  to  the   consummation  of  the   transactions
contemplated by this Agreement; and

                  (d) any fact or  circumstance  of which the  Company or Seller
has  knowledge  which  would  make any  representation  or  warranty  untrue  or
inaccurate in any material respect as of the Closing Date.

         SECTION 4.12  Physical  Inspection.  Purchaser  may cause,  in its sole
discretion  and  expense,  its  chosen  agents or  employees  ("Inspectors")  to
conduct,  at reasonable times and upon reasonable advance notice to the Company,
a physical and environmental audit of the properties





                                      -27-

<PAGE>



which are subject to the Leases.  Purchaser agrees to deliver to the Company, as
soon as practicable  after the issuance  thereof,  a copy of any written reports
prepared by said Inspectors.

         SECTION 4.13 Delivery of Information. Seller shall immediately deliver,
or cause the Company to immediately deliver, copies of the following information
in the Seller's or the  Company's  actual  possession  about the  Properties  to
Purchaser:

                  (a)  Copies  of all  physical  and  environmental  reports  or
inspections  obtained by,  prepared for or by, or in the possession of Seller or
the Company;

                  (b) Copies of all governmental approvals obtained by Seller or
the Company in connection with its acquisition,  ownership and/or development of
the Property (including,  without limitation, a Certificate of Occupancy for the
building constructed on the Property);

                  (c)  Copies  of  all  surveys  and   accompanying   surveyor's
certificates;

                  (d) Copies of all title  certificates,  title  commitments and
title  insurance  policies,  and copies of all  encumbrances  and other  matters
scheduled or shown as exceptions to title or requirements thereon;

                  (e)  A  copy  of  any  declaration,   easement,  agreement  or
restrictive covenant that does or may affect the use of the Properties.

         SECTION 4.14 Certain Taxes Arising in Connection  with this  Agreement.
All transfer,  documentary,  sales,  use, stamp,  registration,  value added and
other such Taxes and fees  (including  any penalties  and interest)  incurred in
connection with this Agreement shall be borne and paid by Seller when due.

         SECTION 4.15 INTENTIONALLY DELETED

         SECTION 4.16 Transfer of Certain Assets.  Prior to the Closing Date and
as a condition to Purchaser's  obligation,  Seller shall have caused the Company
(i) to transfer  all of the  Company's  right  title and  interest in and to (a)
Concepts in Lodging,  L.L.C.,  which is  currently  estimated to have a net book
value of  $300,000.00  and (b) LKG  Construction  Co.  Ltd.,  (ii) to obtain the
release of the Company from any liability, whether direct or contingent, related
to said companies, and (iii) the dissolution of Roasters Coffee Concepts, Ltd.







                                      -28-

<PAGE>



                                    ARTICLE V

                              CONDITIONS TO CLOSING

         SECTION 5.1  Conditions to Obligations  to Seller.  The  obligations of
Seller to consummate the  transactions  contemplated  by this Agreement shall be
subject to the fulfillment, at or prior to the Closing (or on such other date as
may be agreed by the parties),  of each of the following  conditions (any one or
more of which may be waived by Seller in his sole discretion).

                  (a)  Representations  and  Warranties;   Covenants  Performed;
Officer's Certificate. The representations and warranties of Purchaser contained
in this Agreement  shall be true and correct in all material  respects as of the
Closing  Date with the same force and effect as if made as of the Closing  Date,
and  all the  covenants  contained  in this  Agreement  to be  complied  with by
Purchaser  on or before the Closing  Date shall have been  complied  with in all
material  respects and Seller shall have received a  certificate  to such effect
signed by a duly authorized officer of Purchaser.

                  (b) Legal Opinion.  Seller shall have received from counsel to
the Purchaser a legal opinion, addressed to Seller and dated the Closing Date in
form and substance reasonably acceptable to Seller and Purchaser.

                  (c) Cash Payments. Seller shall have received the Cash and the
Shares

                  (d) Certified Organizational Documents and Resolutions. Seller
shall have  received a  certificate  duly executed and delivered by Secretary of
Purchaser  certifying as true, correct,  complete and unrevoked (a) the articles
of incorporation  and by-laws of Purchaser,  (b) the resolutions of the board of
directors of Purchaser  approving the  execution and delivery of this  Agreement
and  the  consummation  of  the  transactions  described  herein,  and  (c)  the
incumbency of the officers  executing this  Agreement and document  delivered at
Closing.

                  (e) Good  Standing  Certificates.  Seller shall have  received
Certificates  of Good Standing issued by the Secretaries of State for the States
in which Purchaser is organized.

                  (f) Registration Rights Agreement.  Seller shall have received
the Registration Rights Agreement duly executed and delivered by Purchaser.

                  (g) Employment Agreements.  Purchaser shall have duly executed
and  delivered  Employment  Agreements  for Ronald L.  Devine,  James M. Devine,
Lonnie Lane,  David L. Wright,  Frances L. Bean,  Jr., and Edward W. Hutchman in
form and substance acceptable to Purchaser and said parties.






                                      -29-

<PAGE>



         SECTION 5.2 Conditions to Obligations of Purchaser.  The obligations of
the Purchaser to consummate  the  transactions  contemplated  by this  Agreement
shall be  subject to the  fulfillment,  at or prior to the  Closing  (or on such
other date as may be agreed by the parties), of each of the following conditions
(any one or more of which may be waived by Purchaser in its sole discretion):

                  (a)  Representations  and  Warranties;   Covenants  Performed;
Seller's  Certificate.  The  representations  and  warranties  of Seller and the
Company  contained in this  Agreement  shall be true and correct in all material
respects as of the Closing  Date with the same force and effect as if made as of
the Closing  Date,  and all the  covenants  contained  in this  Agreement  to be
complied with by Seller and the Company on or before the Closing Date shall have
been complied with in all material respects, and Purchaser shall have received a
certificate to such effect from Seller and from a duly authorized officer of the
Company, respectively.

                  (b)  Certified   Organizational   Documents  and  Resolutions.
Purchaser  shall have  received a  certificate  duly executed and delivered by a
corporate  secretary of the Company  certifying as true,  correct,  complete and
unrevoked (x) the articles of incorporation and by-laws of the Company,  (y) the
resolutions of the shareholders and board of directors of the Company  approving
the  execution  and  delivery  of this  Agreement  and the  consummation  of the
transactions  contemplated  herein, and (z) the incumbency of officers executing
this Agreement and any documents at Closing.

                  (c) Legal Opinion.  Purchaser shall have received from counsel
to Seller and the Company a legal opinion,  addressed to the Purchaser and dated
the  Closing  Date in form and  substance  reasonably  acceptable  to Seller and
Purchaser.

                  (d)  Consents  Obtained;  Continued  Operation;   Certificate.
Purchaser   shall  have  received  all  written   consents  to  the  transaction
contemplated  herein from, and there shall have been given any required  notices
of the transaction  contemplated  herein to, the appropriate party to, or issuer
of,  each  Contract  Lease,  permit,  license and other  document or  instrument
specified in any Exhibit or Schedule hereto as requiring such consent or notice,
without change in the financial terms thereof or, in the aggregate, any material
cost to the Company  incurred in  connection  with  obtaining  such  consents or
giving such  notices.  No court,  arbitrator  or  governmental  body,  agency or
official shall have issued any order or adopted any statute, rule or regulation,
which, in the reasonable  opinion of Purchaser,  would  materially  restrain the
operation by Purchaser of the business of the Company  after the Closing Date. A
certificate  signed by the Seller,  that the condition of the first  sentence of
this Section 5.2(c) has been satisfied.

                  (e)  Stock  Certificates.   Seller  shall  have  executed  and
delivered to Purchaser free and clear of all Stock  Encumbrances,  a certificate
or  certificates  representing  the  Stock  to be sold by  Seller  to  Purchaser
hereunder, duly endorsed for transfer to Purchaser.





                                      -30-

<PAGE>




                  (f)  Landlord  and  Tenant  Estoppels.  Purchaser  shall  have
received all of the originals,  properly  executed  Landlord  Estoppels,  Tenant
Estoppels, and Contract Estoppels, in form and content satisfactory to Purchaser
in its sole discretion.

                  (g)  FIRPTA  Certificate.  Purchaser  shall have  received  an
affidavit,  executed in  accordance  with Code Section 1445 and the  regulations
promulgated  thereunder,  certifying that the Company are not United States real
property holding corporations.

                  (h)  Certificate  of  Good  Standing.   Purchaser  shall  have
received  certificates  of good standing from the  Secretaries  of State for the
State in which the Company is organized and from each state in which the Company
conducts its business.

                  (i) Board Approval.  Purchaser's Board of Directors shall have
approved the execution and delivery of this  Agreement and the  consummation  of
the transactions  contemplated  herein. (j) Transfer of Ownership.  Seller shall
have caused the  transfers  set forth in Section 4.16 above,  and shall  deliver
evidence of same to Purchaser.

                  (k)  Disclosure  Schedule.  Purchaser  shall have received the
Disclosure  Schedule  within the time period set forth in Section 2.1 and,  same
shall be in form and substance acceptable to Seller in its sole discretion.

         SECTION  5.3  Further  Assurances.  At any time on or after the Closing
Date, each party will execute and deliver any further  assignments,  conveyances
and other assurances, documents and instruments of transfer reasonably requested
by another party to consummate the transaction contemplated hereby.


                                   ARTICLE VI

                           INDEMNIFICATION; LIABILITY

         SECTION  6.1   Survival  of   Representations   and   Warranties.   The
representations and warranties of Seller and the Company set forth in Article II
and Purchaser in Article III hereof shall survive the Closing through and expire
on the close of  business of the  twenty-four  months  after the  Closing  Date;
provided,  however,  the representations and warranties dealing with Tax matters
shall  survive  through the tenth day  following  the running of the  applicable
statute of  limitations  after  given  effect to any  extensions  or waiver.  If
written notice of a claim has been given prior to, but not after, the expiration
of the  applicable  representations  and warranties by party in whose favor such
representations  and  warranties  have  been  made to the  party  that made such
representations and warranties, then the relevant representations and warranties
shall survive as to such claim, until the claim has been finally resolved.





                                      -31-

<PAGE>




         SECTION 6.2  Indemnification by Seller.  Except as otherwise limited by
this  Article,  Purchaser  and  its  officers,  directors,   employees,  agents,
successors and assigns shall be indemnified and held harmless by Seller, for any
and all liabilities,  losses,  damages,  claims,  costs and expenses,  interest,
awards, judgments and penalties (including, without limitation, reasonable legal
costs and  expenses)  arising  out of or  resulting  from (a) the  breach of any
representation  or warranty by Seller or the Company  contained herein or in any
document delivered  hereunder at the Closing;  or (b) the breach of any covenant
or  agreement  contained  herein  to be  performed  by  Seller  or the  Company;
provided,  however,  for  purposes  of  this  Section  6.2  only,  Seller  shall
specifically  exclude James M. Devine,  Robert C. Ludwig,  Jr., David L. Wright,
Frances L. Bean, Jr., and Harry R. Uber.

         SECTION 6.3  Indemnification by Purchaser.  Except as otherwise limited
by this Article VI, Seller shall be  indemnified  and held harmless by Purchaser
for any and all  liabilities,  losses,  damages,  claims,  costs  and  expenses,
interest,  awards,  judgments  and  penalties  (including,  without  limitation,
reasonable  legal costs and expenses)  arising out of or resulting  from (a) the
breach of any representation or warranty by the Purchaser contained herein or in
any  document  delivered  hereunder  at the  Closing;  or (b) the  breach of any
covenant or agreement by the Purchaser contained herein.

         SECTION 6.4 General  Indemnification  Provisions.  (a) The  indemnified
party shall promptly notify the indemnifying party of any claim, demand,  action
or proceeding  for which  indemnification  is sought under Section 6.2 or 6.3 of
this Agreement and, if such claim, demand, action or proceeding is a third party
claim, demand, action or proceeding, the indemnifying party will have the right,
at its own  expense,  to assume the defense  thereof  using  counsel  reasonably
acceptable to the indemnified party,  except in the case of a claim that relates
to Taxes,  as to which  Purchaser  shall assume the defense,  and Seller may, at
their sole expense,  participate in such defense.  The  indemnified  party shall
have the right to  participate,  at its own  expense,  with  respect to any such
third party claim,  demand,  action or proceeding.  In connection  with any such
third party claim,  demand,  action or  proceeding,  the parties  thereto  shall
cooperate  with each other and provide each other with access to relevant  books
and records in their possession.  No such third party claim,  demand,  action or
proceeding  shall be settled  without prior written  consent of the  indemnified
party,  provided,  however,  that if a firm, written offer is made to settle any
such third party claim, demand,  action or proceeding and the indemnifying party
proposes to accept such settlement and the indemnified  party refuses to consent
to such settlement,  then: (i) the  indemnifying  party shall pay such amount to
the indemnified  party;  (ii) the indemnifying  party shall be excused from, and
the indemnified  party shall be solely  responsible  for, all further defense of
such third party  claim,  demand,  action or  proceeding;  and (iii) the maximum
liability of the indemnifying party relating to such third party claim,  demand,
action,  or  proceeding  shall be the amount of the proposed  settlement  if the
amount  thereafter  recovered  from the  indemnified  party on such third  party
claim,  demand,  action or proceeding is greater that the amount of the proposed
settlement.






                                      -32-

<PAGE>



                  (b) Any payment made to or on behalf of any indemnified  party
shall be increased  to such amount as will,  after taking into account all Taxes
imposed  with respect to the accrual or receipt of such payment (as the same may
be increased pursuant this sentence),  equal the amount of the payment otherwise
due  without  considering  the taxes  payable  by such  party as a result of the
accrual or receipt of such payment.

                  (c) Upon payment by an  indemnified  party to a third party of
an amount subject to indemnification, the indemnifying party shall discharge its
indemnification obligation by paying to the indemnified party an amount equal to
the amount paid by the indemnified party to the third party; provided,  however,
Purchaser shall indemnify  Ronald L. Devine for any guarantees  executed by said
person guaranteeing an obligation of the Company.

                  (d) Any payment  pursuant to this Article VI shall be made not
later than thirty (30) days after receipt by the  indemnifying  party of written
notice from the indemnified party stating that an indemnifiable  amount has been
paid to a third party,  and  specifying the amount thereof and the amount of the
indemnity payment requested.

         SECTION 6.5 Limits on Indemnification and Liability.

                  (a) The  amounts  for which the  indemnifying  party  shall be
liable  under  of this  agreement  shall  be net of (i) any  insurance  proceeds
received by the  indemnified  party and (ii) any tax benefits to the indemnified
party,  arising  from  the  facts  giving  rise to the  liability  or  right  of
indemnification.

                  (b) Purchaser  shall not be entitled to assert any right under
this Agreement unless the aggregate amount of Purchaser's indemnified claims and
liability exceed $50,000.00, and then only to the extent the aggregate amount of
Purchaser's indemnified claims liabilities exceed such amount.

                  (c) Seller  shall not be  entitled  to assert any right  under
this Agreement  unless the aggregate amount of the Seller's  indemnified  claims
and  liability  exceed  $50,000.00,  and then only to the extent  the  aggregate
amount of the Seller's indemnified claims and liabilities exceed such amount.

                  (d) Purchaser shall not be entitled to recover from any Seller
an amount in excess of the Purchase  Price with  respect to such Seller,  except
that this limitation  shall be inapplicable  with respect to any liability of or
indemnified  claims  against any Seller who had actual  knowledge of the matters
pertaining to the liability or indemnified claim and nonetheless  misrepresented
the same in this Agreement or the documents delivered at the Closing.







                                      -33-

<PAGE>



                                   ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

         SECTION 7.1  Termination.  This Agreement may be terminated at any time
prior to the Closing:

                  (a)     by the mutual written consent of Seller and Purchaser;

                  (b) by either  Seller or  Purchaser  if the Closing  shall not
have occurred by June 15, 1997; provided,  however,  that the right to terminate
this  Agreement  under this  Section  7.1(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement shall have been the
cause of, or shall have  resulted in the failure of, the Closing to occur on the
Closing  Date and  nothing  contained  herein  shall  relieve  such  party  from
liability for breach of this Agreement.

                  (c)   by    Purchaser   if   there   has   been   a   material
misrepresentation  or material breach of warranty or covenant on the part of the
Company or Seller, and by Seller if there has been a material  misrepresentation
or material breach of warranty or covenant on the part of Purchaser;

                  (d) by Purchaser or the Company and Seller if it or they shall
reasonably  determine that the transactions  contemplated by this Agreement have
become  inadvisable or  impracticable  by reason of the institution or threat by
state, local or Federal governmental authorities;

                  (e) by Purchaser if the business,  assets, prospects,  results
of operations  or financial  condition of the Company have been  materially  and
adversely  affected  since the  Balance  Sheet  Date,  by reason of  changes  or
developments in the operation of the business of the Company.

         SECTION 7.2 Waiver. At any time prior to the Closing,  either Seller or
the  Purchaser  may  (a)  extend  the  time  for the  performance  of any of the
obligations or other acts of the other party hereto,  (b) waive any inaccuracies
in the  representations and warranties of the other party contained herein or in
any document  delivered  pursuant  hereto or (c) waive  compliance  by the other
party  with any of the  agreements  or  conditions  contained  herein.  Any such
extension  or waiver  shall be valid if set forth in an  instrument  in  writing
signed by the party or parties to be bound thereby.







                                      -34-

<PAGE>



                                  ARTICLE VIII

                               GENERAL PROVISIONS

         SECTION  8.1   Notices.   All  notices,   request,   demands  or  other
communications  required or permitted hereunder shall be in writing and shall be
deemed to have been duly given upon delivery in person or upon the expiration of
seven days after the date of positing,  if mailed by registered or certified air
mail,  postage  prepaid,  to the parties at the following  addresses (or at such
other  address for a party and shall be  specified  by a notice,  provided  that
notice of change of address shall be effective only upon receipt):

                  (a) if to Seller,  then to the  individuals  listed on Exhibit
8.1(a)

                           with a copy to:

                           Roger T. Whitaker, Esq.
                           Luper, Sherriff & Niedenthal
                           50 West Broad Street
                           Suite 1200
                           Columbus, OH  43215

                  (b)      if to Purchaser

                           Buckhead America Corporation
                           4243 Dunwoody Club Drive
                           Suite 200
                           Dunwoody, GA 30350
                           Attn: Mr. Douglas C. Collins

                           with a copy to:

                           James E. Dorsey, Esq.
                           1201 W. Peachtree Street
                           Suite 2800
                           Atlanta, GA 30309-3400


         SECTION 8.2 Headings.  The headings contained in this Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.






                                      -35-

<PAGE>



         SECTION  8.3  Severability.  If any  term or  other  provision  of this
Agreement is invalid,  illegal or incapable of being enforced by any rule of law
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially  adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall  negotiate  n good  faith to modify  this  Agreement  so as to effect  the
original intent of the parties as closely as possible in an acceptable manner so
that  transactions  contemplated  hereby are  fulfilled to the  greatest  extent
possible.

         SECTION 8.4 Entire  Agreement.  This Agreement  constitutes  the entire
agreement among the parties and supersedes all prior agreements and undertakings
with  respect to the subject  matter  hereof,  except  that the  Confidentiality
Agreement  between  Purchaser  and the  Company  shall  remain in full force and
effect.

         SECTION 8.5 Assignment. This Agreement shall not be assigned by Seller.
Purchaser shall have the unlimited right to assign any or all of the rights (but
not its obligations) under this Agreement.  This Agreement shall be binding upon
and shall  inure to the  benefit  of the  successors  and  permitted  assigns of
Purchaser and Seller.

         SECTION 8.6 No  Third-Party  Beneficiaries.  This  Agreement is for the
sole benefit of the parties hereto and nothing herein expressed or implied shall
give or be  construed  to give to any person or entity,  other than the  parties
hereto and such assigns, any legal or equitable rights hereunder.

         SECTION 8.7  Amendment.  This  Agreement may not be amended or modified
except by an instrument in writing signed by the parties hereto.

         SECTION 8.8 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed  shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

         SECTION 8.9  Governing  Law.  THIS  AGREEMENT  SHALL BE GOVERNED BY AND
CONSTRUED UNDER AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO.

         SECTION 8.10 INTENTIONALLY DELETED

         SECTION 8.11 Binding  Agreement.  This Agreement  shall be binding upon
and inure to the  benefit  of the  parties  hereto and their  respective  heirs,
executors, administrators, successors and permitted assigns.





                                      -36-

<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first written above.

                                      PURCHASER

                                      BUCKHEAD AMERICA CORPORATION


                                      By:
                                               Douglas C. Collins
                                               President


                                      SELLER


                                      ------------------------------
                                      Ronald L. Devine


                                      ------------------------------
                                      Edward W. Hutchman


                                      ------------------------------
                                      James M. Devine


                                      ------------------------------
                                      David L. Wright


                                      ------------------------------
                                      Robert C. Ludwig, Jr., individually and
                                      as Co-Trustee of the Robert C. Ludwig
                                      Family Trust U/A Dated 12/26/96


                    [Signatures continued on following page.]






                                      -37-

<PAGE>



                                     ------------------------------
                                     Francis L. Bean, Jr.


                                     ------------------------------
                                     Harry R. Uber


                                     ------------------------------
                                     Paul L. Ludwig

 
                                     ------------------------------
                                     Donald P. Ludwig, as Co-Trustee of
                                     the Robert C. Ludwig Family Trust
                                     U/A Dated 12/26/96





                                      -38-