Exhibit 10.21


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                      AGREEMENT AND PLAN OF REORGANIZATION

                                      AMONG

                        Southern Energy Homes, Inc., and
                            Retail Acquisition Corp.,
                                       and
                                BR Holding Corp.,
                              BR Chilton Co., Inc.,
                              BR Mississippi, Inc.,
                             BR Marshall Co., Inc.,
                            BR Tuscaloosa Co., Inc.,
                            SC Tuscaloosa Co., Inc.,
                                TH Center, Inc.,
                              SE Management, Inc.,
                               BR Agency, Inc. and
               those Shareholders of BR Holding Corp. named herein







                         DATED: As of November 21, 1996




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                      AGREEMENT AND PLAN OF REORGANIZATION


                                TABLE OF CONTENTS

ARTICLE 1. DESCRIPTION OF TRANSACTIONS
1.1 Agreement to Consummate Transactions
1.2 Time and Place of Closing
1.3 Consummation of Transactions
1.4 Merger Consideration
1.5 Effect of Transactions
1.6 Knowledge

ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS
2.1 Organization and Qualification of Seller
2.2 Subsidiaries
2.3 Capitalization of Seller
2.4 Authorization of Transaction
2.5 Compliance of Transaction With Laws
2.6 Financial Statements
2.7 Title to Properties; Liens; Condition of Properties
2.8 Payment of Taxes
2.9 Absence of Undisclosed Liabilities
2.10 Collectibility of Accounts Receivable
2.11 Inventories 2.12 Absence of Certain Change
2.13 Ordinary Course 2.14 Other Stockholder Businesses
2.15 Trade Names, Trademarks and Copyrights
2.16 Trade Secrets and Customer Lists
2.17 Contracts and Commitments
2.18 Employees and Employee Benefits
2.19 Reserved
2.20 Permits; Burdensome Agreements
2.21 Borrowings and Guarantees
2.22 Banking Relations and Powers of Attorney
2.23 Insurance
2.24 Warranty or Other Claims
2.25 Compliance with Laws
2.26 Litigation
2.27 Minute Books
2.28 Finder's Fee
2.29 Transactions with Interested Persons
2.30 Absence of Sensitive Payments
2.31 Disclosure of Material Information

ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Organization of Buyer






3.2 Capitalization of Buyer
3.3 Authorization of Transaction
3.4 Buyer's Common Stock

ARTICLE 4. COVENANTS OF SELLER AND STOCKHOLDERS
4.1 Conduct of Business
4.2 Authorization from Others
4.3 Breach of Representations and Warranties
4.4 Consummation of Agreement
4.5 Buyer's Due Diligence
4.6 Financial Statements of Seller and Subsidiaries
4.7 Expansion of Subsidiaries' Business.

ARTICLE 5. COVENANTS OF BUYER
5.1 Authorization from Others
5.2 Consummation of Agreement
5.3 Dealer Volume Incentive Program
5.4 Conduct of Business of Subsidiaries

ARTICLE 6. CONDITIONS TO OBLIGATIONS OF BUYE
6.1 Shareholder Authorization
6.2 Dissenting Stockholders
6.3 Representations; Warranties; Covenants
6.4 Resignations of Officers and Directors
6.5 Opinion of Seller's Counsel
6.6 Securities Law Compliance
6.7 Employment/Non-Competition Contracts
6.8 RESERVED
6.9 Approval of Buyer's Board of Directors
6.10 Approval of Buyer's Advisors
6.11 Absence of Certain Litigation
6.12 Buyer's Due Diligence

ARTICLE 7. CONDITIONS TO OBLIGATIONS OF SELLER AND STOCKHOLDERS
7.1 Shareholder Authorization
7.2 Representations; Warranties; Covenants
7.3 Opinion of Buyer's Counsel
7.4 Real Estate Development Agreement
7.5 Securities Law Compliance

ARTICLE 8. TERMINATION OF AGREEMENT
8.1 Termination
8.2 Effect of Termination
8.3 Right to Proceed

ARTICLE 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
9.1 Survival of Warranties






ARTICLE 10.  INDEMNIFICATION
10.1 Indemnification by Stockholders
10.2 Indemnification by Buyer
10.3 Notice; Defense of Claims
10.4 Payment of Claims; Arbitration

ARTICLE 11.  COMPLIANCE WITH SECURITIES LAWS
11.1 Delivery of Information
11.2 Acknowledgment of Receipt of Information
11.3 RESERVED
11.4 Compliance with Securities Laws
11.5 Report
11.6 Statements, True and Correct
11.7 Covenants of Buyer

ARTICLE 12.  REGISTRATION
12.1 Required Registration
12.2 Participation of Selling Stockholders
12.3 Conditions of Buyer's Obligations to Register Shares
12.4 Expenses
12.5 Financial Information
12.6 Exclusive Obligation to Register
12.7 State Securities Laws
12.8 Indemnification

ARTICLE 13.  MISCELLANEOUS
13.1 Fees and Expenses
13.2 Notices
13.3 Entire Agreement
13.4 Assignability
13.5 Publicity and Disclosures
13.6 Confidentiality
13.7 Governing Law; Severability
13.8 Counterparts
13.9 Effect of Table of Contents and Headings








                      AGREEMENT AND PLAN OF REORGANIZATION


         AGREEMENT  entered  into as of the 21st day of November,  1996,  by and
between Southern Energy Homes, Inc., a Delaware corporation,  with its principal
place of business located at Highway 41 North, P. O. Box 390,  Addison,  Alabama
35540 ("Buyer"),  SEH Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary  of  Buyer  ("Acquisition  Corp."),  BR  Holding  Corp.,  a  Delaware
corporation,  with its principal place of business located in Northport, Alabama
(the "Seller"),  each of the following  wholly-owned  subsidiaries of Seller: BR
Chilton Co.,  Inc., BR  Mississippi,  Inc., BR Marshall Co., Inc., BR Tuscaloosa
Co., Inc., SC Tuscaloosa Co., Inc., TH Center, Inc., SE Management, Inc., and BR
Agency, Inc.  (collectively,  the "Subsidiaries"),  and W. Thomas Deas, James M.
Moore,  III, W. David Deas, J. M. Deas, Jr., James Miller Deas, Thomas Deas, Jr.
and Gregory C. Vogel (collectively, the "Stockholders").

         WHEREAS,  the  parties  hereto  wish to adopt a plan and  agreement  of
reorganization  in order to effectuate the merger of Acquisition  Corp. with and
into Seller (the "Merger") in accordance with the laws of the States of Delaware
and Alabama and in accordance with a Certificate of Merger (the  "Certificate of
Merger")  substantially  in the form attached  hereto as Exhibit A, so that upon
consummation of the Merger,  Seller will be a wholly-owned  subsidiary of Buyer,
and Acquisition Corp. will cease to exist; and

         WHEREAS,  it is the intent of the parties that the transaction  qualify
as a tax-free  reorganization  within the meaning of Section 368(a)(2)(E) of the
Internal Revenue Code of 1986, as amended, and corresponding provisions of state
law.

         NOW, THEREFORE,  in order to consummate said plan of reorganization and
in consideration of the mutual  agreements  herein,  the parties hereto agree as
follows:

ARTICLE 1.  DESCRIPTION OF TRANSACTIONS.

1.1 Agreement to Consummate Transactions. Subject to the terms and conditions of
this Agreement and of the Merger Agreement,  Buyer,  Seller and the Stockholders
agree to consummate or cause to be consummated the transactions  contemplated by
Sections 1.2 through 1.5 of this  Agreement and agree that the  consummation  of
each of those  transactions is conditional  upon the consummation of each of the
other transactions.

1.2 Time and Place of Closing.  The closing of the transactions  provided for in
this Agreement  (herein  called the  "Closing")  shall be held at the offices of
Hubbard,  Smith,  McIlwain,  Brakefield & Shattuck,  P.C.,  808 Lurleen  Wallace
Blvd., North, Tuscaloosa,  Alabama, on November 21, 1996 or at such other place,
date or time as may be fixed by mutual agreement of the parties.

1.3  Consummation of  Transactions.  If at the Closing no condition exists which
would  permit any of the parties to terminate  this  Agreement or if a condition
then exists and the party entitled to terminate because of that condition waives
its right to do so in writing in accordance  with the notice  provisions of this
Agreement, then the transactions shall be consummated on such date, and then and
thereupon  Acquisition  Corp. and Seller will execute and  immediately  file the
Certificate  of Merger with the  Secretary  of State of the State of Delaware in
accordance with the provisions of the business  corporation law of the States of
Delaware.  Upon the filing of the  Certificate  of Merger with the  Secretary of
State of the State of Delaware, the merger of Acquisition Corp. into Seller will
become effective (the time of such filing being  hereinafter  referred to as the
"Effective Time of Merger").






1.4 Merger Consideration.  Subject to the terms and conditions hereof, the Buyer
shall pay to the Seller  the  following  consideration  in  connection  with the
Merger (all as more particularly described below): (i) Five Million Five Hundred
Seventy Six Thousand Six Hundred  Forty  Dollars  ($5,576,640)  primarily in the
form of Buyer Common Stock (the "Fixed Amount"); (ii) an additional amount equal
to the amount, if any, of Seller EBIT (as defined below in paragraph (d) of this
Section 1.4) for the period  beginning as of September 20, 1996 and ending as of
December  31,  1996  as  reviewed  or  audited  by  Buyer's  independent  public
accountants (the "Stub Period Earnings Amount"); and (iii) additional contingent
amounts,  payable  subject to and  contingent  upon Seller and the  Subsidiaries
achieving  certain  Seller EBIT targets for the twelve (12) month periods ending
December  31, 1997 and  December 31, 1998,  determined  in  accordance  with the
Contingent Payment Schedule attached hereto as Exhibit C and incorporated herein
by this reference (the "Contingent Amounts");

         The  Stockholders  hereby  authorize  and  appoint W.  Thomas  Deas and
Gregory  C. Vogel as joint  escrow  agent (the  "Escrow  Agent") to receive  and
accept  delivery of the cash and the Fixed Payment Shares  included in the Fixed
Amount and do hereby  direct the Buyer to  deliver  such cash and Fixed  Payment
Shares to the Escrow Agent at the  Closing.  In the event that W. Thomas Deas or
Gregory C. Vogel dies,  resigns is otherwise  unable to serve in the capacity of
Escrow Agent, a successor  shall be appointed by a majority of the  Stockholders
and notice of such appointment  shall be given to the Buyer. As of the Effective
Time of Merger, by virtue of the Merger and without any further action:

         (a) Fixed Amount.  Each share of Seller  common stock,  $.01 par value,
issued and outstanding immediately prior to the Effective Time of Merger (herein
"BR  Common  Stock")  shall  entitle  the  holder  thereof to receive in payment
therefor at the Closing:

                  (1) that amount of cash via federal  funds wire transfer as is
determined by dividing the sum of (a) One Million  Seventy -Five  Thousand Three
Hundred  Twenty-eight  Dollars  ($1,075,328)  by (b) the  number of shares of BR
Common Stock outstanding at the Effective Time of Merger; and

                  (2) that number of duly authorized, validly issued, fully paid
and  non-assessable  shares of the Voting Common Stock of Southern Energy Homes,
Inc., a Delaware Corporation ("Buyer Common Stock") as is determined by dividing
the sum of (a) Four  Million  Five Hundred One  Thousand  Three  Hundred  Twelve
Dollars  ($4,501,312)  by (b) the fair market  value of Buyer  Common Stock (the
"Fixed  Payment  Shares"),  as  determined  by taking the average of the closing
prices for Buyer Common Stock as reported by the Nasdaq  National Market for the
ten (10) trading days  immediately  preceding  the third  trading day before the
date of the Closing,  and then dividing the result by the number of shares of BR
Common Stock  outstanding  at the Effective Time of Merger;  provided,  however,
that such number of shares of Buyer Common Stock shall be rounded to the nearest
whole number.


         (b) Stub Period Earnings Amount.  In addition to the  consideration set
forth above,  each share of BR Common Stock shall entitle the holder  thereof to
receive on March 31, 1997 as additional payment therefor:

                  (1) that amount of cash via federal  funds wire transfer as is
determined  by dividing  (a) twenty  (20%)  percent of the Stub Period  Earnings
Amount  by (b) the  number  of shares  of BR  Common  Stock  outstanding  at the
Effective Time of Merger; and







                  (2) that number of duly authorized, validly issued, fully paid
and  non-assessable  shares of Buyer Common Stock as is  determined  by dividing
eighty (80%) percent of the Stub Period Earnings Amount by the fair market value
of Buyer Common Stock (the "Stub  Period  Payment  Shares"),  as  determined  by
taking the  average of the closing  prices for said Common  Stock as reported by
the  Nasdaq  National  Market  for the  twenty  (20)  trading  days  immediately
preceding the third trading day before March 31, 1997, the date on which payment
of the Stub Period Earnings Amount is due and payable.

         (c)  Contingent  Amount.  In  addition to the  consideration  set forth
above, each share of BR Common Stock shall entitle the holder thereof to receive
on March 31, 1998, with respect to the Contingent Amount, if any, for the twelve
(12) month period ending  December 31, 1997, and on March 31, 1999, with respect
to the Contingent  Amount,  if any, for the twelve month period ending  December
31, 1998, as additional payment therefor:

                  (1) that amount of cash via federal  funds wire transfer as is
determined  by dividing (a) twenty (20%)  percent of the  Contingent  Amount for
1997 or 1998, as the case may be, by (b) the number of shares of BR Common Stock
outstanding at the Effective Time of Merger; and

                  (2) that number of duly authorized, validly issued, fully paid
and  non-assessable  shares of Buyer Common Stock as is  determined  by dividing
eighty (80%) percent of the Contingent  Amount for 1997 or 1998, as the case may
be, by the fair market  value of Buyer  Common  Stock (the  "Contingent  Payment
Shares"),  as  determined  by taking the average of the closing  prices for said
Buyer Common Stock as reported by the Nasdaq National Market for the twenty (20)
days  immediately  preceding  the third trading day before the date on which the
Contingent Amount is due and payable hereunder (the "Contingent  Payment Trading
Period").

         (d) For purposes of this Section 1.4 and Exhibit B, "Seller EBIT" means
Consolidated  Earnings  (defined in subparagraph (e) of this Section 1.4) before
interest (other than (i) floor plan interest  incurred with respect to inventory
and  (ii)  interest   incurred  with  respect  to  money   borrowed  or  capital
expenditures  made in  connection  with the  expansion  of the  Seller's  or the
Subsidiaries'  operations,  which interest in neither case shall be greater than
the cost of funds to Buyer), taxes,  management fees and any administrative fees
paid to Buyer.

         (e) For purposes of this  Agreement,  the "Fixed  Payment  Shares," the
"Stub Period Payment Shares" and the  "Contingent  Payment Shares" are sometimes
collectively  hereinafter  referred to as the "Purchase Shares." For purposes of
this Agreement,  "Consolidated  Earnings" means the consolidated earnings of the
Seller and the Subsidiaries.

         (f) Each  share of  Acquisition  Corp.  common  stock,  $.01 par value,
issued and outstanding  immediately prior to the Effective Time of Merger, shall
be converted into an issued and outstanding share of BR Common Stock.

         (g) In the  event  that  Buyer,  prior  to the  Closing,  declares  any
dividend payable in shares of Buyer Common Stock to shareholders of record as of
a date prior to the Closing, or splits or combines the outstanding shares of the
Buyer Common Stock, then an appropriate proportional adjustment shall be made in
the number of Purchase Shares specified above.

1.5 Effect of Transactions. As a result of the foregoing transactions, after the
Merger Buyer will own all of the issued and outstanding  stock of Seller and the
persons who were holders of BR Common Stock immediately




prior  to the  Merger  will  have  received  Buyer  Common  Stock  and the  cash
consideration, as set forth in Section 1.4 above.

1.6  Knowledge.  "Knowledge"  where used in this  Agreement  shall  refer to the
knowledge, information and belief of the entity referred to and their respective
officers and directors.

ARTICLE 2.  REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS.

Each of the Seller, the Subsidiaries and the Stockholders  hereby represents and
warrants to Buyer as follows:

2.1  Organization  and  Qualification  of Seller.  Seller is a corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware  with full power and  authority to own or lease its  properties  and to
conduct its business in the manner and in the places where such  properties  are
owned or leased or such  business  is  conducted  by it. The copies of  Seller's
Certificate  of  Incorporation  or  equivalent  document as amended to date (the
"Charter"), certified by the Secretary of State of the State of Delaware, and of
Seller's  by-laws  as  amended  to  date,  certified  by its  Secretary  (or the
equivalent),  and  heretofore  delivered  to Buyer's  counsel,  are complete and
correct.  Seller is duly  qualified to do business as a foreign  corporation  in
those  jurisdictions in which such qualification is required,  and Seller is not
required to be licensed or qualified to conduct its business or own its property
in any other jurisdiction.

2.2 Subsidiaries.  The issued and outstanding  capital stock of the Subsidiaries
is as follows, and all of such capital stock is owned of record and beneficially
by the Seller:

Name of                    State of          Issued and          Amount Owned by
Corporation                Incorporation     Outstanding Stock      Seller

BR Chilton Co., Inc.       Alabama           1,000                   100%
                                                                     
BR Mississippi, Inc.       Alabama           1,000                   100%
                                                                     
BR Marshall Co., Inc.      Alabama           1,000                   100%
                                                                     
BR Tuscaloosa Co., Inc.    Alabama           1,000                   100%
                                                                     
BR Agency, Inc.            Alabama           1,000                   100%
                                                                     
SC Tuscaloosa Co., Inc.    Alabama           1,000                   100%
                                                                     
TH Center, Inc.            Alabama           1,000                   100%
                                                                     
SE Management, Inc.        Alabama           1,000                   100%
                                                                     
Neither  Seller  nor any  Subsidiary  owns any  securities  issued  by any other
business  organization  or  governmental   authority,   except  U.S.  Government
securities.  The Subsidiaries are corporations duly organized,  validly existing
and in good standing  under the laws of the State of Alabama with full power and
authority  to own or lease  their  respective  properties  and to conduct  their
respective  businesses in the manner and in the places where such properties are
owned or leased or such businesses are conducted.  The copies of the




Certificate of Incorporation (or equivalent  document),  as amended to date (the
"Charter"), and by-laws of each Subsidiary, as amended to date, certified by the
Secretary of State of the state of Alabama or its Secretary (or the  equivalent)
and heretofore delivered to Buyer's counsel,  are complete and correct.  Each of
the  Subsidiaries  is duly qualified to do business as a foreign  corporation in
every jurisdiction in which such  qualification is required.  Neither Seller nor
any of the  Subsidiaries  is a partner or  participant  in any joint  venture or
partnership  of any kind.  Seller  has good and  marketable  title to all of the
issued and outstanding shares of capital stock of each of the Subsidiaries, free
of all claims, liens, encumbrances or restrictions of any kind, and there are no
outstanding options, warrants or agreements of any kind for the issuance or sale
of, or outstanding shares of securities  convertible into, any additional shares
of stock of any of the Subsidiaries.

2.3 Capitalization of Seller. The authorized capital stock of Seller consists of
3,000 shares of Common Stock,  .01 par value,  of which 1,000 shares are validly
issued  and  outstanding,  fully  paid  and  non-assessable.   The  Stockholders
collectively  are the  record  and  beneficial  owners of all of the  issued and
outstanding  capital  stock of  Seller,  free and  clear of all  claims,  liens,
encumbrances or  restrictions  of any kind.  Except as set forth on Schedule 2.3
hereto,  there  are no (a)  outstanding  warrants,  options  or other  rights to
purchase or acquire,  or preemptive  rights with respect to the issuance or sale
of, the  capital  stock of Seller or any  Subsidiary,  (b) other  securities  of
Seller or any Subsidiary directly or indirectly convertible into or exchangeable
for shares of capital stock of Seller or any Subsidiary,  or (c) restrictions on
the transfer of the Seller's capital stock.

2.4  Authorization  of Transaction.  Subject to the affirmative vote of Seller's
stockholders  referred to in Section 6.1,  all  necessary  action,  corporate or
otherwise,  has been taken by Seller to authorize  the  execution,  delivery and
performance  of this  Agreement and the Merger  Agreement  and the  transactions
contemplated hereby and thereby, and this Agreement and the Merger Agreement are
the valid and binding obligations of Seller enforceable in accordance with their
terms,  subject  to laws of  general  application  affecting  creditors'  rights
generally.  All necessary action,  corporate or otherwise has been taken by each
Subsidiary  to  authorize  the  execution,  delivery  and  performance  of  this
Agreement and the transactions  contemplated  hereby,  and this Agreement is the
valid and binding  obligation of each Subsidiary  enforceable in accordance with
its terms,  subject to laws of general application  affecting  creditors' rights
generally.

2.5  Compliance of  Transaction  With Laws. To the best Knowledge of the Seller,
each Subsidiary,  and the Stockholders,  neither Seller nor any Subsidiary is in
violation of its Charter or by-laws as of the date hereof;  and, the  execution,
delivery and  performance  of this  Agreement  and the Merger  Agreement and the
transactions  contemplated hereby and thereby (a) do not require any approval or
consent of, or filing with, any  governmental  agency or authority in the United
States of America or otherwise  which has not been  obtained and which is not in
full  force and  effect as of the date  hereof,  (b) will not  conflict  with or
constitute a breach or violation of the respective Charters or by-laws of Seller
or any  Subsidiary  and  (c)  will  not  result  in a  violation  of any  law or
regulation to which they are subject.

2.6  Financial  Statements.  Attached as Schedule  2.6 hereto are the  following
unaudited financial  statements of each Subsidiary from inception,  all of which
statements are complete and correct and fairly present the financial position of
each  Subsidiary  as of October 31, 1996 and the results of their  operations on
the applicable  basis for the periods  covered thereby and have been prepared in
accordance with generally accepted accounting  principles  consistently  applied
throughout the periods involved and prior periods.

         The most  recent  balance  sheets of the  Subsidiaries  included in the
above financial statements are sometimes collectively referred to hereinafter as
the "Base Balance Sheets".





2.7      Title to Properties; Liens; Condition of Properties.

         (a) Set forth on  Schedule  2.7  hereto  is a  listing  of all the real
property  owned by Seller or any  Subsidiary at the date hereof,  all the leases
whereunder Seller or any Subsidiary leases real or personal property at the date
hereof and a complete  description  of the machinery and equipment used or owned
by Seller or any Subsidiary.  Except as specifically  disclosed in Schedule 2.7,
Seller and its Subsidiaries  have good and marketable title in fee simple to all
of their  real and  personal  property,  including  property  described  in said
Schedule,  and all of their leases are valid and subsisting and fully assignable
by Seller or its  Subsidiaries  (as the case may be) and no default exists under
any thereof.  None of such real property or other  property or assets is subject
to any mortgage,  pledge,  lien,  conditional  sale  agreement,  security title,
encumbrance or other charge except as specifically disclosed in said Schedule.

         (b)      Except as otherwise specified in Schedule 2.7 hereto:

                  (i) the buildings,  machinery and equipment of Seller and each
Subsidiary are adequate to conduct the business of the Subsidiaries as presently
conducted,   are  in  reasonably  good  repair,   have  been  well   maintained,
substantially  conform in all material respects with all applicable  ordinances,
regulations  and zoning or other laws and do not, to the best  Knowledge  of the
Seller,  each Subsidiary and the  Stockholders , encroach on property of others,
and such machinery and equipment is in good working order; and

                  (ii) as of the date hereof,  neither  Seller,  any Subsidiary,
nor any  Stockholder  knows of any pending or overtly  threatened  change of any
such  ordinance,  regulation  or zoning or other law and there is no  pending or
threatened condemnation of any such property.

2.8 Payment of Taxes.  Seller and each Subsidiary have filed all federal,  state
and local  income,  excise or franchise  tax  returns,  real estate and personal
property tax returns,  sales and use tax returns and other tax returns  required
to be filed by them and have paid all taxes  owing by them  except  taxes  which
have not yet accrued or otherwise  become due for which  adequate  provision has
been made in the  pertinent  financial  statements  referred  to in Section  2.6
above.  All  transfer,  excise and other taxes  payable to any  jurisdiction  by
reason of the  consummation of the  transactions  contemplated by this Agreement
shall be paid or provided for by the  Stockholders  after the Closing out of the
consideration payable by Buyer hereunder.  The provisions for taxes reflected in
the above-mentioned  financial  statements are adequate to cover any and all tax
liabilities  of  Seller  and each  Subsidiary  in  respect  of their  respective
businesses,  properties  and  operations  during  the  periods  covered  by said
financial statements and all prior periods. Neither the Internal Revenue Service
nor any other taxing  authority is now  asserting  or, to the best  knowledge of
Seller,  each Subsidiary and each  Stockholder,  threatening to assert,  against
Seller  and any  Subsidiary  any  deficiency  or claim for  additional  taxes or
interest thereon or penalties in connection therewith.

2.9 Absence of Undisclosed  Liabilities.  As of the respective dates of the Base
Balance Sheets,  neither Seller nor any Subsidiary had any material  liabilities
of any nature,  whether accrued,  absolute,  contingent or otherwise  (including
without  limitation  liabilities  as  guarantor  or  otherwise  with  respect to
obligations of others, or liabilities for taxes due or then accrued or to become
due),  except  (a)  liabilities  stated or  adequately  reserved  against on the
respective  Base  Balance  Sheets,  (b)  liabilities  not in  excess  of  $5,000
individually  or $50,000 in the  aggregate  arising  in the  ordinary  course of
business  since  the  date  of  the  respective  Base  Balance  Sheets  and  (c)
liabilities  disclosed in Schedule 2.9 hereto. There is no fact which materially
adversely affects or, to the best Knowledge of the Seller, any Subsidiary or any
Stockholder,  may in the  future  (so  far as can  now be  reasonably  foreseen)
materially adversely affect, the business,  properties,  operations or condition
of  Seller  or any 



Subsidiary on a  consolidated  basis which has not been  specifically  disclosed
herein or in a Schedule furnished herewith.

2.10  Collectibility of Accounts  Receivable.  All of the accounts receivable of
Seller and its Subsidiaries  shown or reflected on their respective Base Balance
Sheets or existing at the time of the  Closing,  less a reserve for bad debts in
the amount shown on their respective Base Balance Sheets,  are or will be at the
Closing valid and enforceable  claims,  fully  collectible and subject to no set
off or counterclaim. Neither Seller nor any Subsidiary has any accounts or loans
receivable from any person,  firm or corporation which is affiliated with any of
them or from any director, officer or employee of any of them.

2.11 Inventories.  All finished goods contained in the inventories of Seller and
each Subsidiary reflected on their respective Base Balance Sheets or existing at
the Closing are or will be at the Closing of a quality and quantity  saleable in
the ordinary  course of the business of Seller and each Subsidiary at prevailing
market prices  without  discounts.  All inventory  items shown on the respective
Base Balance Sheets or existing at the Closing are or will be priced at lower of
cost (FIFO basis) or market and reflect  write-downs to realizable values in the
case of items which have become  obsolete or  unsaleable  (except at prices less
than cost) through regular  distribution  channels in the ordinary course of the
business of Seller and its Subsidiaries.  Subject to write-downs  complying with
the preceding  sentence,  the values of the inventories stated in the respective
Base Balance Sheets reflect the normal  inventory  valuation  policies of Seller
and its Subsidiaries  and were determined in accordance with generally  accepted
accounting  principles,  practices and methods  consistently  applied.  Purchase
commitments for inventory are not in excess of normal  requirements and none are
at prices  materially in excess of current market prices.  Sales commitments for
inventory are all at prices in excess of prices used in valuing  inventory after
allowing for selling expenses and a normal profit margin.  Since the date of the
respective Base Balance Sheets, no inventory items have been sold or disposed of
except  through sales in the ordinary  course of business at prices no less than
prevailing market prices, and in no event less than cost.

2.12 Absence of Certain  Changes.  Except as disclosed in Schedule  2.12 hereto,
since the date of the respective Base Balance Sheets there has not been:

         (a)  any  change  in  the  financial  condition,   properties,  assets,
liabilities,  business or operations of Seller or any Subsidiary which change in
conjunction with all other such changes,  whether or not arising in the ordinary
course of business,  has been  materially  adverse with respect to Seller or any
Subsidiary ;

         (b) any  contingent  liability  incurred by Seller or any Subsidiary as
guarantor or otherwise with respect to the obligations of others;

         (c) any mortgage,  encumbrance  or lien placed on any of the properties
of Seller or any Subsidiary  which remains in existence on the date hereof or at
the time of Closing;

         (d) any  obligation or liability  incurred by Seller or any  Subsidiary
other than  obligations  and  liabilities  incurred  in the  ordinary  course of
business;

         (e) any purchase, sale or other disposition,  or any agreement or other
arrangement  for  the  purchase,  sale  or  other  disposition,  of  any  of the
properties  or assets of Seller or any  Subsidiary  other  than in the  ordinary
course of business;






         (f)  any  damage,  destruction  or  loss,  whether  or not  covered  by
insurance, materially and adversely affecting the properties, assets or business
of Seller and its Subsidiaries on a consolidated basis;

         (g) any  declaration,  setting  aside or payment of any dividend on, or
the making of any other  distribution in respect of, the capital stock of Seller
or any  Subsidiary  other  than a  wholly-owned  Subsidiary,  or any  direct  or
indirect redemption,  purchase or other acquisition by Seller of its own capital
stock or by any such Subsidiary of its own capital stock;

         (h) any labor  trouble  or claim of unfair  labor  practices  involving
Seller or any Subsidiary;  any change in the  compensation  payable or to become
payable  by Seller or any  Subsidiary  to any of their  officers,  employees  or
agents  other than  normal  merit  increases  in  accordance  with  their  usual
practices,  or any  bonus  payment  or  arrangement  made to or with any of such
officers, employees or agents;

         (i) any change with respect to the management or supervisory  personnel
of Seller or any Subsidiary;

         (j) any payment or discharge of a material  lien or liability of Seller
or any Subsidiary  except those (i) on any Base Balance Sheet,  or (ii) incurred
in the ordinary course of business thereafter; or

         (k) any obligation or liability incurred by Seller or any Subsidiary to
any of their  officers,  directors or shareholders or any loans or advances made
by Seller or any Subsidiary to any of their officers, directors or shareholders,
except transactions  between Seller and a Subsidiary and normal compensation and
expense allowances payable to officers.

2.13 Ordinary Course. Between the date of the respective Base Balance Sheets and
the date of this  Agreement,  Seller and its  Subsidiaries  have conducted their
respective  businesses only in the ordinary  course.  From the date hereof until
the  Closing,  Seller and its  Subsidiaries  have  continued  to  conduct  their
respective businesses only in the ordinary course.

2.14 Other  Stockholder  Businesses.  (a) Other than as  disclosed  in  Schedule
2.14(a) to this Agreement, none of the Stockholders has, directly or indirectly,
owned,  operated,  managed,  been  employed by or  consulted  with,  directly or
indirectly,  any retail seller of manufactured  homes, other than the Seller and
the Subsidiaries. Each corporation,  partnership or other business entity listed
on Schedule 2.14(a) is referred to individually as an "Unaffiliated  Stockholder
Company" and  collectively as the  "Unaffiliated  Stockholder  Companies".  Each
Unaffiliated  Stockholder  Company  listed on  Schedule  2.14(a) as being now or
previously  having  been in the  business  of retail  sales of new  manufactured
housing or insurance products in the manufactured  housing industry is hereafter
referred to as an "Unaffiliated Stockholder Retailer."

         (b) Attached as Schedule  2.14(b)  hereto are the  following  unaudited
financial  statements of each Unaffiliated  Stockholder  Retailer,  all of which
statements are complete and correct and fairly present the financial position of
each Unaffiliated  Stockholder  Retailer, on the date of such statements and the
results  of its  operations  on the  applicable  basis for the  periods  covered
thereby  and have  been  prepared  in  accordance  with the  generally  accepted
accounting  principles  consistently applied throughout the periods involved and
prior periods:

         The  most  recent  balance  sheets  of  the  Unaffiliated   Stockholder
Retailers included in the above financial statements are sometimes  collectively
referred to hereinafter as the "Unaffiliated  Stockholder Retailers Base Balance
Sheets".







         (c) Each Unaffiliated  Stockholder Company has filed all federal, state
and local  income,  excise or franchise  tax  returns,  real estate and personal
property tax returns,  sales and use tax returns and other tax returns  required
to be filed by it and has paid all taxes owing by it except taxes which have not
yet accrued or otherwise  become due for which adequate  provision has been made
in the pertinent financial statements referred to in this Section 2.14.

         As of the respective  dates of the Unaffiliated  Stockholder  Retailers
Base  Balance  Sheets,  no  Unaffiliated  Stockholder  Retailer had any material
liability of any nature,  whether  accrued,  absolute,  contingent  or otherwise
(including without limitation liabilities as guarantor or otherwise with respect
to  obligations of others,  or  liabilities  for taxes due or then accrued or to
become due), except (a) liabilities stated or adequately reserved against on the
respective   Unaffiliated   Stockholder   Retailers  Base  Balance  Sheets,  (b)
liabilities  not in excess of $5,000  individually  or $50,000 in the  aggregate
arising in the  ordinary  course of  business  since the date of the  respective
Unaffiliated  StockholderRetailers  Base  Balance  Sheets  and  (c)  liabilities
disclosed in Schedule 2.14(c);

         (d) Except as disclosed in Schedule  2.14(d) hereto,  since the date of
the respective  Unaffiliated  Stockholder  Retailer Base Balance Sheet there has
not been: any change in the liabilities of an Unaffiliated  Stockholder Retailer
which has been  materially  adverse with respect to such  Unaffiliated  Retailer
Company; any contingent liability incurred by any Unaffiliated  Retailer Company
as  guarantor  or  otherwise  with  respect to the  obligations  of others;  any
encumbrance  or  lien  placed  on any  properties  of an  Unaffiliated  Retailer
Company;  or any obligation or liability  incurred by an  Unaffiliated  Retailer
Company other than  obligations and liabilities  incurred in the ordinary course
of business;

         (e) Except for matters  described in Schedule 2.14(e) hereto,  there is
no  litigation  pending  or, to the  Knowledge  of  Seller,  any  Subsidiary  or
Stockholder,  threatened against any Unaffiliated Stockholder Company, and there
are no outstanding  court orders,  court decrees or court  stipulations to which
any Unaffiliated Stockholder Company is a party which would likely result in any
materially  adverse  change  in the  financial  condition  of  any  Unaffiliated
Stockholder  Company.  Neither Seller,  any Subsidiary,  nor any Stockholder has
reason to believe that any such action, suit, proceeding or investigation may be
brought against any Unaffiliated Stockholder Company.

         (f) None of this Agreement,  any exhibit thereto or certificate  issued
pursuant  hereto  contains any untrue  statement of a material fact, or omits to
state a material  fact  necessary to make the  statements  herein or therein not
misleading,  relating to the business or affairs of any Unaffiliated Stockholder
Company.  None of Seller,  any Subsidiary or any  Stockholder has made an untrue
statement of a material fact or omitted to state a material fact to Buyer or its
agents,  necessary to make the statements made not  misleading,  relating to the
business or affairs of any Unaffiliated Stockholder Company.

2.15     Trade Names, Trademarks and Copyrights.

         (a) All trade names,  registered  trademarks,  service marks, trademark
applications,  service mark  applications and copyrights owned by or licensed to
Seller or any  Subsidiary  are listed on Schedule 2.15 hereto and have been duly
registered in, filed in or issued by the United States Register of Copyrights or
the corresponding  offices of other countries  identified on said Schedule,  and
have been  properly  maintained  and renewed in accordance  with all  applicable
provisions of law and  administrative  regulations  in the United States and the
State of Alabama. Except as set forth in said Schedule, use of said trade names,
trademarks,  service




marks or  copyrights  does not require  the consent of any other  person and the
same are freely transferable (except as otherwise provided by law) and are owned
exclusively by Seller or a Subsidiary free and clear of any attachments,  liens,
encumbrances  or, to the best Knowledge of Seller and each  Subsidiary,  free of
any adverse claims.

         (b) Except as set forth in  Schedule  2.15,  to the best  Knowledge  of
Seller, each Subsidiary and each Stockholder:

                  (i) no other  person has an interest in or right or license to
use, or the right to license others to use, any of said trade names,  registered
trademarks, service marks or copyrights;

                  (ii)  there  are no  claims or  demands  of any  other  person
pertaining  thereto and no proceedings have been  instituted,  or are pending or
threatened,  which  challenge the rights of Seller or any  Subsidiary in respect
thereof;

                  (iii) none of the trade names,  trademarks,  service  marks or
copyrights  listed in said Schedule is being infringed by others,  or is subject
to any outstanding order, decree, judgment or stipulation; and

                  (iv) no  proceeding  charging  Seller or any  Subsidiary  with
infringement  of any  adversely  held trade  name,  trademark,  service  mark or
copyright has been filed or is threatened to be filed.

         (c)  To  the  best  Knowledge  of  Seller,   each  Subsidiary  and  the
Stockholders,  there are no trademarks,  service marks, trademark  applications,
service  mark  applications  or  copyrights,  other  than those  referred  to in
paragraph  (a)  required  for the  conduct  of the  business  of  Seller  or any
Subsidiary in the manner now conducted.  To the best  knowledge of Seller,  each
Subsidiary and each Stockholder, neither Seller nor any Subsidiary has infringed
or is infringing  upon any trade name,  trademark,  service mark or copyright of
any other person.  No director,  officer or employee of Seller or any Subsidiary
owns,  directly or indirectly,  in whole or in part, any trademark,  trade name,
service  mark,  copyright,  registration  or  application  therefor  or interest
therein which Seller or any Subsidiary has used, is presently  using, or the use
of which is necessary for their respective businesses as now conducted.

2.16 Trade Secrets and Customer Lists.  Seller and each Subsidiary has the right
to use,  free and clear of any  claims or rights  of  others,  except  claims or
rights described in Schedule 2.16 hereto, all trade secrets, customer lists, and
other information  required for or used in the sale or marketing of all products
formerly or presently sold by Seller or any  Subsidiary.  Neither Seller nor any
Subsidiary is using or in any way making use of any confidential  information or
trade secrets of any third party, including without limitation a former employer
of any present or past employee of Seller or any Subsidiary.

2.17     Contracts and Commitments.

         (a) Except for contracts,  commitments,  plans, agreements and licenses
described in Schedule 2.17 hereto,  neither Seller nor any Subsidiary is a party
to or subject to:

                  (i) any contract or agreement for the purchase of any material
or equipment, except purchase orders in the ordinary course for less than $2,500
each, such orders not exceeding in the aggregate $10,000;






                  (ii)  any  other   contracts   or   agreements   creating  any
obligations  of Seller or any Subsidiary  after the date of the respective  Base
Balance Sheets of $5,000 or more with respect to any such contract or agreement,
other than sales and purchase commitments in the ordinary course of business;

                  (iii) any contract or agreement  providing for the purchase of
all or  substantially  all of its  requirements  of a particular  product from a
supplier;

                  (iv) any  contract or  agreement  which by its terms or by law
does not  terminate  or is not  terminable  without  penalty  by  Seller or such
Subsidiary  or any  successor  or assign of them  within one year after the date
hereof;

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

                  (vi) any  contract  with any  sales  agent or  distributor  of
products of Seller or any Subsidiary;

                  (vii) any contract  containing  covenants limiting the freedom
of Seller or any  Subsidiary  to  compete  in any line of  business  or with any
person or entity;

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

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

                  (x) any  contract or agreement  with any officer,  director or
stockholder  of Seller or any  Subsidiary  or with any persons or  organizations
controlled by or affiliated with any of them.

         (b) Neither Seller nor any Subsidiary is in material  default under any
such contracts,  commitments,  plans,  agreements or licenses  described in said
Schedule  or has  Knowledge  of any  termination,  cancellation,  limitation  or
modification or change in any business  relationship  with any material supplier
or  customer.  For  purposes  hereof,  a supplier  or customer is material if it
accounts for more than two (2%) percent of the orders or sales,  as the case may
be, of Seller and its Subsidiaries on a consolidated basis.

2.18     Employees and Employee Benefits.

         (a) Except as shown on Schedule  2.18  hereto,  there are no  currently
effective consulting or employment  agreements or other material agreements with
individual  consultants  or  employees to which  Seller or any  Subsidiary  is a
party.  Complete and accurate  copies of all such written  agreements  have been
delivered to Buyer. Also shown on such Schedule are the name and current rate of
compensation (including bonuses) of each officer, employee or agent of Seller or
any Subsidiary  whose annual rate of compensation,  including  bonuses and other
remunerative payments of any kind, is in excess of $40,000.

         (b) Except as specifically  disclosed on Schedule 2.18 hereto,  neither
Seller nor any Subsidiary is a party to any pension, retirement, profit sharing,
savings,  bonus,  incentive,  deferred  compensation,  group health insurance or
group  life  insurance  plan  or  obligation,  or to any  collective  bargaining
agreement  or other  contract,  written or oral,  with any trade or labor union,
employees'  association  or  similar  organization.  With  respect  to each plan
described on the Schedule,  Seller has furnished to Buyer  complete and accurate
copies of the plan, the



Internal Revenue Service determination letter, if any, all plan applications and
amendments,  the most  recent  plan  actuarial  reports  and all  reports  of or
regarding such plan required by the Employee  Retirement  Income Security Act of
1974, as amended ("ERISA"), and any regulations issued thereunder.

         (c) With respect to each plan which is subject to ERISA:

                  (i) the value of such  plan's  assets  equals or  exceeds  the
total value of all vested and unvested employee benefits under such plan;

                  (ii)  there is no  "accumulated  funding  deficiency,"  and no
"reportable  event" or "prohibited  transaction" has occurred (as such terms are
defined in ERISA);

                  (iii) Seller and each Subsidiary, has incurred no liability to
the Pension Benefit Guaranty Corporation with respect to such plans;

                  (iv) such plan meets all applicable  requirements of ERISA and
Section 401(a) of the Internal Revenue Code; and

                  (v) Seller and each  Subsidiary,  has properly and timely made
all required governmental filings with respect to such plan.

         (d) There  are no  strikes  or labor  disputes  pending  or to the best
Knowledge of Seller and each Subsidiary, threatened by, or to the best Knowledge
of Seller and each Subsidiary, any attempts at union organization of, any of the
employees of Seller or any Subsidiary.

2.19     Reserved.

2.20  Permits;  Burdensome  Agreements.  Seller  and  each  Subsidiary  hold all
licenses,  permits and  franchises  which are required to permit them to conduct
their  businesses  and all such  licenses,  permits and franchises are listed in
Schedule  2.20  hereto and are and will be after the  Closing  valid and in full
force and effect  and Buyer  shall  have full  benefit of the same.  To the best
Knowledge of Seller and each  Subsidiary,  neither  Seller nor any Subsidiary is
subject  to or bound by any  agreement,  judgment,  decree  or order  which  may
materially and adversely affect business or prospects, its condition,  financial
or otherwise, or any of its assets or property.

2.21 Borrowings and Guarantees.  Except as shown on Schedule 2.21 hereto,  there
are no agreements and  undertakings  pursuant to which Seller or any Subsidiary,
(a) is  borrowing  or is  entitled  to borrow  any money (b) is  lending  or has
committed itself to lend any money, or (c) is a guarantor or surety with respect
to the  obligations  of any person.  Complete  and  accurate  copies of all such
written agreements have been delivered to Buyer.

2.22 Banking  Relations and Powers of Attorney.  All of the  arrangements  which
Seller or any  Subsidiary  has with any banking  institution,  whether or not in
Seller's or a  Subsidiary's  name,  are  accurately  described in Schedule  2.22
hereto  indicating  with  respect  to  each  of such  arrangements  the  type of
arrangement maintained (such as checking account,  borrowing arrangements,  safe
deposit  box,  etc.) and the person or persons  authorized  in respect  thereof.
Neither Seller nor any Subsidiary has any outstanding power of attorney.

2.23 Insurance. The physical properties and assets of Seller and each Subsidiary
are  insured to the  extent  disclosed  in  Schedule  2.23  hereto and all other
material  insurance  policies and arrangements of Seller and each






Subsidiary  are  disclosed  in said  Schedule.  Said  insurance  is adequate and
customary for the business engaged in by Seller and each Subsidiary.

2.24  Warranty or Other  Claims.  Except as disclosed  on Schedule  2.24 hereto,
neither Seller,  any Subsidiary nor any Stockholder  knows or has reason to know
of any existing or threatened  claims,  or any facts upon which a claim could be
based,  against Seller or any  Subsidiary for services or merchandise  which are
defective or fail to meet any service or product  warranties.  No claim has been
asserted   against  Seller  or  any  Subsidiary  for   renegotiation   or  price
redetermination of any business transaction,  and neither Seller, any Subsidiary
nor any  Stockholder  has knowledge of any facts upon which any such claim could
be based.

2.25 Compliance with Laws. To the best Knowledge of the Seller,  each Subsidiary
and the  Stockholders,  Seller and each Subsidiary are and have in the past been
in material  compliance with all laws and regulations which apply to the conduct
of their respective  businesses,  including,  without  limitation,  all laws and
regulations relating to employment,  occupational  safety,  consumer protection,
and environmental matters.

2.26 Litigation.  Except for matters described in Schedule 2.26 hereto, there is
no  litigation  pending or, to the  Knowledge of Seller,  any  Subsidiary or any
Stockholder,  threatened  against  Seller or any  Subsidiary  , and there are no
outstanding court orders,  court decrees,  or court stipulations to which Seller
or any  Subsidiary  is a party  which  question  this  Agreement  or affect  the
transactions contemplated hereby, or which would likely result in any materially
adverse change in the business, properties,  operations, prospects, assets or in
the  condition,  financial or otherwise,  of Seller or any  Subsidiary.  Neither
Seller any  Subsidiary,  nor any Stockholder has reason to believe that any such
action,  suit,  proceeding or investigation may be brought against Seller or any
Subsidiary.

2.27 Minute Books.  The minute books of Seller and each Subsidiary  delivered to
the Buyer accurately record all actions taken by their respective  shareholders,
boards of directors and committees thereof in their respective capacities.

2.28  Finder's Fee.  Neither  Seller nor any  Subsidiary  has incurred or become
liable for any broker's  commission or finder's fee relating to or in connection
with the transactions contemplated by this Agreement.

2.29 Transactions with Interested  Persons.  No officer,  supervisory  employee,
director or stockholder of Seller or any Subsidiary, or their respective spouses
or children,  owns directly or  indirectly on an individual or joint basis,  any
material  interest  in, or serves as an officer or  director  of, any  customer,
competitor or supplier of Seller or any Subsidiary,  or any  organization  which
has a material contract or arrangement with Seller or any Subsidiary.

2.30 Absence of Sensitive  Payments.  To the best Knowledge of the Seller,  each
Subsidiary and the Stockholders,  neither Seller nor any Subsidiary,  nor any of
their respective directors, officers, agents, stockholders or employees, whether
or not on behalf of Seller or any Subsidiary:

         (a) has made or has agreed to make any contributions, payments or gifts
of funds or  property  to any  governmental  official,  employee  or agent where
either the payment or the purpose of such  contribution,  payment or gift was or
is illegal under the laws of the United States, any state thereof,  or any other
jurisdiction (foreign or domestic);







         (b) has  established or maintained any unrecorded fund or asset for any
purpose,  or has made any  false or  artificial  entries  on any of its books or
records for any reason; or

         (c) has made or has agreed to make any contribution or expenditure,  or
has  reimbursed any political gift or  contribution  or expenditure  made by any
other person to candidates for public office,  whether  federal,  state or local
(foreign or domestic) where such  contributions  were or would be a violation of
applicable law.

2.31 Disclosure of Material Information.  Neither this Agreement nor any exhibit
thereto or certificate issued pursuant hereto contains any untrue statement of a
material  fact,  or  omits  to  state a  material  fact  necessary  to make  the
statements herein or therein not misleading, relating to the business or affairs
of Seller or any Subsidiary. Neither Seller, any Subsidiary, nor any Stockholder
has made an untrue  statement of a material  fact or omitted to state a material
fact  to  Buyer  or its  agents,  necessary  to make  the  statements  made  not
misleading, relating to the business or affairs of the Seller or any Subsidiary.
There is no fact which could materially adversely affect the business, condition
(financial or otherwise) or prospects of Seller or any Subsidiary  which has not
been set forth herein.

ARTICLE 3.  REPRESENTATIONS AND WARRANTIES OF BUYER.

Buyer hereby represents and warrants to Seller, the Subsidiaries and each of the
Stockholders as follows:

3.1 Organization of Buyer.  Each of Buyer and Acquisition Corp. is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Delaware  and Buyer is qualified to do business in the State of Alabama
with full  corporate  power to own or lease its  properties  and to conduct  its
business  in the  manner and in the places  where such  properties  are owned or
leased or such business is conducted by it.

3.2  Capitalization of Buyer. The authorized  capital stock of Buyer consists of
20,000,000 shares of Voting Common Stock,  $.0001 par value, of which 15,104,987
shares were issued and outstanding as of November 20, 1996, and 1,000,000 shares
of Non-Voting  Preferred Stock,  $.0001 par value, of which no shares are issued
and outstanding.  The authorized capital stock of Acquisition Corp.  consists of
3,000  shares of Common  Stock,  $.01 par  value,  of which 100 are  issued  and
outstanding on this date, and no shares of Preferred Stock. All of the presently
issued and outstanding  capital stock of Buyer and  Acquisition  Corp. have been
duly authorized and validly issued and are fully paid and non-assessable.

3.3 Authorization of Transaction.  All necessary action, corporate or otherwise,
has been  taken by Buyer and  Acquisition  Corp.  to  authorize  the  execution,
delivery  and  performance  of this  Agreement,  and the same is the  valid  and
binding obligation of Buyer enforceable in accordance with its terms, subject to
laws of general application affecting creditor's rights generally.

3.4 Buyer's Common Stock.  The Purchase Shares to be delivered  pursuant to this
Agreement and the  Certificate  of Merger will be, when  delivered in accordance
herewith  and  therewith,  duly  authorized,  validly  issued,  fully  paid  and
non-assessable.






ARTICLE 4.  COVENANTS OF SELLER AND STOCKHOLDERS.

Each of the Seller,  the Subsidiaries and the Stockholders  hereby covenants and
agrees with Buyer as follows:

4.1 Conduct of  Business.  Between the date of this  Agreement  and the Closing,
Seller and each Subsidiary shall do the following,  unless Buyer shall otherwise
consent in writing:

         (a) conduct its business  only in the ordinary  course and refrain from
changing or  introducing  any method of management  or operations  except in the
ordinary course of business and consistent with prior practices;

         (b) refrain from making any purchase,  sale or disposition of any asset
or property other than in the ordinary  course of business,  from purchasing any
capital  asset  costing  more  than  $10,000  and  from  mortgaging,   pledging,
subjecting to a lien or otherwise encumbering any of its properties or assets;

         (c) refrain from incurring any  contingent  liability as a guarantor or
otherwise  with respect to the  obligations  of others,  and from  incurring any
other contingent or fixed obligations or liabilities except those that are usual
and normal in the ordinary course of business;

         (d) refrain from making any change or incurring any  obligation to make
a change in its Charter or by-laws or authorized or issued capital stock, except
as contemplated by this Agreement;

         (e) refrain  from  declaring,  setting  aside or paying any dividend or
making any other  distribution  in respect of their capital stock, or making any
direct or indirect  redemption,  purchase or other acquisition of capital stock,
of Seller or any Subsidiary other than a wholly-owned Subsidiary;

         (f) refrain from entering into any employment  contract  (other than as
may be contemplated by this Agreement) or making any change in the  compensation
payable or to become payable to any of its officers, employees or agents;

         (g) refrain from prepaying any loans from its stockholders, officers or
directors (if any) or making any change in its borrowing arrangements;

         (h) use its good faith  efforts to prevent any change  with  respect to
its banking arrangements;

         (i)  use  its  good  faith   efforts  to  keep   intact  its   business
organization,  to keep available its present officers,  agents and employees and
to preserve the goodwill of all suppliers,  customers and others having business
relations with it;

         (j) have in effect and maintain at all times all insurance of the kind,
in the amount  and with the  insurers  set forth in the  Schedule  of  Insurance
heretofore  delivered  to  Buyer or  equivalent  insurance  with any  substitute
insurers approved by Buyer; and

4.2 Authorization from Others. Prior to the Closing,  Seller will have exercised
good faith  efforts to obtain and will cause its  Subsidiaries  to have obtained
all  authorizations,  consents  and  permits  of others  required  to permit the
consummation by Seller and its Subsidiaries of the transactions  contemplated by
this Agreement.








4.3 Breach of Representations  and Warranties.  Promptly upon the occurrence of,
or  promptly  upon  Seller's  becoming  aware  of the  impending  or  threatened
occurrence of, any event which would cause or constitute a breach, or would have
caused or  constituted a breach had such event  occurred or been known to Seller
or any Subsidiary prior to the date hereof,  of any of the  representations  and
warranties of Seller contained in or referred to in this Agreement, Seller shall
give  detailed  written  notice  thereof  to Buyer and shall use its good  faith
efforts to prevent or promptly remedy the same.

4.4  Consummation of Agreement.  Seller,  each  Subsidiary and each  Stockholder
shall use its or their best  efforts to perform and fulfill all  conditions  and
obligations  on its or their  part to be  performed  and  fulfilled  under  this
Agreement  and  the  Merger   Agreement,   to  the  end  that  the  transactions
contemplated  by this Agreement and the Merger  Agreement shall be fully carried
out. To this end Seller and each Subsidiary will obtain all necessary  approvals
of its  stockholders  and Board of  Directors to the  transactions  contemplated
hereby.

4.5  Buyer's  Due  Diligence.  It  is  understood  that  Buyer's  due  diligence
investigation of the Seller and the Subsidiaries may include, but not be limited
to, review of financial statements,  contracts and leases, assets,  liabilities,
products,  inventory,  methods of  accounting,  and financial and other business
records of the Seller  and the  Subsidiaries,  investigation  of  customers  and
suppliers,  and inspection and an examination of the retail  facilities owned or
leased  by  the  Subsidiaries,  including  an  environmental  assessment  of the
properties.  The Seller,  each  Subsidiary and each  Stockholder  shall make all
relevant  information  concerning  the Seller and each  Subsidiary ,  including,
without  limitation,  the foregoing,  reasonably  available to the Buyer and its
agents,  and  will  provide  Buyer  and  its  agents  reasonable  access  to the
Subsidiaries'  premises  and  officers.  Buyer  shall  coordinate  closely  such
activities with the  Stockholders and their counsel and disclose such activities
to the Stockholders and their counsel,  and shall conduct all such inquires with
appropriate  discretion and sensitivity to the Subsidiaries'  relationships with
their employees, customers, and suppliers.

4.6 Financial Statements of Seller and Subsidiaries. It is necessary for Buyer's
independent public accountants to prepare and audit the financial  statements of
the Seller and the Subsidiaries  with respect to the last three fiscal years and
any interim  period.  The Seller and the  Subsidiaries  shall cooperate with the
Buyer's  independent  public  accountants in connection with the preparation and
audit of such financial  statements,  including,  without limitation,  providing
such  financial and other  information  and making such  certifications  to such
independent  public accounts as such  accountants  deem reasonably  necessary in
connection with the preparation and audit of such financial statements.

4.7 Expansion of Subsidiaries' Business. Buyer and Seller acknowledge that it is
the  intention  of the parties to expand the business of the  Subsidiaries  into
Northern and Central Alabama, as well as Mississippi. In order to implement such
expansion, Seller shall submit a detailed business plan to Buyer with respect to
such  expansion  for  consideration  and approval by Buyer's Board of Directors.
Buyer  reserves  the  right to make the  final  decision  with  respect  to such
expansion;  provided,  however,  that Buyer shall not unreasonably  withhold its
approval of any such expansion plan.









ARTICLE 5.  COVENANTS OF BUYER.

Buyer hereby  covenants and agrees with Seller and each of the  Stockholders  as
follows:

5.1 Authorization from Others. Prior to the Closing Buyer will have obtained all
authorizations,   consents  and  permits  of  others   required  to  permit  the
consummation by Buyer and Acquisition Corp. of the transactions  contemplated by
this Agreement.

5.2  Consummation of Agreement.  The Buyer shall use its best efforts to perform
and  fulfill all  conditions  and  obligations  on its part to be  performed  or
fulfilled under this Agreement, to the end that the transactions contemplated by
this Agreement and the Merger Agreement shall be fully carried out. To this end,
Buyer will obtain any approvals of its  stockholders or Board of Directors which
may be required in order to consummate the transactions contemplated hereby. The
Buyer shall use all reasonable  efforts to give the Seller and the  Stockholders
notice prior to the Closing of any material  facts of which the Buyer has actual
Knowledge  which  represent or  constitute  a material  breach or default by the
Seller,  any  Subsidiary  or any  Stockholder  or any  Unaffiliated  Stockholder
Company under this  Agreement,  whether or not such breach or default would give
rise to a claim for indemnification under Article 10 hereof. The Buyer's failure
to give any such  notice  shall not,  however,  in any way limit,  constitute  a
defense to, or otherwise  adversely affect,  the right of the Buyer or any Buyer
Indemnified  Party (as  defined in Section  10.1) to such  indemnification  with
respect  to any  matter  or claim in  accordance  with the terms of  Article  10
hereof.

5.3 Dealer Volume  Incentive  Program.  For a period beginning as of the date of
the  Closing  and  ending  December  31,  1998,   Buyer  shall  provide  to  the
Subsidiaries  Dealer Volume Incentive Program terms in accordance with Exhibit C
hereto.

5.4 Conduct of Business of  Subsidiaries.  Following  the  Closing,  Buyer shall
endeavor  to cause the  Subsidiaries  to  maintain  a  reasonably  varied mix of
products, unless Buyer determines, in the good faith exercise of its discretion,
that  market   conditions  are  such  that  altering  the  product  mix  of  the
Subsidiaries would be more advantageous commercially.

         Immediately  following the Closing,  the Buyer shall use all reasonable
commercial  efforts to obtain  the  release of the  personal  guaranties  of the
Stockholders for those debts of the Subsidiaries  listed on Schedule 5.4 hereof.
The Buyer  shall also  indemnify  and hold the  Stockholders  harmless  from and
against any  damages,  liabilities,  losses and expenses  (including  reasonable
counsel  fees)  of any kind or  nature  whatsoever  which  may be  sustained  or
suffered  by a  Stockholder  with  respect to those  debts in the amounts not to
exceed the amounts specified in Schedule 5.4 hereof.


ARTICLE 6.  CONDITIONS TO OBLIGATIONS OF BUYER.

The  obligations  of Buyer to consummate  this  Agreement  and the  transactions
contemplated  hereby are subject to the condition  that on or before the Closing
the actions required by this Article 6 will have been accomplished.

6.1 Shareholder Authorization. This Agreement, the Certificate of Merger and the
transactions   contemplated   hereby  shall  have  been  duly  approved  by  the
affirmative  vote of the  requisite  percentage  of the  outstanding  shares  of
Seller's voting stock under the laws of Seller's jurisdiction of incorporation.








6.2 Dissenting  Stockholders.  Holders of not more than 10% of the shares of the
Common  Stock of  Seller  shall  have  taken  steps to  preserve  the  rights of
dissenting  stockholders  afforded by the laws of the state of  incorporation of
Seller,  and Seller shall have delivered to Buyer a true and correct list of the
names,  addresses and numbers of shares held by each holder of dissenting shares
of Seller and the steps  taken by each such  holder as  required  by the laws of
Seller's jurisdiction of incorporation governing appraisal rights.

6.3  Representations;  Warranties;  Covenants.  Each of the  representations and
warranties of Seller, the Subsidiaries and the Stockholders contained in Article
2 shall be true and  correct as though  made on and as of the  Closing;  Seller,
each  Subsidiary  and the  Stockholders  shall,  on or before the Closing,  have
performed  all of their  respective  obligations  hereunder  which by the  terms
hereof are to be performed on or before the Closing; and Seller, each Subsidiary
and the Stockholders shall have delivered to Buyer a certificate dated as of the
Closing to the foregoing  effect and further  confirming that the conditions set
forth in Section 6.1 with respect to  shareholder  authorization  and in Section
6.2 with respect to dissenting shares of Seller have been fulfilled.

6.4  Resignations  of Officers  and  Directors.  Buyer shall have  received  the
written  resignations  of such of the officers  and  directors of Seller and the
Subsidiaries  as Buyer shall have  designated  in a writing  delivered to Seller
prior to the  Closing,  which  resignations  will be effective no later than the
Closing.

6.5      Opinion of Seller's Counsel.

         (a) At the Closing,  Buyer shall have  received  from Messrs.  Hubbard,
Smith,  McIlwain,  Brakefield & Shattuck,  P.C.  counsel for Seller,  an opinion
dated as of the Closing,  in form and  substance  satisfactory  to Buyer and its
counsel.

6.6 Securities Law Compliance.  The  obligations  and conditions  required to be
satisfied  prior to Closing under Article 11 of this  Agreement  shall have been
satisfied  and  Buyer's  counsel,  Brown,  Rudnick,  Freed & Gesmer,  shall have
determined  that the  issuance of the  Purchase  Shares in  connection  with the
transaction  will not violate the  Securities  Act of 1933, or state  securities
laws, as more fully detailed in Article 11.

6.7  Employment/Non-Competition  Contracts.  Each of W.  Thomas  Deas,  James M.
Moore,  III and  Gregory C. Vogel shall have  executed  and  delivered  to Buyer
employment contracts  substantially in the form of Exhibit D hereto. Each of the
Stockholders  shall  have  executed  and  delivered  to  Buyer   non-competition
agreements substantially in the form of Exhibit E hereto.

6.8 RESERVED.

6.9  Approval  of  Buyer's  Board  of  Directors.   There  shall  have  been  no
determination by the Board of Directors of Buyer, acting in good faith, that the
consummation of the  transactions  contemplated by this Agreement and the Merger
Agreement have become  inadvisable or impracticable by reason of the institution
or overt  threat  by any  person  or any  federal,  state or other  governmental
authority of material  litigation,  proceedings  or other action  against Buyer,
Seller  Subsidiary , or by reason of any material  adverse change in the assets,
business, financial condition or prospects of the Seller or the Subsidiaries.

6.10 Approval of Buyer's  Advisors.  All actions,  proceedings,  instruments and
documents required to carry out this Agreement and the Certificate of Merger and
all related legal matters  contemplated by this Agreement and the Certificate of
Merger shall have been approved by counsel for Buyer, provided that the approval
of such counsel shall not be  unreasonably  withheld.  In addition,  Buyer shall
have received in form and  substance







reasonably  satisfactory  to it, and shall  forward two  complete  copies of all
reports and opinions to the Stockholders and their counsel upon receipt, reports
and  opinions  on such  financial  and  legal  matters  in  connection  with the
transaction as it deems pertinent, including, without limitation, a satisfactory
report from Arthur Andersen LLP,  independent public accountants,  regarding the
financial statements of the Seller and the Subsidiaries and the Companies.

6.11  Absence  of Certain  Litigation.  There  shall not be any (a)  injunction,
restraining  order or order  of any  nature  issued  by any  court of  competent
jurisdiction  which  directs  that this  Agreement,  the Merger or any  material
transaction contemplated hereby shall not be consummated as herein provided, (b)
suit, action or other proceeding by the United States (or any agency thereof) or
by any state (or any agency  thereof)  pending before any court or  governmental
agency,  or threatened to be filed or initiated,  wherein such complainant seeks
the restraint or prohibition of the Merger or the  consummation  of any material
transaction contemplated by this Agreement or asserts the illegality thereof, or
(c) suit, action or other proceeding by a private party pending before any court
or governmental  agency,  or threatened to be filed or initiated,  which, in the
reasonable opinion of counsel for Buyer, is likely to result in the restraint or
prohibition of the consummation of any material transaction  contemplated hereby
or is  likely  to  result  in the  entry  of a  judgment  and  the  payment  (or
indemnification)  of material  damages from or other material relief against any
of the parties or against any directors or officers of Buyer, in connection with
the consummation of any material transaction contemplated hereby.

6.12 Buyer's Due Diligence.  The results of Buyer's due diligence  investigation
with respect to the Seller and the  Subsidiaries  shall be satisfactory to Buyer
in its sole  discretion.  Execution of this Agreement by Buyer will  acknowledge
Buyer's receipt of all information  requested of Seller and the  Subsidiaries in
conducting Buyer's due diligence investigation.

ARTICLE 7.  CONDITIONS TO OBLIGATIONS OF SELLER AND STOCKHOLDERS.

The obligations of Seller,  the  Subsidiaries and the Stockholders to consummate
this  Agreement  and the  transactions  contemplated  hereby are  subject to the
condition  that on or before the Closing the actions  required by this Article 7
will have been accomplished.

7.1 Shareholder Authorization. This Agreement, the Certificate of Merger and the
transactions   contemplated   hereby  shall  have  been  duly  approved  by  the
affirmative  vote of the  requisite  percentage  of the  outstanding  shares  of
Acquisition Corp.'s Common Stock.

7.2  Representations;  Warranties;  Covenants.  Each of the  representations and
warranties  of Buyer  contained in Article 3 shall be true and correct as though
made on and as of the  Closing;  Buyer  shall,  on or before the  Closing,  have
performed all of its  obligations  hereunder which by the terms hereof are to be
performed on or before the Closing;  and Buyer shall have  delivered to Seller a
certificate  of the  President  or any Vice  President  of Buyer dated as of the
Closing to such effect.

7.3 Opinion of Buyer's Counsel. At the Closing,  Seller shall have received from
Brown,  Rudnick,  Freed & Gesmer,  counsel for Buyer, an opinion dated as of the
Closing,  in form  and  substance  reasonably  satisfactory  to  Seller  and its
counsel.








7.4 Real Estate Development  Agreement.  Buyer shall have executed and delivered
to an entity to be formed by W. David  Deas,  James  Miller  Deas and W.  Thomas
Deas, Jr., a Real Estate Development Agreement in the form of Exhibit G hereto.

7.5 Securities Law Compliance.  The  obligations  and conditions  required to be
satisfied  prior to Closing under Article 11 of this  Agreement  shall have been
satisfied  and  Buyer's  counsel,  Brown,  Rudnick,  Freed & Gesmer,  shall have
determined  that the  issuance of the  Purchase  Shares in  connection  with the
transaction  will not violate the  Securities  Act of 1933, or state  securities
laws, as more fully detailed in Article 11.

ARTICLE 8.  TERMINATION OF AGREEMENT.

8.1  Termination.  At any  time  prior to the  Closing,  this  Agreement  may be
terminated  (a) by mutual  consent of the  parties  with the  approval  of their
respective Board of Directors,  notwithstanding prior approval of this Agreement
by the  stockholders  of any  party,  (b) by  either  party if there  has been a
material  misrepresentation,  breach of  warranty  or breach of  covenant by the
other party in its  representations,  warranties and covenants set forth herein,
(c) by Buyer if the conditions stated in Article 6 have not been satisfied at or
prior to the Closing or (d) by Seller if the conditions stated in Article 7 have
not been satisfied at or prior to the Closing.

8.2  Effect of  Termination.  If this  Agreement  shall be  terminated  as above
provided,  all  obligations of the parties  hereunder  shall  terminate  without
liability of either party to the other.  In the event that this  Agreement is so
terminated,  each party will return all papers, documents,  financial statements
and other data  furnished  to it by or with  respect to each other party to such
other party (including any copies thereof made by the first party).

8.3  Right  to   Proceed.   Anything   in  this   Agreement   to  the   contrary
notwithstanding, if any of the conditions specified in Article 6 hereof have not
been  satisfied,  Buyer  shall have the right to proceed  with the  transactions
contemplated  hereby  without  waiving its rights  hereunder,  and if any of the
conditions  specified in Article 7 hereof have not been satisfied,  Seller shall
have the right to proceed  with the  transactions  contemplated  hereby  without
waiving its rights hereunder.

ARTICLE 9.  RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.

9.1  Survival  of  Warranties.  All  representations,   warranties,  agreements,
covenants and  obligations  herein or in any schedule,  certificate or financial
statement  delivered  by  either  party  to  the  other  party  incident  to the
transactions  contemplated  hereby  are  material,  shall be deemed to have been
relied upon by the other  party and,  subject to the  limitations  of Article 10
below,  shall survive the Closing  regardless of any investigation and shall not
merge in the performance of any obligation by either party hereto.

ARTICLE 10.  INDEMNIFICATION.

10.1  Indemnification  by  Stockholders.  Each of the  Stockholders  jointly and
severally (together,  the "Seller  Indemnifying  Party") agrees,  subject to the
provision set forth in  subparagraphs  10.1 (a), (b), and (c) and (d) below,  to
defend, indemnify and hold Buyer, its officers,  directors,  employees,  agents,
subsidiaries and affiliates  (together,  the "Buyer Indemnified Party") harmless
from and  against  any  damages,  liabilities,  losses and  expenses  (including
reasonable counsel fees) of any kind or nature whatsoever which may be sustained
or  suffered  by  a  Buyer   Indemnified  Party  based  upon  a  breach  of  any
representation,  warranty or covenant made by any Seller  Indemnifying  Party in
this Agreement or in any exhibit,  certificate or financial  statement delivered
hereunder,  or by  reason  of  any  claim,  action  or  proceeding  asserted  or
instituted  arising  out of or related  to any








matter  or thing  covered  by such  representations,  warranties  or  covenants,
including without limitation amounts which a Buyer Indemnified Party has paid or
which  are  payable  with  respect  to tax  liabilities  of Seller or any of the
Subsidiaries  or any of the Companies for periods prior to the Closing and other
liabilities  of  Seller  or any of the  Subsidiaries  not  disclosed  to a Buyer
Indemnified  Party or  existing  in breach of the  Seller  Indemnifying  Party's
warranties or covenants hereunder; provided, however, that:

         (a)  indemnification  shall be payable by a Seller  Indemnifying  Party
only  if and to  the  extent  that  the  aggregate  amount  of  all  claims  for
indemnification  by the Buyer  Indemnified Party hereunder shall exceed $50,000;
provided,  however,  that the foregoing  deductible  shall not be applied to (i)
claims  arising  out of or  relating  to a  breach  of the  representations  and
warranties  contained in Section 2.8 of this Agreement (relating to tax matters)
and (ii) claims  arising  out of or relating to a breach of the  representations
and warranties contained in Section 2.2 of this Agreement (relating to ownership
of the Stock of the Subsidiaries).

         (b) no indemnification shall be payable with respect to claims asserted
by a Buyer  Indemnified  Party more than two years after the Closing,  provided,
however,  that (i) with respect to claims arising out of or relating to a breach
of the representations and warranties contained in Section 2.8 of this Agreement
(relating  to tax  matters),  indemnification  shall  be  payable  to the  Buyer
Indemnified  Party,  provided notice is given by the Buyer  Indemnified Party to
the  Seller   Indemnifying  Party  within  the  statute  of  limitations  period
applicable to the tax matter at issue,  and (ii) with respect to claims  arising
out of a relating to a breach of the representations and warranties contained in
Section 2.2 of this Agreement (relating to ownership of the capital stock of the
Subsidiaries),  there shall be no time  limitation  within  which notice must be
given to the Seller  Indemnifying  Party other than any  statutes of  limitation
generally  applicable to contracts which would be generally applicable under the
laws of the State of Delware; and,

         (c)  Buyer  Indemnified  Party  does  hereby  waive  any  right to seek
punitive  damages  against  any  Seller  Indemnifying  Party  (and any  officer,
director, employee, agent or affiliate of such Seller Indemnified Party), except
with  respect to claims  involving  fraud or  criminal  conduct on the part of a
Seller Indemnifying Party.

10.2  Indemnification by Buyer. Buyer (the "Buyer Indemnifying Party") agrees to
defend,  indemnify and hold the Stockholders  (the "Seller  Indemnified  Party")
harmless  from  and  against  any  damages,  liabilities,  losses  and  expenses
(including  reasonable  counsel fees) of any kind or nature whatsoever which may
be   sustained  or  suffered  by  any  of  them  based  upon  a  breach  of  any
representation,  warranty or covenant  made by the Buyer  Indemnifying  Party in
this Agreement or in any exhibit,  certificate or financial  statement delivered
hereunder,  or by  reason  of  any  claim,  action  or  proceeding  asserted  or
instituted  growing out of any matter or thing covered by such  representations,
warranties or covenants, provided, however, that:

         (a)  indemnification  shall be payable by the Buyer  Indemnifying Party
only  if and to  the  extent  that  the  aggregate  amount  of  all  claims  for
indemnification by the Seller Indemnified Party hereunder shall exceed $50,000;

         (b) no indemnification shall be payable to the Seller Indemnified Party
more than two years after the Closing;  provided  however,  that with respect to
claims arising out of or relating to Buyer's obligation to obtain release of the
personal  guaranties of the  Stockholders in accordance with Section 5.4 of this
Agreement,  indemnification  shall be payable to the Seller  Indemnified  Party,
provided notice is given by Seller  Indemnified  Party to the Buyer







Indemnified Party within the statute of limitations for contracts which would be
generally applicable under the laws of the State of Delaware; and,

         (c) the Seller  Indemnified  Party does hereby  waive any right to seek
punitive damages against any Buyer  Indemnifying  Party,  except with respect to
claims  involving  fraud or criminal  conduct on the part of Buyer  Indemnifying
Party.

10.3 Notice;  Defense of Claims.  An Indemnified Party shall give prompt written
notice to the  Indemnifying  Party of each claim for  indemnification  hereunder
after receipt of notice or Knowledge  thereof,  specifying the amount and nature
of  the  claim,  and  of  any  matter  which  is  likely  to  give  rise  to  an
indemnification   claim.  Each  Indemnifying  Party  shall  have  the  right  to
participate  at its  own  expense  in the  defense  of any  such  matter  or its
settlement.  If, in the opinion of Buyer, its financial condition or business or
the  financial  condition  or business of Seller  acquired by Buyer would not be
impaired thereby,  Buyer may authorize a Seller  Indemnifying Party to take over
the defense of such  matter so long as such  defense is  expeditious.  Except as
provided  herein,  failure to give notice of a matter  which may give rise to an
indemnification  claim  shall not affect the rights of an  Indemnified  Party to
collect such claim from an Indemnifying Party.

10.4  Payment of Claims;  Arbitration.  Indemnification  claims shall be paid or
otherwise  satisfied  by the  Indemnifying  Party  within 30 days  after  notice
thereof is given by the Indemnified Party,  unless within said 30-day period the
Indemnifying  Party indicates in a writing  delivered to the  Indemnified  Party
that it disputes the nature or amount of the claim,  in which event the dispute,
upon the  election  of any party  hereto  after  said  30-day  period,  shall be
referred to the American Arbitration Association to be settled by arbitration in
Birmingham,  Alabama in accordance with the then current commercial  arbitration
rules  of  said  Association,  and  judgment  upon  the  award  rendered  by the
Arbitrator  may be  entered in any court  having  jurisdiction  thereof.  Unless
otherwise determined by the arbitrator,  the fees and expenses of the arbitrator
shall be borne 50% by the Buyer and 50% by the Seller Indemnifying Party.






ARTICLE 11.  COMPLIANCE WITH SECURITIES LAWS.

11.1     Delivery of Information.

         (a) At or prior to the Closing,  Buyer shall have  delivered to each of
the  Stockholders  a  set  of  documents  (the  "Buyer  Disclosure   Documents")
consisting  of an  explanatory  letter  and a copy  of  each  of  the  following
documents:

                  (i)      Buyer's  Annual  Report on Form  10-K for the  fiscal
                           year ended December 29, 1995 (without exhibits);

                  (ii)     Buyer's Annual Report to Stockholders  for the fiscal
                           year ended December 29, 1995;

                  (iii)    Buyer's  definitive  Proxy  Statement dated April 21,
                           1996

                  (iv)     Buyer's  Quarterly  Reports  on  Form  10-Q  for  the
                           quarters  ended  March 29, and June 28 and  September
                           27, 1996; and

                  (v)      any report or document  delivered to the stockholders
                           pursuant to subparagraph (c) below.

         (b) Buyer  represents  and warrants  that Buyer  Disclosure  Documents,
taken as a whole, do not include any untrue statement of a material fact or omit
to state any material  fact  required to be stated  therein or necessary to make
the  statements  therein,  in light of the  circumstances  under which they were
made, not misleading.

         (c)  Buyer  shall  deliver  to each of the  Stockholders,  prior to the
Closing,  a copy of each  report or other  document  filed by Buyer  pursuant to
Section  13(a) or 15(d) of the  Securities  Exchange  Act of 1934,  as  amended,
between the date hereof and the date of Closing.

         (d) At or prior to the Closing,  Seller shall have delivered to each of
the Stockholders such information  concerning the Seller, if any, as is required
in the  opinion  of  counsel  for  Buyer in order  for the offer and sale of the
Purchase Shares to qualify for exemption from registration  under the Securities
Act of 1933, as amended (the "1933 Act")  pursuant to Regulation D thereunder or
such  other  exemption  as  counsel  for Buyer may  determine  to be  applicable
("Seller Disclosure Documents").

11.2 Acknowledgment of Receipt of Information.  At or prior to the Closing, each
Stockholder shall have delivered to Buyer an investment letter, substantially in
the form of Exhibit G, stating:

         (a) that he has received and  carefully  reviewed the Buyer  Disclosure
Documents and any Seller Disclosure Documents;

         (b) that he has had the  opportunity  to ask  questions of, and receive
answers  from,  Buyer and Seller and their  officers and others  acting on their
behalf concerning the matters covered by the Buyer Disclosure  Documents and any
Seller Disclosure Documents and the business, operations and financial condition
of Buyer and Seller;






         (c) that he has obtained all information which he or his representative
deem necessary or  appropriate to enable him to evaluate fully the  transactions
contemplated by this Agreement;

         (d) that he has such knowledge and experience in financial and business
matters that he is capable of  evaluating  the merits and risks of an investment
in Buyer's Common Stock pursuant to this Agreement; and

         (e) that he is taking the  Purchase  Shares for  investment,  that such
Purchase Shares are restricted securities,  and that he will not dispose of such
Purchase Shares except as provided therein.

11.3 RESERVED

11.4 Compliance with  Securities  Laws.  Counsel for Buyer shall have determined
that the issuance of the Purchase Shares to the  Stockholders in connection with
the transaction:

         (a) will be exempt from  registration  under the Securities Act of 1933
(the  "1933  Act") by  reason  of being a  transaction  not  involving  a public
offering; and

         (b) will be exempt  from  registration  or  qualification  (other  than
simple notice) under the securities or "blue-sky" laws of every  jurisdiction in
the United  States in which any  Stockholder  has an  address on the  records of
Seller on the record date used to determine the Seller's  stockholders  entitled
to vote on the transaction.

11.5  Reports.  Since January 1, 1993,  or the date of  organization,  if later,
Buyer  has  filed all  reports  and  statements,  together  with any  amendments
required to be made with respect thereto,  that it was required to file with (i)
the SEC,  including,  but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and
proxy statements and any applicable state securities or banking authorities.

11.6  Statements,  True and Correct.  No statement,  certificate,  instrument or
other writing  furnished or to be furnished by Seller to Buyer  pursuant to this
Agreement  or any other  document,  agreement or  instrument  referred to herein
contains or will contain any untrue  statement of material  fact or will omit to
state a material fact necessary to make the statements  therein, in light of the
circumstances  under which they were made,  not  misleading.  Any documents that
Buyer is required to file with any regulatory  authority in connection  with the
transactions  provided  for  herein  will  comply  as to form  and all  material
respects with the provisions of applicable Law.

11.7 Covenants of Buyer.  From the date of this Agreement,  until the earlier of
the effective time, or the  termination of this  Agreement,  Buyer covenants and
agrees  and  that it will  not do or agree or  commit  to do,  any of  following
without prior written consent of the Chief Executive Officer, President or Chief
Financial Officer of Seller, which consent shall not be unreasonably withheld:

         (a) Fail to file  timely  any  report  required  to be filed by it with
Regulatory Authorities including the SEC; or

         (b) Take any action that would cause the Buyer Common Stock to cease to
be traded on the NASDAQ.






ARTICLE 12.  REGISTRATION.

12.1     Required Registration.

         (a) Fixed Payment and Stub Period  Payment  Shares.  If at any one time
during the period  beginning one hundred eighty (180) days following the Closing
and ending on the second  anniversary  of the Closing,  Buyer receives a written
request from one or more of the  Stockholders  who received Fixed Payment Shares
and Stub Period Payment Shares, in connection with this  transaction,  to file a
registration statement under the 1933 Act for a public offering of not less than
50% of the aggregate Fixed Payment Shares and Stub Period Payment Shares,  Buyer
will promptly use its reasonable efforts to cause a registration statement to be
filed with the Securities and Exchange  Commission with respect to the number of
such shares  specified in the request,  and will use its  reasonable  efforts to
cause such registration  statement to become effective under the 1933 Act. Buyer
shall prepare and file with the Securities and Exchange  Commission,  as soon as
reasonably  practicable,  any necessary amendments to the Registration Statement
or supplements to the prospectus  included therein.  Buyer shall not be required
to cause more than one  registration  statement  to be filed with respect to any
Fixed Payment  Shares and Stub Period  Payment  Shares  pursuant to this Section
12.1.

         (b) 1997  Contingent  Payment  Shares.  If at any one time  during  the
period  beginning  one hundred  eighty (180) days  following the issuance of the
Contingent  Payment Shares,  with respect to the twelve (12) month period ending
December  31, 1997 (the "1997  Contingent  Payment  Shares"),  and ending on the
second  anniversary of such issuance,  Buyer receives a written request from one
or more of the  Stockholders  who received 1997 Contingent  Payment  Shares,  in
connection  with this  transaction,  to file a registration  statement under the
1933 Act for a public  offering of not less than fifty (50%) percent of the 1997
Contingent  Payment  Shares,  Buyer will use its  reasonable  efforts to cause a
registration  statement to be filed with the Securities and Exchange  Commission
with respect to the number of such shares  specified in the request and will use
its reasonable efforts to cause such registration  statement to become effective
under  the 1933 Act.  Buyer  shall  prepare  and file  with the  Securities  and
Exchange Commission, as soon as reasonably practicable, any necessary amendments
to the Registration Statement or supplements to the prospectus included therein.
Buyer shall not be required to cause more than one registration  statement to be
filed with  respect  to the 1997  Contingent  Payment  Shares  pursuant  to this
Section 12.1.

         (c) 1998  Contingent  Payment  Shares.  If at any one time  during  the
period  beginning  one hundred  eighty (180) days  following the issuance of the
Contingent  Payment Shares,  with respect to the twelve (12) month period ending
December  31, 1998 (the "1998  Contingent  Payment  Shares"),  and ending on the
second  anniversary of such issuance,  Buyer receives a written request from one
or more of the  Stockholders  who received 1998 Contingent  Payment  Shares,  in
connection  with this  transaction,  to file a registration  statement under the
1933 Act for a public  offering of not less than fifty (50%) percent of the 1998
Contingent  Payment  Shares,  Buyer will use its  reasonable  efforts to cause a
registration  statement to be filed with the Securities and Exchange  Commission
with respect to the number of such shares  specified in the request and will use
its reasonable efforts to cause such registration  statement to become effective
under  the 1933 Act.  Buyer  shall  prepare  and file  with the  Securities  and
Exchange Commission, as soon as reasonably practicable, any necessary amendments
to the Registration Statement or supplements to the prospectus included therein.
Buyer shall not be required to cause more than one registration  statement to be
filed with  respect  to the 1998  Contingent  Payment  Shares  pursuant  to this
Section 12.1.

12.2   Participation   of  Selling   Stockholders.   A  stockholder   requesting
registration  under Section 12.1 hereof shall mail a notice thereof to the other
stockholders of Buyer holding any Purchase Shares eligible for inclusion







in such  registration  statement  and shall  afford  them equal  opportunity  to
participate in such public offering;  and the stockholder or stockholders making
the original  request  under  Section 12.1 shall  represent and warrant to Buyer
that it has complied with this requirement.  (As used herein,  the term "Selling
Stockholders"  shall mean the  stockholders  making the original  request  under
Section 12.1 and any other  stockholders  who elect to participate in the public
offering.) Buyer shall promptly furnish to each Selling  Stockholder such number
of copies of the Registration  Statement (including any amendments thereto), any
preliminary  prospectus  and the final  prospectus  (including  any  supplements
thereto) as any Selling Stockholder may reasonably request.

12.3 Conditions of Buyer's  Obligations to Register Shares.  Buyer's  obligation
under  Section 12.1 to cause a  registration  statement or amendment to be filed
shall be subject to the following conditions:

         (a)  The  Selling  Stockholders  shall  have  provided  such  consents,
representations and information and executed such documents as may reasonably be
required in connection with such registration;

         (b) The Selling  Stockholders  shall have agreed in writing not to sell
any of Buyer's  Common  Stock (or any rights with  respect  thereto)  during any
Contingent Payment Trading Period;

         (c) Buyer will be entitled  to include  any other  shares of its Common
Stock  to be  offered  either  by it  or by  any  of  its  stockholders  in  any
registration statement filed pursuant to Section 12.1;

         (d) In no event will any of the  Selling  Stockholders  be  entitled to
request  registration  under  Section  12.1  within a period of ninety (90) days
following the effective date of any other registration  statement filed by Buyer
(other than a registration statement covering the offer and sale of Common Stock
to its  employees  and  subsidiaries)  regardless  of  whether or not any of the
Selling Stockholders participated in such registration statement;

         (e)  Notwithstanding  any other  provision  of this  Agreement,  to the
extent the provisions of  subparagraph  (d) of this Section 12.3 have the effect
of reducing the time period during which Selling Stockholders would otherwise be
entitled to request  registration of their Shares under Section 12.1, the period
during which the Selling Stockholders may request registration, and during which
Buyer shall have a duty hereunder to register said Shares,  shall be extended by
the number of days equal to the aforementioined reduction.

         (f)  All  sales  of  Buyer's   Common  Stock  by  any  of  the  Selling
Stockholders  in  any  registered   offering,   other  than  a  firm  commitment
underwritten offering, shall be made through a coordinating broker acceptable to
Buyer which acceptance by Buyer shall not be unreasonably withheld;

         (g)  All  sales  of  Buyer's   Common  Stock  by  any  of  the  Selling
Stockholders in any registered firm  commitment  underwritten  offering shall be
made through an underwriter  acceptable to Buyer which acceptance by Buyer shall
not be unreasonably withheld; and

         (h)  On and  after  the  one  hundredth  eightieth  day  following  the
effective  date of any  registration  statement  filed pursuant to Section 12.1,
Buyer may,  without  further notice to any Selling  Stockholder,  take action to
deregister  any  shares of its  Common  Stock  registered  by such  registration
statement and not yet sold.

         (i)  Buyer  shall at the time it is  filing  a  registration  statement
pursuant  to a  request  made  hereunder  be  eligible  to  file a  registration
statement  on  either  Form S-3 or Form S-1 (or any  successor  form to any such








forms).  Buyer  shall not take or omit to take any  action  for the  purpose  of
rendering itself ineligible to file a registration statement on Form S-1 or Form
S-3.

12.4  Expenses.  The  expenses of  registration  of the  Purchase  Shares of the
Selling  Stockholders  pursuant  to  Section  12.1  will be paid by  Buyer.  For
purposes of this Section 12.4, the term "expenses" shall include federal,  state
and other  registration  and  qualification  fees,  legal fees and  expenses for
Buyer's  counsel,   auditing  and  accounting  expenses  incurred  by  Buyer  in
connection with the  registration and printing and other related  expenses,  but
shall  exclude any legal fees for counsel to the  Selling  Stockholders  and any
underwriting  discounts and selling commissions  relating to the Purchase Shares
sold by the Selling Stockholders.

12.5 Financial  Information.  Notwithstanding the foregoing,  in connection with
any registration provided for in this Agreement,  Buyer will not be obligated to
furnish any  information,  financial or  otherwise,  other than the  information
required and in the form and format which is customarily required at the time of
the  execution of this  Agreement to  accomplish  any  registration  of the type
provided for in this Agreement,  unless otherwise required by the Securities and
Exchange Commission; it being understood,  that as of the date hereof, it is not
customary in  connection  with  registrations  of the type  provided for in this
Agreement  for the  registrant  to furnish  audited  financial  information  for
interim quarterly periods. In the event that additional  financial statements or
other information is so otherwise  required and is not readily  available,  then
the reasonable salary and related  reasonable  overhead expenses of employees of
Buyer for time expended by such  employees in the  preparation of such financial
or other  information  will be reimbursed to Buyer by the Selling  Stockholders,
pro rata.

12.6  Exclusive  Obligation to Register.  Except as provided in this Article 12,
Buyer will have no obligation to any of the  Stockholders  to register under the
1933 Act any Common Stock received by any of such stockholders  pursuant to this
Agreement.

12.7 State  Securities  Laws. In connection with the registered  offering of any
Buyer common Stock  pursuant to this  Agreement,  Buyer will take such action as
may be  necessary  to  qualify  or  register  the  shares  to be sold  under the
securities  or  "blue-sky"  laws  of  such  jurisdictions  as may be  reasonably
requested by the Selling Stockholders; provided, however, that Buyer will not be
obligated to qualify as a foreign  corporation  to do business under the laws of
any such  jurisdiction  in which it is not then qualified or to file any general
consent to service of process.








12.8     Indemnification.

         In connection  with any  registration  statement filed pursuant to this
Article 12:

         (a) To the  extent  permitted  by law,  Buyer will  indemnify  and hold
harmless  each  Selling  Stockholder  against  any  losses,  claims,  damages or
liabilities,  joint or several,  to which they may become subject under the 1933
Act or otherwise,  insofar as such losses,  claims,  damages or liabilities  (or
actions in respect thereof) arise out of or are based upon any untrue or alleged
untrue  statement of any material fact contained or incorporated by reference in
such  registration  statement,  including  any  preliminary  prospectus or final
prospectus  contained therein or any amendment or supplement  thereto,  or arise
out of or are based upon the  omission or alleged  omission  to state  therein a
material fact required to be stated  therein,  and will  reimburse  each Selling
Stockholder  for any  legal or other  expenses  reasonably  incurred  by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the indemnity agreement contained
in this subsection  12.8(a) shall not apply to amounts paid in settlement of any
such loss,  claim,  damage,  liability or action if such  settlement is effected
without Buyer's  consent (which consent shall not be unreasonably  withheld) nor
shall  Buyer be  liable  in any such  case for any  such  loss,  claim,  damage,
liability  or action to the  extent  that it arises  out of or is based  upon an
untrue  statement or alleged  untrue  statement or omission or alleged  omission
made in connection with such  registration  statement,  preliminary  prospectus,
final  prospectus  or amendment or  supplement  thereto in reliance  upon and in
conformity with written  information  furnished  expressly for use in connection
with such registration by any Selling Stockholder.

         (b) To the extent  permitted  by law,  each  Selling  Stockholder  will
indemnify and hold harmless Buyer,  each of its directors,  each of its officers
who have signed such registration  statement,  each person, if any, who controls
Buyer within the meaning of the 1933 Act, any underwriter (within the meaning of
the 1933 Act) (in the case of an  underwritten  public  offering) and each other
Selling Stockholder against any losses,  claims, damages or liabilities to which
Buyer or any such director, officer,  controlling person, or Selling Stockholder
may become  subject,  under the 1933 Act or  otherwise,  insofar as such losses,
claims,  damages or liabilities (or actions in respect  thereto) arise out of or
are based upon any untrue or  alleged  untrue  statement  of any  material  fact
contained or expressly incorporated by reference in such registration statement,
including any preliminary  prospectus or final prospectus  contained  therein or
any amendment or supplement  thereto, or arise out of or based upon the omission
to state therein a material  fact required to be stated  therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the  extent,  that such  untrue  statement  or alleged  untrue  statement  or
omission  or  alleged  omission  was  made  in  such   registration   statement,
preliminary prospectus,  final prospectus, or amendments or supplements thereto,
in reliance upon and in conformity  with written  information  furnished by such
Selling Stockholder expressly for use in connection with such registration;  and
such Selling  Stockholder will reimburse any legal or other expenses  reasonably
incurred by Buyer or any such director, officer, controlling person, underwriter
or Selling  Stockholder in connection with  investigating  or defending any such
loss,  claim,  damage,  liability  or action.  It is agreed  that the  indemnity
agreement  contained in this subsection  12.8(b) shall not apply to amounts paid
in  settlement  of any such loss,  claim,  damage,  liability  or action if such
settlement  is  effected  without  the  consent  of  the  indemnifying   Selling
Stockholder (which consent shall not be unreasonably withheld).

         (c) Promptly after receipt by a party who may be indemnified under this
Section 12.8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under  this  Section  12.8,  notify  the  indemnifying  party in  writing of the
commencement  thereof  and the  indemnifying  party  shall  have  the  right  to
participate in, and, to the extent the indemnifying








party desires,  jointly with any other indemnifying party similarly noticed,  to
assume the defense  thereof with counsel  mutually  satisfactory to the parties.
The failure to promptly notify any indemnifying party of the commencement of any
such action, if prejudicial to his ability to defend such action,  shall relieve
such   indemnifying   party  of  any   liability  to  the  party   eligible  for
indemnification  under this  Section  12.8,  but the  omission  so to notify the
indemnifying  party will not relieve him of any  liability  which he may have to
any indemnified party other than under this Section 12.8.

ARTICLE 13.  MISCELLANEOUS.

13.1  Fees and  Expenses.  Each of the  parties  will bear its own  expenses  in
connection  with  the  negotiation  and  the  consummation  of the  transactions
contemplated by this Agreement, and no expenses of Seller, any Subsidiary or the
Stockholders  relating in any way to the transactions  contemplated hereby shall
be  charged  to or paid by Buyer or  included  in any  account  of Seller or any
Subsidiary as of the Closing.

13.2  Notices.  Any  notice  or other  communication  in  connection  with  this
Agreement  shall be deemed to be  delivered  if in writing  (or in the form of a
telegram)  addressed as provided  below and if either (a) actually  delivered at
said  address,  or (b) in the case of a letter,  three  business days shall have
elapsed  after the same shall have been  deposited  in the United  States  mail,
postage prepaid and registered or certified, return receipt requested:

         If to  Seller or the Stockholders, to:

         Mr. W. Thomas Deas
         P.O. Box 567
         Northport, AL 35476

         with a copy to:

         W. Marcus Brakefield, Esquire
         Hubbard, Smith, McIlwain, Brakefield & Shattuck, P.C.
         808 Lurleen Wallace Blvd., North
         P.O. Box 2427
         Tuscaloosa, AL  35403-2427

         If to  Buyer or Acquisition Corp., to:

         Southern Energy Homes, Inc.
         Highway 41 North
         P.O. Box 390
         Addison, AL  35540
         Attn:  Keith Brown, Chief Financial Officer







         with a copy to:

         Paul J. Hartnett, Jr., Esquire
         Brown, Rudnick, Freed & Gesmer, P.C.
         One Financial Center
         Boston, MA  02111

and in any case at such other address as the addressee  shall have  specified by
written  notice.  All  periods  of  notice  shall be  measured  from the date of
delivery thereof.

13.3 Entire  Agreement.  This  Agreement  (including  all  exhibits or schedules
appended to this Agreement and all documents  delivered  pursuant to or referred
to in this Agreement,  all of which are hereby incorporated herein by reference)
constitutes  the  entire  agreement  between  the  parties,  and  all  promises,
representations, understandings, warranties and agreements with reference to the
subject matter hereof and  inducements  to the making of this  Agreement  relied
upon by any  party  hereto,  have  been  expressed  herein  or in the  documents
incorporated herein by reference.

13.4  Assignability.  This  Agreement  shall  be  binding  upon,  and  shall  be
enforceable  by and inure to the benefit of, the parties  named herein and their
respective personal  representatives  successors and assigns.  Buyer may make an
assignment of this  Agreement  upon written  notice to Seller,  although no such
assignment  shall relieve Buyer of any  liabilities  or  obligations  under this
Agreement.  Neither  Seller,  any Subsidiary nor any Stockholder may assign this
Agreement without the prior written consent of Buyer.

13.5  Publicity and  Disclosures.  No press  releases or any public  disclosure,
either written or oral, of the transactions contemplated by this Agreement shall
be  made  without  the  prior   knowledge  and  written  consent  of  Buyer  and
Stockholders.

13.6  Confidentiality.  Each party agrees that it will keep confidential and not
disclose or divulge any  confidential,  proprietary or secret  information which
they  may  obtain  from the  other  party in  connection  with the  transactions
contemplated herein, or pursuant to inspection rights granted hereunder,  unless
such information is or hereafter becomes public information.

13.7 Governing Law; Severability. This Agreement shall be deemed a contract made
under  the laws of the State of  Delaware  and,  together  with the  rights  and
obligations of the parties  hereunder,  shall be construed under and governed by
the laws of such state (other than the choice of law  provisions  thereof).  The
invalidity  or  unenforceability  of any provision of this  Agreement  shall not
affect the validity or enforceability of any other provision hereof.

13.8 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original but all of which together shall  constitute
one and the same instrument.

13.9 Effect of Table of Contents and Headings.  Any table of contents,  title of
an article or section  heading herein  contained is for convenience of reference
only and shall not affect the meaning of  construction  of any of the provisions
hereof.

         [SIGNATURE PAGES FOLLOW]






         IN WITNESS  WHEREOF the parties hereto have caused this Agreement to be
executed in multiple  counterparts  as of the date set forth above by their duly
authorized representatives.

                  BUYER:

                  Southern Energy, Homes, Inc.

                  BY: ____________________________
                           Keith W. Brown, CFO


                  SEH Acquisition Corp.

                  BY: ______________________________
                           Keith W. Brown, President



                  STOCKHOLDERS:

                  -------------------------------
                  W. Thomas Deas

                  -------------------------------
                  James M. Moore, III

                  -------------------------------
                  W. David Deas

                  -------------------------------
                  J.M. Deas, Jr.

                  -------------------------------
                  James Miller Deas

                  -------------------------------
                  Thomas Deas, Jr.

                  -------------------------------
                  Gregory C. Vogel








                  SELLER:

                  BR Holding Corp.

                  BY: ____________________________
                           W. Thomas Deas, President







                  SUBSIDIARIES:

                  BR Chilton Co., Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President



                  BR Mississippi, Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President



                  BR Marshall Co., Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President



                  BR Tuscaloosa Co., Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President



                  SC Tuscaloosa Co., Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President



                  TH Center, Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President



                  SE Management, Inc.

                  BY: ____________________________
                           W. Thomas Deas, Vice President







                  BR Agency, Inc.

                  BY: ____________________________
                           W. Thomas Deas, President





                      AGREEMENT AND PLAN OF REORGANIZATION
                         LIST OF SCHEDULES AND EXHIBITS

                                                                      Reference
                                                                       at Page
                                                                       -------
SCHEDULES

Schedule 2.3 -             Options, Warrants and Convertible
                                    Securities

Schedule 2.6 -             Financial Statements of Subsidiaries

Schedule 2.7 -             Property, Leases and Equipment

Schedule 2.9 -             Absence of Undisclosed Liabilities

Schedule 2.12 -            Changes in Financial Condition

Schedule 2.14(a) -         Unaffiliated Stockholder Companies

Schedule 2.14(b) -         Financial Statements of Unaffiliated
                                    Stockholder Retailers

Schedule 2.14(c) -         Absence of Undisclosed Liabilities
                                    of Unaffiliated Stockholder Retailers

Schedule 2.14(d) -         Changes in Financial Condition of
                                    Unaffiliated Stockholder Retailers

Schedule 2.14(e) -         Litigation of Unaffiliated
                                    Stockholder Companies

Schedule 2.15 -            Trade Names, Trademarks and
                                    Copyrights
                           
Schedule 2.16 -            Trade Secrets and Customer Lists
                           
Schedule 2.17 -            Contracts and Commitments
                           
Schedule 2.18 -            Employee Benefit Plans
                           
Schedule 2.20 -            Licenses, Permits or Franchises
                  
Schedule 2.21 -            Borrowings

Schedule 2.22 -            Banking Arrangements






Schedule 2.23 -            Insurance

Schedule 2.24 -            Warranty or other Claims

Schedule 2.26 -            Litigation

Schedule 5.4 -             Guaranteed Debt





EXHIBITS                                                               Reference
                                                                        at Page
                                                                        -------

Exhibit A:  Certificate of Merger

Exhibit B:  Contingent Payment Schedule

Exhibit C:  Dealer Volume Incentive Program Terms

Exhibit D:  Employment Contracts

Exhibit E:  Non Competition Agreements

Exhibit F:  Real Estate Development Agreement

Exhibit G:  Investment Letter




                                    EXHIBIT B

                           CONTINGENT PAYMENT SCHEDULE

                          For the 12 month period ended
                                December 31, 1997

         Seller EBIT (1)              Multiple      Contingent Amount (2)
         ---------------             ----------      --------------------

Less than $2,500,700                 @0       X        $        -0-

Between $2,500,701 and $3,037,800    @2       X        $  2 to $1,074,200

Between $3,037,801 and $3,557,800    @2.25    X        $1,208,477 to $2,378,475

$3,557,801 or more                   @2.5     X        $2,642,753 to Computed
                                                       Multiple

                                           For the 12 month period ended
                                                 December 31, 1998

         Seller EBIT (1)                                    Contingent Amount
         ---------------                                    -----------------

Less than $3,562,500                                          $      -0-

Between $3,562,501 and $4,145,000                             $1,700,000

Between $4,145,001 and $5,016,000                             $2,350,000

$5,016,001 or more                                            $3,070,000

(1) Seller EBIT - Consolidated  Earnings  (defined below) before interest (other
than (i) floor  plan  interest  incurred  with  respect  to  inventory  and (ii)
interest incurred with respect to capital raised or capital expenditures made in
connection with the expansion of the Seller's or the  Subsidiaries'  operations,
which in neither case shall be greater than the cost of funds to Buyer),  taxes,
management fees and any administrative fees paid to Buyer.

(2) Contingent Amount is EBIT less $2,500,700 times applicable multiple.

(3)  "Consolidated  Earnings" means the consolidated  earnings of the Seller and
the Subsidiaries.