THE TRANSFER OF AND PAYMENTS ON THE SENIOR SUBORDINATED NOTES REFERENCED
   HEREIN ARE RESTRICTED BY AND SUBJECT TO THE TERMS AND PROVISIONS OF A
   SENIOR SUBORDINATION AGREEMENT DATED AS OF FEBRUARY 28, 1997, BY AND AMONG
   BANQUE PARIBAS, A BANK ORGANIZED UNDER THE LAWS OF FRANCE ACTING THROUGH
   ITS HOUSTON, TEXAS AGENCY AS AGENT FOR ITSELF AND THE OTHER SENIOR
   LENDERS, RICE PARTNERS II, L.P., A DELAWARE LIMITED PARTNERSHIP, F-
   SOUTHLAND, L.L.C., A NORTH CAROLINA LIMITED LIABILITY COMPANY AND FF-
   SOUTHLAND, L.P., A DELAWARE LIMITED PARTNERSHIP (AS SUCH AGREEMENT MAY BE
   SUPPLEMENTED, MODIFIED, AMENDED OR RESTATED FROM TIME TO TIME), A COPY OF
   WHICH IS ON FILE AT THE CHIEF EXECUTIVE OFFICES OF THE COMPANY.


                             NOTE PURCHASE AGREEMENT

        This Note Purchase Agreement (this "Agreement"), dated as of February
   28, 1997, is by and among SHC Acquisition Corp., a Florida corporation, to
   be merged with and into Southland Holding Company, a Texas corporation
   (the "Company"), JOTAN, INC., a Florida corporation ("Parent"), RICE
   PARTNERS II, L.P., a Delaware limited partnership ("Rice"), and F-
   SOUTHLAND, L.L.C., a North Carolina limited liability company ("F-
   Southland"), FF-SOUTHLAND, L.P., a Delaware limited partnership ("FF-
   Southland") (F-Southland and FF-Southland are individually or
   collectively, as the context requires, referred to herein as "Southland
   Purchasers") (Rice and Southland Purchasers are individually or
   collectively, as the context requires, referred to herein as the
   "Purchaser").  Capitalized terms used in this Agreement are defined in
   Section 11.1.

        To induce each Purchaser to purchase the Senior Subordinated Notes
   from the Company, and for good and valuable consideration, the receipt and
   sufficiency of which are hereby acknowledged, the parties hereto,
   intending to be legally bound, agree as follows.

   I.   DESCRIPTION OF SENIOR SUBORDINATED NOTES AND COMMITMENT

        1.1  Description of Senior Subordinated Notes.  The Company will
   authorize the issuance and sale of its Senior Subordinated Notes which
   shall be dated as of February 28, 1997, shall be in the aggregate original
   principal amount of $9,000,000.00, and shall bear interest at the fixed
   rate of 12.5% per annum; provided, however, that upon the occurrence of a
   Potential Default under Section 8.1(a) hereof or any Event of Default, and
   during the continuation thereof, the unpaid principal amount of the Senior
   Subordinated Notes shall bear interest at the rate of 15.5% per annum. 
   The Senior Subordinated Notes shall each be substantially in the form
   attached hereto as Exhibit A.  Interest on the Senior Subordinated Note
   shall be computed on the basis of the actual number of days elapsed over a
   360 day year.

        1.2  Commitment; Funding.  Subject to the terms and conditions hereof
   and on the basis of the representations and warranties hereinafter set
   forth, the Company agrees to issue and sell to each Purchaser, and each
   Purchaser agrees to purchase from the Company, a Senior Subordinated Note
   in the principal amount set forth beneath the name of such Purchaser on
   the Annex I to this Agreement.  Delivery of the Senior Subordinated Notes
   shall be made on the Closing Date in the offices of Alston & Bird, One
   Atlantic Center, 1201 West Peachtree Street, Atlanta, Georgia  30309-3424,
   against payment of the purchase price thereof, in immediately available
   funds, disbursed on the Closing Date to such Persons as the Company shall
   designate in writing.  Each Senior Subordinated Note will be delivered to
   each respective Purchaser in fully registered form, and shall be issued in
   each Purchaser's name or the name of its nominee.

        1.3  Origination Fee.  The Company shall pay to Purchaser an
   origination fee of $225,000.00 (less a $75,000.00 credit for amounts which
   have been paid by the Company to Rice prior to the Closing Date), in
   immediately available funds, on the Closing Date, which fee shall be
   deemed fully earned and nonrefundable on the Closing Date and allocated to
   each Purchaser as set forth in Annex I to this Agreement.  Each Purchaser
   may, at its option, deduct any and all of its portion of the origination
   fee from the purchase price of its Senior Subordinated Note.

        1.4  Use of Proceeds.  The proceeds from the sale of the Senior
   Subordinated Notes shall be used solely to (a) refinance a portion of
   Parent's existing Indebtedness, (b) finance a portion of the Acquisition
   and related transaction expenses, (c)  recapitalize the Company and
   (d) pay all fees, costs and expenses payable pursuant to this Agreement.

   II.  PAYMENT AND PREPAYMENT OF SENIOR SUBORDINATED OBLIGATIONS

        2.1  Principal and Interest Payments.  Principal and interest on each
   of the Senior Subordinated Notes shall be due and payable as follows:

             (a)  Principal shall be due and payable in four (4) equal
        quarterly installments (each in an equal amount sufficient to fully
        amortize the principal balance of such Senior Subordinated Notes in
        four (4) installments), on the last Business Day of each February,
        May, August and November, commencing on the last Business Day of May,
        2004, with all remaining unpaid principal being due and payable in
        full on the Termination Date.

             (b)  Interest shall be due and payable (i) quarterly in arrears
        on the last Business Day of each February, May, August and November,
        commencing May 30, 1997, and (ii) on the Termination Date.

        2.2  Optional Prepayments.  At the Company's option, upon notice
   given as provided below, the Company may, at any time and from time to
   time, prepay all or any part of the principal of the Senior Subordinated
   Notes, by payment to the Holders (ratably based on the stated principal
   amount of each such Purchaser's Senior Subordinated Note) of the principal
   amount to be prepaid, plus (a) any accrued and unpaid interest on the
   principal amount so prepaid, plus (b) any expenses and/or damages for
   which Purchaser may be entitled to receive payment or reimbursement
   hereunder or, if the Senior Subordinated Notes are being prepaid in full,
   the aggregate amount of all other Senior Subordinated Obligations, plus
   (c) a premium equal to the percentage of the principal amount so prepaid
   which is applicable in accordance with the following table based on the
   date on which such prepayment is made (a "Prepayment Fee"):

               Prepayment Date                          Premium
               ---------------                          -------

      Closing Date through February 28, 1998            12.50%
      March 1, 1998 through February 28, 1999           10.71%
      March 1, 1999 through February 29, 2000            8.92%
      March 1, 2000 through February 28, 2001            7.14%
      March 1, 2001 through February 28, 2002            5.36%
      March 1, 2002 and thereafter                       0.00%

   Each partial prepayment under this Section 2.2 shall be in a principal
   amount of not less than $250,000 or, if greater than $250,000, then in
   integral multiples of $100,000.  Each prepayment under this Section 2.2
   shall be applied first to any expenses or costs to which Purchaser may be
   entitled, second to accrued and unpaid interest on the principal amount so
   prepaid, third to any applicable Prepayment Fee, fourth to installments of
   principal in the inverse order of their maturities, and fifth to any
   damages to which Purchaser may be entitled. The amount of any such
   prepayment may not be reborrowed by the Company.  The Company shall give
   notice of any optional prepayment to each Purchaser not less than fifteen
   (15) days nor more than sixty (60) days before the date for prepayment,
   specifying in each such notice the date upon which such prepayment is to
   be made and the principal amount (together with accrued and unpaid
   interest, if any, thereon and any applicable Prepayment Fee) to be prepaid
   on such date.  Notice of prepayment having been so given, the applicable
   prepayment amount shall become due and payable on the specified prepayment
   date.  The Company shall have no right to prepay the Senior Subordinated
   Notes except as provided in this Section 2.2 or in Section 2.3.

        2.3  Mandatory Prepayments.  Any prepayment under this Section 2.3
   shall be applied first to any expenses to which any Purchaser may be
   entitled, second to accrued interest, third to any applicable Prepayment
   Fee, fourth to principal installments in the inverse order of their
   maturities, and fifth to any damages to which any Purchaser may be
   entitled.  The amount of any such mandatory prepayment may not be
   reborrowed by the Company.  The Company shall make mandatory prepayments
   to the Holders on a pro rata basis of the original principal amount of
   each such Holder's Senior Subordinated Note in each of the following
   circumstances:

             (a)  If during any fiscal year after the Senior Debt is paid in
        full, Parent or any of its Subsidiaries (including without limitation
        the Company) shall sell or otherwise dispose of (other than as
        permitted by Section 6.8 or Section 7.3) any property or properties
        in excess of five percent (5%) of its total assets (including as a
        result of a Casualty Event (to the extent the net cash proceeds
        therefrom are not subsequently applied or committed to apply toward
        replacement, restoration, rebuilding or repair of the damaged
        property within ninety (90) days after the receipt of such net cash
        proceeds)), then the Company shall prepay the Senior Subordinated
        Notes in an amount equal to the lesser of (i) the aggregate net cash
        proceeds of such sale or other disposition (minus the cost of any
        replacement assets or properties purchased within ninety (90) days
        either before or after such sale) or (ii) the aggregate amount of all
        Senior Subordinated Obligations (including any applicable Prepayment
        Fee), such prepayment and premium to be made within ten (10) Business
        Days of receipt of such net proceeds.

             (b)  In the event of any sale or other disposition of all or
        substantially all of the stock or assets of Parent or any of its
        Subsidiaries (including without limitation the Company) in a single
        transaction or series of transactions or a Casualty Event (to the
        extent not subsequently applied or committed to apply toward
        replacement, restoration, rebuilding or repair of the damaged
        property within 90 days after the receipt of such net cash proceeds),
        the Company shall, after the Senior Debt has been paid in full,
        prepay the Senior Subordinated Notes in an amount equal to the lesser
        of (i) the aggregate remaining net cash proceeds of such sales or
        dispositions (minus the cost of any replacement assets or properties
        purchased within ninety (90) days either before or after such sale)
        or (ii) the aggregate amount of all Senior Subordinated Obligations
        (including any applicable Prepayment Fee), such prepayment to be made
        within ten (10) Business Days of receipt of such net proceeds.

        2.4  Additional Payments. Unless otherwise provided herein or in the
   Other Agreements, all Senior Subordinated Obligations, other than
   principal and interest on the Senior Subordinated Notes, shall be payable
   by the Company to the Holder thereof, on demand, and shall bear interest
   from the date thirty (30) days after demand until paid at the rate of
   interest then applicable under Section 1.1.  Payment of fees and expenses
   due and payable on the Closing Date to each Purchaser and such Purchaser's
   legal counsel shall be paid in full on the Closing Date.

        2.5  Liquidated Damages.  Any Prepayment Fee payable pursuant to
   Section 2.2 or Section 2.3 shall be payable as liquidated damages for loss
   of the opportunity to recover loan origination expenses and profits over
   the balance of the term of this Agreement and not as a penalty and the
   Company acknowledges and agrees that such Prepayment Fees are a reasonable
   estimate of such losses.

        2.6  Direct Payment.  The Company will pay all sums becoming due
   hereunder and on the Senior Subordinated Notes to each Purchaser at the
   address specified for such Purchaser on Annex I hereto, by wire transfer
   in U.S. Dollars of Federal Reserve Funds or other immediately available
   funds, to the account specified for such Purchaser on Annex I, or at such
   other address or in such other form as such Purchaser shall have
   designated by notice to the Company at least five Business Days prior to
   the date of any payment, in each case without presentment and without
   notations being made thereon.  All payments by the Company shall be made
   without set-off or counterclaim.  Any wire transfer shall identify such
   payment as "12.5% Senior Subordinated Note/Southland Holding Company" and
   shall identify the payment as principal, premium, interest and/or
   reimbursement of costs and expenses, together with the applicable date or
   period to which it relates.

        2.7  Payments Payable on Business Days.  Payments of all amounts due
   hereunder or under the Senior Subordinated Notes shall be made on a
   Business Day.  Any payment due on a day that is not a Business Day shall
   be made on the next Business Day, together with all interest (if any)
   accrued in the interim.

        2.8  Interest Laws.  Notwithstanding any provision to the contrary
   contained in this Agreement or any Other Agreement, the Company shall not
   be required to pay, and neither Purchaser shall be permitted to contract
   for, take, reserve, charge or receive, any compensation which constitutes
   interest under applicable law in excess of the maximum amount of interest
   permitted by law ("Excess Interest").  If any Excess Interest is provided
   for or determined by a court of competent jurisdiction to have been
   provided for in this Agreement or in any Other Agreement or otherwise
   contracted for, taken, reserved, charged or received, then in such event: 
   (a) the provisions of this Section 2.8 shall govern and control; (b) the
   Company shall not be obligated to pay any Excess Interest; (c) any Excess
   Interest that any Purchaser may have contracted for, taken, reserved,
   charged or received hereunder shall be, at the Holders' option,
   (i) applied as a credit against the outstanding principal balance of the
   Senior Subordinated Obligations or accrued and unpaid interest (not to
   exceed the maximum amount permitted by law), (ii) refunded to the payor
   thereof, or (iii) any combination of the foregoing; (d) the interest
   provided for shall be automatically reduced to the maximum lawful rate
   allowed from time to time under applicable law (the "Maximum Rate"), and
   this Agreement and the Other Agreements shall be deemed to have been, and
   shall be, reformed and modified to reflect such reduction; and (e) the
   Company shall have no action against the Holders for any damages arising
   due to any Excess Interest.  If for any period of time interest on any
   Senior Subordinated Obligations is calculated at the Maximum Rate rather
   than the applicable rate under this Agreement, and thereafter such
   applicable rate becomes less than the Maximum Rate, the rate of interest
   payable on such Senior Subordinated Obligations shall remain at the
   Maximum Rate until the Holders shall have received the amount of interest
   which the Holders would have received during such period on such Senior
   Subordinated Obligations had the rate of interest not been limited to the
   Maximum Rate during such period.  All sums paid or agreed to be paid
   hereunder or under the Other Agreements for the use, forbearance or
   detention of sums due shall, to the extent permitted by applicable law, be
   amortized, pro-rated, allocated and spread throughout the full term of the
   Senior Subordinated Obligations until payment in full so that the rate or
   amounts of interest on account of the Senior Subordinated Obligations does
   not exceed the Maximum Rate.  The terms of this Section 2.8 shall be
   deemed incorporated into each Other Agreement and any other document or
   instrument between the Company and any Holder or directed to the Company
   by any Holder, whether or not specific reference to this Section 2.8 is
   made.

        2.9  Certain Rights and Obligations Among Holders.  The provisions of
   this Section 2.9 are solely for the benefit of the Holders, and neither
   the Company nor any other Person shall have any rights with respect to or
   be entitled to enforce this Section 2.9.

             (a)  Sharing of Payments.  If, at any time or times, a Holder
   shall not have received a payment on its Senior Subordinated Note, then it
   shall notify the other Holders of such fact, the amount of such
   nonpayment, the date or period to which it relates and, subject to the
   terms of the Senior Subordination Agreement, such other Holders which have
   received such payments shall remit to the unpaid Holder such amount as is
   necessary to allocate the aggregate amount of such payments pro rata among
   all Holders.  The amount of any such remittance shall be credited on the
   Senior Subordinated Note of the Holder to whom it is remitted, and shall
   not be credited on the Senior Subordinated Note of the remitting Holder.

             (b)  Sharing of Prepayments.  Subject to the terms and
   provisions of the Senior Subordination Agreement, if, at any time or
   times, a Holder shall receive a prepayment on its Senior Subordinated
   Note, it shall notify the other Holders of the amount and date of such
   prepayment.  If all other Holders shall not have received a pro rata
   prepayment as agreed, the Holder giving such notice shall remit to the
   other Holders such amount as is necessary to distribute such prepayment
   pro rata among all Holders.  The amount of any such remittance shall be
   credited on the Senior Subordinated Note of the Holder to whom it is
   remitted, and shall not be credited on the Senior Subordinated Note of the
   remitting Holder.

   III. REPRESENTATIONS AND WARRANTIES OF PURCHASER  

        Each Purchaser severally and not jointly represents and warrants to
   the Company as follows:

        3.1  Existence.  It is a limited partnership or limited liability
   company, as the case may be, duly organized, validly existing and in good
   standing under the laws of the jurisdiction of its organization.

        3.2  Authority.  It has the right and power and authority to enter
   into, execute, deliver and perform its obligations under this Agreement,
   and its partners, managers, officers or agents executing and delivering
   this Agreement are duly authorized to do so.  This Agreement has been duly
   and validly  executed and delivered and constitutes the legal, valid and
   binding obligation of such Purchaser, enforceable in accordance with its
   terms.

        3.3  Investor Status.  It (i) is an "accredited investor," as that
   term is defined in Regulation D under the Securities Act of 1933, as
   amended, or (ii) has such knowledge, skill, sophistication and experience
   in business and financial matters, based on actual participation, that it
   is capable of evaluating the merits and risks of the purchase of its
   Senior Subordinated Note from the Company and the suitability thereof for
   such Purchaser.

        3.4  Investment for Own Account.  Except as otherwise contemplated by
   this Agreement, it is acquiring its Senior Subordinated Note for
   investment for its own account and, in any event, not with a view to any
   distribution thereof in violation of applicable securities laws.

        3.5  Legend on Notes.  It agrees that its Senior Subordinated Note
   will bear the appropriate legends referencing restrictions on transfer and
   will not be offered, sold or transferred in the absence of registration or
   exemption under applicable securities laws.

   IV.  REPRESENTATIONS AND WARRANTIES OF PARENT AND THE COMPANY

        To induce each Purchaser to enter into this Agreement, Parent and the
   Company represent and warrant to each Purchaser that the following
   statements are, and after giving effect to the Acquisition, will be, true,
   correct and complete:

        4.1  Corporate Existence and Authority.  Parent and each of its
   Subsidiaries (a) is a corporation duly organized, validly existing, and in
   good standing under the laws of its state of incorporation, (b) has all
   requisite corporate power and authority to own its assets and carry on its
   business as now conducted; and (c) is qualified to do business in all
   jurisdictions in which the nature of its business makes such qualification
   necessary and where failure to so qualify would have a Material Adverse
   Effect.  Parent and each of its Subsidiaries has the corporate power and
   authority to execute, deliver, and perform its respective obligations
   under this Agreement, the Acquisition Documents, the Senior Loan
   Documents, and all Other Agreements to which it is, or in connection with
   the transactions contemplated hereby may become, a party.

        4.2  Financial Statements.  Parent has delivered to each Purchaser
   (a) audited consolidated financial statements of Parent and Southland as
   at and for the fiscal year ended December 31, 1995, (b) unaudited
   consolidated financial statements of Parent and Southland for the fiscal
   year ended December 31, 1996, and (c) opening balance sheets for Parent
   and its Subsidiaries reflecting a valuation of all of Parent's and each
   Subsidiary's assets and liabilities based on GAAP, and a separate balance
   sheet based on fair value, each as of the Closing Date taking into account
   all transactions taking place on such date, all certified by Parent's
   chief financial officer and (except as stated above) based on GAAP and on
   financial data as of December 31, 1996 (as adjusted to reflect the
   consummation of the transactions contemplated under this Agreement, the
   Acquisition Documents, the Other Agreements and the Senior Loan Documents
   that are contemplated to have occurred on the Closing Date as if the same
   had occurred on December 31, 1996), and which are attached hereto as
   Schedule 4.2(a).  The financial statements referred to in clauses (a) and
   (b) of this Section 4.2 have been prepared in accordance with GAAP (except
   as otherwise noted therein), and fairly present both the financial
   condition of Parent and Southland as of the respective dates indicated
   therein and the results of Parent's and Southland's respective operations
   for the respective periods indicated therein.  Attached hereto as Schedule
   4.2(b) are cash flow projections of the Company for the period beginning
   on December 31, 1996 through December 31, 2001 together with a written
   statement of the assumptions underlying them.  Such cash flow projections
   have been prepared in good faith based on estimates and assumptions
   believed by the Company to be reasonable as of the date such projections
   were prepared, and it is the Company's good faith belief that such cash
   flow projections are reasonably achievable by the Company.  At December
   31, 1996, neither Parent, Southland nor any of their respective
   Subsidiaries had any liabilities or obligations (absolute, accrued,
   contingent or otherwise) of a nature required by GAAP to be reflected in
   such financial statements which were, individually or in the aggregate,
   material to the condition, financial or otherwise, or operations of such
   Person as of that date which are not reflected on such financial
   statements.  There has been no material adverse change in the condition,
   financial or otherwise, or operations of Parent or, to its knowledge,
   Southland, since December 31, 1996, nor has there otherwise occurred a
   Material Adverse Effect.

        4.3  Default.  Neither Parent nor any of its Subsidiaries is in
   violation of any material provision under any material loan agreement,
   indenture, mortgage, security agreement, lease, franchise, permit, license
   or other agreement or obligation to which it is a party or by which any of
   its properties is bound.  Parent and each of its Subsidiaries are paying
   their debts as they become due.

        4.4  Authorization and Compliance with Laws and Material Agreements. 
   The execution, delivery and performance by Parent and its Subsidiaries of
   this Agreement, the Acquisition Documents, the Senior Loan Documents and
   the Other Agreements to which each is or may in connection with the
   transactions contemplated hereby become a party have been or prior to the
   consummation of such transactions contemplated hereby will be duly
   authorized by all requisite action on the part of Parent and each such
   Subsidiary, and do not and will not violate its respective Restated
   Articles of Incorporation, Articles of Incorporation or Bylaws (each as
   amended to the date first above written) or any law or any order of any
   court, governmental authority or arbitrator, and do not and will not upon
   the consummation of the transactions contemplated hereby, in any material
   respect, conflict with, result in a breach of, or constitute a default
   under, or result in the imposition of any Lien (except Permitted Liens)
   upon any assets of Parent or any of its Subsidiaries pursuant to the
   provisions of any loan agreement, indenture, mortgage, security agreement,
   franchise, permit, license or other instrument or agreement by which
   Parent or any of its Subsidiaries or any of their properties are bound. 
   Except  as set forth on Schedule 4.4, no authorization, approval or
   consent of, and no filing or registration with, any court, governmental
   authority or third Person is or will be necessary for the execution,
   delivery or performance by Parent or any of its Subsidiaries of this
   Agreement, the Acquisition Documents, the Senior Loan Documents, and the
   Other Agreements to which each is a party or the validity or
   enforceability thereof.  All such authorizations, approvals, consents,
   filings and registrations described in Schedule 4.4 have been obtained. 
   Neither Parent nor any of its Subsidiaries is (a) in violation of any term
   of its Articles of Incorporation or Bylaws or (b) in material violation of
   any material contract, agreement, judgment or decree and is in material
   compliance with all applicable laws, regulations and rules.

        4.5  Environmental Condition of the Property.  Except as disclosed on
   Schedule 4.5:

             (a)  The location, construction, occupancy, operation and use of
   the Property do not violate in any material respect any applicable law,
   statute, ordinance, rule, regulation, order or determination of any
   governmental authority or other body exercising similar functions, or any
   restrictive covenant or deed restriction (recorded or otherwise) affecting
   the Property, including, without limitation, all applicable zoning
   ordinances and building codes, flood disaster, occupational health and
   safety laws and Environmental Laws and regulations (hereinafter sometimes
   collectively called "applicable laws");

             (b)  Without limitation of paragraph (a) above, neither Parent,
   any Subsidiary nor the Property is subject to any existing, pending or
   threatened investigation or inquiry by any governmental authority or
   subject to any remedial obligations due to violations of applicable laws;

             (c)  Neither Parent nor any Subsidiary is subject to any
   material liability or obligation relating to (i) the environmental
   conditions on, under or about the Property, including, without limitation,
   the soil and ground water conditions at the Property, or (ii) the use,
   management, handling, transport, treatment, generation, storage, disposal,
   release or discharge of any Polluting Substance;

             (d)  There is no Polluting Substance or other substance that may
   pose any material risk to safety, health or the environment on, under or
   about any Property;

             (e)  Parent and its Subsidiaries have taken reasonable steps to
   determine and hereby represent and warrant that no Polluting Substances
   have been disposed of or otherwise released on, onto, into, or from the
   Property in any material respect, and the use which Parent and its
   Subsidiaries make and intend to make of the Property does not and will not
   result in the disposal or other release of any Polluting Substances on,
   onto, into or from the Property in any material respect; and

             (f)  Each of Parent and its Subsidiaries has been issued all
   required federal, state and local licenses, certificates or permits
   relating to, and the Property, Parent, the Subsidiaries and Parent's and
   such Subsidiary's facilities, business, assets, leaseholds and equipment
   are all in compliance in all material respects with all applicable
   federal, state and local laws, rules and regulations relating to, air
   emissions, water discharge, noise emissions, solid or liquid waste
   disposal, Polluting Substances, or other environmental, health or safety
   matters.

        4.6  Solvency. After giving effect to the transactions contemplated
   by the Senior Loan Agreement, this Agreement and the Other Agreements,
   Parent and each of the Subsidiaries individually and on a consolidated
   basis will be solvent, able to pay its debts as they mature, have capital
   sufficient to carry on its business and all businesses in which it is
   about to engage, and 

             (a)  the assets of each of Parent and its Subsidiaries
   individually and on a consolidated basis, at a fair valuation, exceed the
   total liabilities (including contingent, subordinated, unmatured and
   unliquidated liabilities) of Parent and its Subsidiaries;

             (b)  current projections which are based on underlying
   assumptions which provide a reasonable basis for the projections and which
   reflect Parent's judgment based on present circumstances, the most likely
   set of conditions and Parent's most likely course of action for the period
   projected, demonstrate that Parent and its Subsidiaries individually and
   on a consolidated basis will have sufficient cash flow to enable them to
   pay their debts as they mature; and

             (c)  Parent and its Subsidiaries do not have an unreasonably
   small capital base with which to engage in its anticipated business.
   For purposes of clause (a) of this Section 4.6, the "fair valuation" of
   the assets of Parent and each of its Subsidiaries shall be determined on
   the basis of the amount which may be realized within a reasonable time,
   either through collection or sale of such assets at market value, deeming
   the latter as the amount which could be obtained for the property in
   question within such period by a capable and diligent businessman from an
   interested buyer who is willing to purchase under ordinary selling
   conditions.

        4.7  Litigation and Judgments.  Except as disclosed on Schedule 4.7,
   there is no action, suit, proceeding or investigation before any court,
   governmental authority or arbitrator pending, or to the knowledge of
   Parent or the Company threatened, against or affecting Parent or any of
   its Subsidiaries, this Agreement, the Acquisition Documents, the Senior
   Loan Documents and/or the Other Agreements.  Except as disclosed on
   Schedule 4.7,  there are no outstanding judgments against Parent or any of
   its Subsidiaries.  None of the matters listed on Schedule 4.7 could
   reasonably be expected to have, either individually or in the aggregate, a
   Material Adverse Effect.

        4.8  Rights in Properties; Liens.  Parent and its Subsidiaries have
   good and marketable title to all material properties and assets reflected
   on its balance sheets, and none of such properties or assets is subject to
   any Liens, except Permitted Liens.  Parent and its Subsidiaries enjoys
   peaceful and undisturbed possession under all leases necessary for the
   operation of its other Properties, assets, and businesses and all such
   leases are valid and subsisting and are in full force and effect.  There
   exists no default under any provision of any lease which would permit the
   lessor thereunder to terminate any such lease or to exercise any rights
   under such lease which, individually or together with all other such
   defaults, could have a Material Adverse Effect. Each of Parent and its
   Subsidiaries has the right to use all of the Intellectual Property
   necessary to its business as presently conducted, and Parent's and such
   Subsidiary's use of the Intellectual Property does not infringe on the
   rights of any other Person in any material respect.  To the best of the
   Company's and Parent's knowledge, no other Person is infringing the rights
   of Parent or any of its Subsidiaries in any of the Intellectual Property. 
   Neither Parent nor any of its Subsidiaries owes any royalties, honoraria
   or fees to any Person by reason of its use of the Intellectual Property.

        4.9  Enforceability.  This Agreement, the Acquisition Documents, the
   Senior Loan Documents and the Other Agreements to which Parent and any of
   its Subsidiaries is a party, when delivered, shall constitute the legal,
   valid and binding obligations of Parent and such Subsidiaries enforceable
   against Parent and such Subsidiaries in accordance with their respective
   terms.

        4.10 Indebtedness.  After giving effect to the transactions
   contemplated hereby, neither Parent nor any of its Subsidiaries has any
   Indebtedness, except Permitted Indebtedness.  All Indebtedness owed by
   Parent and its Subsidiaries to any Affiliate is set forth on Schedule
   4.10.

        4.11 Taxes.  Each of Parent and its Subsidiaries has timely filed all
   tax returns (federal, state, and local) required to be filed, including,
   without limitation, all income, franchise, employment, property, and sales
   taxes, and has timely paid all of its tax liabilities, other than
   immaterial amounts and taxes that are being contested by Parent or such
   Subsidiary in good faith by appropriate actions or proceedings diligently
   pursued, and for which adequate reserves in conformity with GAAP with
   respect thereto have been established to the reasonable satisfaction of
   the Holders.  Neither the Company nor Parent knows of any pending
   investigation of Parent or any of its Subsidiaries by any taxing authority
   or pending but unassessed tax liability of Parent or any of its
   Subsidiaries.  Neither Parent nor any Subsidiary has made any presently
   effective waiver of any applicable statute of limitations or request for
   an extension of time to file a tax return, and neither Parent nor such
   Subsidiary is a party to any tax-sharing agreement.

        4.12 Use of Proceeds; Margin Securities.  Neither Parent nor any of
   its Subsidiaries is engaged principally, or as one of its important
   activities, in the business of extending credit for the purpose of
   purchasing or carrying margin stock (within the meaning of Regulations G,
   T, U or X of the Board of Governors of the Federal Reserve System), and no
   part of the proceeds of any extension of credit under this Agreement will
   be used to purchase or carry any such margin stock or to extend credit to
   others for the purpose of purchasing or carrying margin stock.  Neither
   Parent, any of its Subsidiaries nor any Person acting on their behalf has
   taken any action that might cause the transactions contemplated by this
   Agreement, the Acquisition Documents, the Senior Loan Documents or any
   Other Agreements to violate Regulations G, T, U or X or to violate the
   Securities Exchange Act of 1934, as amended.

        4.13 ERISA.  All members of any Controlled Group have complied with
   all applicable minimum funding requirements and all other applicable and
   material requirements of ERISA and the Code, applicable to the Employee
   Benefit Plans it or they sponsor or maintain, and there are no existing
   conditions that would give rise to material liability thereunder.  With
   respect to any Employee Benefit Plan, all members of any Controlled Group
   have made all contributions or payments to or under each Employee Benefit
   Plan required by law, by the terms of such Employee Benefit Plan or the
   terms of any contract or agreement.  No Termination Event has occurred in
   connection with any Pension Plan, and there are no unfunded benefit
   liabilities, as defined in Section 4001(a)(18) of ERISA, with respect to
   any Pension Plan which poses a risk of causing a Lien to be created on the
   assets of Parent or any of its Subsidiaries or which will result in the
   occurrence of a Reportable Event.  No member of any Controlled Group has
   been required to contribute to a multiemployer plan, as defined in
   Section 4001(a)(3) of ERISA, since September 2, 1974.  No material
   liability to the Pension Benefit Guaranty Corporation has been, or is
   expected to be, incurred by any member of a Controlled Group.  The term
   "liability," as referred to in this Section 4.13, includes any joint and
   several liability.  No prohibited transaction under ERISA or the Code has
   occurred with respect to any Employee Benefit Plan which could have a
   Material Adverse Effect or a material adverse effect on the condition,
   financial or otherwise, of an Employee Benefit Plan.

        4.14 Delivery of Acquisition Documents, Employment Agreements and
   Non-Compete Agreements.  Each Purchaser has received complete copies of
   the Acquisition Documents, the Employment Agreements and the Non-Compete
   Agreements and all documents executed in connection therewith (including
   all exhibits, schedules and disclosure letters referred to therein or
   delivered pursuant thereto, if any) and all amendments thereto, waivers
   relating thereto and other side letters or agreements affecting the terms
   thereof.  None of such documents and agreements has been amended or
   supplemented, nor have any of the provisions thereof been waived, except
   pursuant to a written agreement or instrument which has heretofore been
   delivered to such Purchaser.

        4.15 Disclosure.  No representation or warranty made by Parent or any
   of its Subsidiaries in this Agreement, the Senior Loan Documents, the
   Acquisition Documents or any Other Agreement to which Parent or any of its
   Subsidiaries is a party contains any material untrue fact or omits to
   state any material fact necessary to make the statements herein or therein
   not misleading.  There is no fact known to Parent or any of its
   Subsidiaries which Parent or any of its Subsidiaries has determined has a
   Material Adverse Effect, or which Parent or any of its Subsidiaries has
   reasonably determined could have a Material Adverse Effect, that has not
   been disclosed in writing to Purchaser.

        4.16 Subsidiaries and Capitalization.  Parent has no Subsidiaries
   except as otherwise set forth on Schedule 4.16.  All the issued and
   outstanding shares of capital stock of Parent and each of its Subsidiaries
   are duly authorized, validly issued, fully paid and nonassessable.  The
   capitalization of Parent and each of its Subsidiaries on the Closing Date
   is set forth on Schedule 4.16.  No violation of any preemptive rights of
   shareholders of Parent or any of its Subsidiaries has occurred by virtue
   of the transactions contemplated under this Agreement, the Acquisition
   Documents, the Senior Loan Documents or any Other Agreement.  There are no
   outstanding contracts, options, warrants, instruments, documents or
   agreements binding upon Parent or any of its Subsidiaries granting to any
   Person or group of Persons any right to purchase or acquire shares of
   Parent's or any such Subsidiary's capital stock, except (i) pursuant to
   the Purchase Documents, (ii) Permitted Stock (as defined in the Purchase
   Documents) and (iii) Series A Preferred Stock (as defined in the Purchase
   Documents).

        4.17 Current Locations.  Schedule 4.17 identifies (a) Parent's and
   each Subsidiary's principal place of business and chief executive office,
   (b) all the locations where Parent and its Subsidiaries maintain any books
   or records relating to any of their assets, (c) all other locations where
   Parent or its Subsidiaries have a place of business, and (d) each address
   where any of Parent's or its Subsidiaries' assets are located.  Schedule
   4.17 accurately indicates whether each such location is owned or leased,
   and, if leased, identifies the owner of such location.  No Person other
   than the Company has possession of any material amount of the assets of
   the Company except as disclosed on Schedule 4.17.

        4.18 Investment Company Act. Neither Parent, any Subsidiary, nor any
   company controlling Parent or such Subsidiary is required to be registered
   as an "investment company" within the meaning of the Investment Company
   Act of 1940, as amended.

        4.19 Public Utility Holding Company Act.  Neither Parent nor any
   Subsidiary is a "holding company" or a "subsidiary company" of a  "holding
   company" or an "affiliate" of a "holding company" or a "public utility"
   within the meaning of the Public Utility Holding Company Act of 1935, as
   amended.

        4.20 No Burdensome Restrictions.  Neither Parent nor any Subsidiary
   is a party to, or bound by any agreement, condition, contract or
   arrangement which has, or which Parent or any Subsidiary reasonably
   expects in the future could have, a Material Adverse Effect.

        4.21 Securities Laws.  The Company has complied with or is exempt
   from the registration and/or qualification requirements of all federal and
   state securities or blue sky laws applicable to the issuance or sale of
   the Senior Subordinated Notes.

        4.22 No Labor Disputes.  Neither Parent nor any of its Subsidiaries
   is involved in any labor dispute.  There are no strikes or walkouts or
   union organization of any of Parent's or any of its Subsidiaries'
   employees threatened or in existence and no labor contract is scheduled to
   expire during the term of this Agreement.  Parent and its Subsidiaries are
   in compliance with all laws, rules, regulations, orders and decrees
   applicable to Parent, its Subsidiaries or their properties, except for
   instances of noncompliance which, individually or in the aggregate, will
   not have a Material Adverse Effect.

        4.23 Brokers.  Neither Parent, any Subsidiary nor any of its
   shareholders has dealt with any broker, finder, commission agent or other
   Person in connection with the Acquisition or other transactions referenced
   in or contemplated by this Agreement, nor is Parent, any Subsidiary or any
   of its shareholders under any obligation to pay any broker's fee or
   commission in connection with such transactions, except as set forth on
   Schedule 4.23.

        4.24 Insurance.  The amount and types of insurance carried by Parent
   and its Subsidiaries, and the terms and conditions thereof, are
   substantially similar to the coverage maintained by companies in the same
   or similar business as Parent and its Subsidiaries and similarly situated,
   and include, without limitation, property and casualty insurance, general
   liability insurance, business interruption insurance and other insurance
   in the amounts and of the types described in Section 6.12 hereof.

        4.25 Conduct of Business.  On the Closing Date, Parent and its
   Subsidiaries is engaged only in businesses of the type described in
   Schedule 4.25.

        4.26 Senior Debt.  Simultaneously with the issuance of the Senior
   Subordinated Notes the Senior Lender will provide the Company with a
   revolving loan facility in an amount not to exceed $12,000,000, a term
   loan facility in an amount not to exceed $17,000,000 and, if applicable,
   an acquisition term loan facility to fund acquisitions in an amount not to
   exceed $10,000,000, all pursuant to the Senior Loan Agreement.  The
   Company expects that a total of approximately $20,000,000 of the Senior
   Debt will be advanced by the Senior Lender to the Company on the Closing
   Date.

   V.   CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

        Each Purchaser's obligations hereunder shall be subject to (a) the
   performance by each of Parent and the Company of its respective
   obligations hereunder which by the terms hereof are to be performed at or
   prior to delivery of the Senior Subordinated Notes, and (b) the
   satisfaction of the following conditions on or before the Closing Date:

        5.1  Effectiveness of Senior Loan Documents.  The Senior Loan
   Documents shall have been duly executed and delivered by the parties
   thereto and shall be on terms and conditions, including amortization
   periods, satisfactory to each Purchaser.  All conditions precedent to the
   making of the Senior Debt shall have been satisfied or waived with Senior
   Lender's and each Purchaser's consent.

        5.2  Effectiveness of Senior Subordination Agreement.  The Senior
   Subordination Agreement shall have been duly executed and delivered by the
   parties thereto, and shall be on terms and conditions which are
   satisfactory to each Purchaser.

        5.3  Minimum Availability.  The Company shall have available cash and
   immediately accessible availability under the Senior Debt in an amount
   equal to not less than $3,000,000.00 on the Closing Date after giving
   effect to the payment of (a) all prior Indebtedness, (b) all fees payable
   to each Purchaser under the terms of this Agreement, and (c) all costs and
   expenses arising as a result of the transactions contemplated by this
   Agreement, the Acquisition Documents, the Senior Loan Documents and any
   Other Agreement to which Parent, the Company and each of its Subsidiaries
   is a party, and each Purchaser shall have received satisfactory evidence
   thereof.

        5.4  Limitation on Fees.  Fees paid or payable to all Persons in
   connection with the closing of the financing contemplated by this
   Agreement, the Acquisition Documents, the Senior Loan Documents and any
   Other Agreement shall be satisfactory to each Purchaser.

        5.5  Acquisition. The Acquisition Documents shall have been duly
   executed and delivered by the parties thereto, all conditions to the
   consummation of the Acquisition shall have been satisfied or waived with
   each Purchaser's consent, and the terms and provisions of the Acquisition
   Documents and the structure of the Acquisition shall be satisfactory to
   each Purchaser.

        5.6  Due Diligence.  The results of each Purchaser's due diligence
   regarding, as applicable, Parent, the Company and each of their
   Subsidiaries, the documentation in respect of Series A Preferred Stock (as
   defined in the Purchase Documents) and the Acquisition shall be
   satisfactory to each Purchaser; and each Purchaser shall be satisfied with
   the assets and books and records and the business and financial condition
   of Parent and its Subsidiaries, the environmental compliance and condition
   of Parent, the Company and each of their Subsidiaries, in each case before
   and after giving effect to the Acquisition.

        5.7  Approval.  Each Purchaser's respective investment committee
   shall have approved the purchase of its Senior Subordinated Note on terms
   set forth herein and in the Other Agreements.

        5.8  No Litigation; Consummation of Transactions; HSR Waiting Period. 
   No injunction, preliminary injunction, or temporary restraining order
   shall be threatened or shall exist which prohibits or may prohibit the
   transactions contemplated herein or any other related transaction, and no
   litigation or similar proceeding (including, without limitation, any
   litigation or other proceeding seeking injunctive or similar relief) shall
   be threatened or shall exist with respect to the transactions contemplated
   herein, which, if adversely determined, could in the judgment of any
   Purchaser have a Material Adverse Effect.  The HSR waiting period
   applicable to the Acquisition shall have expired or terminated.

        5.9  Documents.  Each Purchaser shall have received the following,
   each in form and substance satisfactory to such Purchaser:

             (a)  Senior Subordinated Notes.  Its Senior Subordinated Note
   issued in the name of such Purchaser duly executed by the Company;

             (b)  Warrants, Certificate Evidencing Preferred Stock and
   Purchase Documents.  The Warrants and a stock certificate evidencing the
   Preferred Stock, each of which shall have been duly issued and delivered
   by Parent to each Purchaser (as applicable) in the denominations specified
   on Annex I hereto, along with the fully executed Purchase Documents and
   all other documents and instruments required pursuant thereto;

             (c)  Junior Subordination Agreements.  A junior subordination
   agreement duly executed in favor of each Purchaser by each Affiliate to
   whom Parent, the Company or any of their respective Subsidiaries owes
   Indebtedness;

             (d)  Other Agreements.  All Other Agreements, duly executed by
   the parties thereto;

             (e)  Insurance.  Certified copies of all insurance policies and
   endorsements thereto required by Section 6.12, together with a written
   report from an insurance broker acceptable to each Purchaser, confirming
   that the amount of such insurance coverage and the terms and conditions
   thereof are substantially similar to policies maintained by companies
   similarly situated to Parent, the Company and its Subsidiaries and engaged
   in the same or a similar business;

             (f)  Approvals and Consents.  Copies, certified by the Company
   of all consents, authorizations, filings, licenses and approvals, if any,
   required in connection with the consummation of the Acquisition, the
   execution, delivery and performance by Parent, the Company and each of
   their Subsidiaries, or the validity and enforceability of, this Agreement,
   the Senior Loan Documents, the Acquisition Documents or the Other
   Agreements to which each is a party;

             (g)  Opinion of Counsel to Parent, the Company and the
   Subsidiaries.  The written legal opinion of Alston & Bird, legal counsel
   to Parent, the Company and the Subsidiaries; and written permission from
   each other firm issuing an opinion to the Company or Parent in connection
   with the Acquisition authorizing each Purchaser to rely on such opinions;

             (h)  General Certificate of the Company's Secretary or Assistant
   Secretary.  A certificate of the Secretary or Assistant Secretary of the
   Company together with true, correct and complete copies of the following:

                  (i)  Articles of Incorporation.  The Articles of
        Incorporation of the Company, including all amendments thereto,
        certified by the Secretary of State of the state of its incorporation
        and dated within thirty (30) days prior to the Closing Date;

                 (ii)  Bylaws.  The Bylaws of the Company, including all
        amendments thereto;

                (iii)  Resolutions.  The resolutions of the Board of
        Directors of the Company authorizing  the execution, delivery and
        performance of this Agreement, the Acquisition Documents, the Senior
        Loan Documents and the Other Agreements to which the Company is a
        party;

                 (iv)  Existence and Good Standing Certificates. 
        Certificates of the appropriate government officials of the state of
        incorporation of the Company as to its existence and good standing,
        and certificates of the appropriate government officials in each
        state where the Company does business and where failure to qualify as
        a foreign corporation would have a Material Adverse Effect, as to its
        good standing and due qualification to do business in such state,
        each dated within thirty (30) days prior to the Closing Date; and

                  (v)  Incumbency.  The names of the officers of the Company
        authorized to sign this Agreement and the Other Agreements to be
        executed by the Company, together with a sample of the true signature
        of each such officer;

             (i)  General Certificate of Parent's Secretary or Assistant
   Secretary.  A certificate of the Secretary or Assistant Secretary of
   Parent together with true, correct and complete copies of the following:

                  (i)  Restated Articles of Incorporation.  The Restated
        Articles of Incorporation of Parent, including all amendments
        thereto, certified by the Secretary of State of the state of its
        incorporation;

                 (ii)  Bylaws.  The Bylaws of Parent, including all
        amendments thereto;

                (iii)  Resolutions.  The resolutions of the Board of
        Directors of Parent authorizing (A) the execution, delivery and
        performance of this Agreement, the Acquisition Documents, the Senior
        Loan Documents, and the Other Agreements to which Parent is a party,
        (B) the issuance of the Preferred Stock to each Purchaser and the
        reservation of a sufficient number of shares of Common Stock into
        which such shares of Preferred Stock are exercisable (subject to
        antidilution adjustments), and (C) the reservation of a sufficient
        number of Warrant Shares (as defined in the Purchase Documents);

                 (iv)  Existence and Good Standing Certificates. 
        Certificates of the appropriate government officials of the state of
        incorporation of Parent as to its existence and good standing, and
        certificates of the appropriate government officials in each state
        where Parent does business and where failure to qualify as a foreign
        corporation would have a Material Adverse Effect, as to its good
        standing and due qualification to do business in such state, each
        dated within thirty (30) days prior to the Closing Date; and

                  (v)  Incumbency.  The names of the officers of Parent
        authorized to sign this Agreement and the Other Agreements to be
        executed by Parent, together with a sample of the true signature of
        each such officer;

             (j)  General Certificate of each Subsidiary's Secretary or
   Assistant Secretary.  A certificate of the Secretary or Assistant
   Secretary of each Subsidiary of the Company together with true, correct
   and complete copies of the following:

                  (i)  Articles of Incorporation.  The Articles of
        Incorporation of each Subsidiary of the Company, including all
        amendments thereto, certified by the Secretary of State of the state
        of its incorporation and dated within thirty (30) days prior to the
        Closing Date;

                 (ii)  Bylaws.  The Bylaws of each Subsidiary of the Company,
        including all amendments thereto;

                (iii)  Resolutions.  The resolutions of the Board of
        Directors of each Subsidiary of the Company authorizing  the
        execution, delivery and performance of the Acquisition Documents, the
        Senior Loan Documents, and the Other Agreements, in each case to
        which each such Subsidiary is a party;

                 (iv)  Existence and Good Standing Certificates. 
        Certificates of the appropriate government officials of the state of
        incorporation of each Subsidiary as to its existence and good
        standing, and certificates of the appropriate government officials in
        each state where each such Subsidiary does business and where failure
        to qualify as a foreign corporation would have a Material Adverse
        Effect, as to its good standing and due qualification to do business
        in such state, each dated within thirty (30) days prior to the
        Closing Date; and

                  (v)  Incumbency.  The names of the officers of each
        Subsidiary authorized to sign the Other Agreements to be executed by
        such Subsidiary, together with a sample of the true signature of each
        such officer;

             (k)  Senior Loan Documents.  Copies of the Senior Loan Documents
   and each document relating thereto, and a certificate of the Chief
   Executive Officer and Chief Financial Officer of the Company and Parent
   certifying that the attached documents are a true, correct and complete
   set of the Senior Loan Documents, that all conditions precedent to funding
   of the Senior Debt have been met or waived, and that those transactions
   are being consummated simultaneously with the sale of the Senior
   Subordinated Notes;

             (l)  Acquisition Documents.  Copies of the Acquisition Documents
   and each document relating thereto, and a certificate of the Chief
   Executive Officer and Chief Financial Officer of the Company and Parent
   certifying that the attached documents are a true, correct and complete
   set of the Acquisition Documents, that all conditions precedent to funding
   of the Acquisition have been met or waived, and that those transactions
   are being consummated simultaneously with the sale of the Senior
   Subordinate Notes;

             (m)  Solvency Certificate.  A certificate in form and substance
   satisfactory to each Purchaser regarding the solvency of Parent, the
   Company and their Subsidiaries, individually and on a consolidated basis,
   which includes a pro forma balance sheet and cash flow projections and
   analyses for the Company and Parent, executed by the Chief Executive
   Officer and the Chief Financial Officer of each of the Company and Parent;

             (n)  Sources and Uses Certificate.  A certificate in form and
   substance satisfactory to each Purchaser executed by the Chief Executive
   Officer and Chief Financial Officer of the Company and Parent, setting
   forth in reasonable detail the sources and uses of funds in the
   transactions contemplated herein, in the Senior Loan Documents and in the
   Other Agreements;

             (o)  Communication with Accountants. Purchaser shall have
   received a copy of a letter from each of the Company and Parent addressed
   to its accountants authorizing such accountants to disclose to each
   Purchaser any and all financial information concerning the Company or
   Parent, as the case may be, requested by Purchaser in determining
   compliance with any of the financial covenants set forth in Sections 6.20
   and 7.9;

             (p)  Transaction Certificate.  A certificate of the Chief
   Executive Officer and the Chief Financial Officer of the Company and
   Parent that, to the best of their knowledge after due investigation, all
   conditions precedent to the effectiveness of this Agreement have been
   satisfied or waived;

             (q)  Environmental Reports.  Environmental reports of an
   independent environmental consulting firm satisfactory to each Purchaser
   with respect to the Property and all improvements, fixtures and equipment
   located thereon, which reports shall evidence no violation of
   Environmental Laws or presence of Polluting Substances which is
   unacceptable to any Purchaser in its sole discretion;

             (r)  Employment Agreements.  A copy of each existing Employment
   Agreement, in form and substance satisfactory to each Purchaser;

             (s)  Guaranty Agreements.  A Parent Guaranty executed by Parent,
   a Company Guaranty executed by the Company and a Subsidiary Guaranty
   executed by each Subsidiary of Parent and the Company;

             (t)  Non-Compete Agreements.  The Non-Compete Agreements, in
   form and substance satisfactory to each Purchaser, duly executed by the
   parties thereto; and 

             (u)  Additional Information, Other Documents and Agreements. 
   Such other information, documents, agreements, commitments and
   undertakings as any Purchaser or any Purchaser's counsel shall reasonably
   request.

        5.10 Material Adverse Change.  For the period from December 31, 1996
   to the Closing Date, and except for the transactions contemplated by this
   Agreement, the Other Agreements, the Acquisition Documents and the Senior
   Loan Documents, there shall have been (a) no occurrence or event which, in
   any Purchaser's opinion, has or could have a Material Adverse Effect,
   (b) no law, act, rule, regulation or order of any legislative,
   administrative or judicial body or official which could prevent any
   Purchaser from consummating the transactions contemplated by this
   Agreement and the Other Agreements, and (c) no occurrence or event which
   would lead the Company or any Purchaser to believe that the Company would
   fail to meet the cash flow projections delivered to each Purchaser
   pursuant to Section 4.2.

        5.11 Fees.  An origination fee (less the $75,000.00 credit for
   amounts which have been paid by the Company to Rice prior to the Closing
   Date) in the amounts set forth in Section 1.3 hereof shall have been paid
   to each Purchaser.  All other fees then payable pursuant to this Agreement
   (including the fees, expenses and disbursements of each Purchaser's
   counsel) shall have been paid to each Purchaser (or such counsel, as
   applicable).

        5.12 No Event of Default.  No Event of Default or Potential Default
   shall have occurred and be continuing.

        5.13 Representations and Warranties.  All representations and
   warranties contained in this Agreement, the Senior Loan Documents, the
   Acquisition Documents and the Other Agreements shall be true and correct
   on the Closing Date.

        5.14 Issuance of Preferred Stock.  Parent shall have amended its
   Articles of Incorporation to authorize the issuance of the Preferred
   Stock, the Preferred Stock shall have been issued to each of Rice and the
   Southland Purchasers, as required in the Certificate and Purchase
   Documents, and a certificate evidencing and representing the Preferred
   Stock issued to Rice and the Southland Purchasers shall have been
   delivered to each of Rice and the Southland Purchasers, respectively.

        5.15 Financial Statements.  The consolidating financial statements
   for Parent and Southland shall be satisfactory to each Purchaser.

        5.16 Capital Structure of Parent and its Subsidiaries.  The assets,
   business structure and capital structure of Parent and each of its
   Subsidiaries shall, after giving effect to the Acquisition, be
   satisfactory to each Purchaser in its sole discretion.

        5.17 Reference Calls.  Reference calls made by each Purchaser to any
   key customers or suppliers of Parent and each of its Subsidiaries shall be
   satisfactory to each Purchaser, in its sole discretion.

        5.18 Resignations of Officers and Directors.  Each officer and
   director of Southland and each of its Subsidiaries and each director,
   other than Shea Ralph, of Parent shall have resigned from such position or
   positions and shall have been replaced with such Persons satisfactory to
   each Purchaser in accordance with the Purchase Documents and the
   Certificate.

        5.19 Southland Dividend.  The dividend payable to the shareholders of
   Southland in connection with the Acquisition pursuant to the terms of the
   Acquisition Agreement shall be paid in accordance with all applicable
   corporate, securities and other laws.

   VI.  AFFIRMATIVE COVENANTS

        The Company and Parent covenant and agree that, from the date hereof
   and until the Senior Subordinated Obligations have been finally and
   irrevocably paid in full in accordance with the terms hereof and thereof:

        6.1  Financial Statements.  Parent will furnish to each Purchaser:

             (a)  As soon as available, and in any event within one hundred
   twenty (120) days after the end of each fiscal year of Parent, beginning
   with the fiscal year ending December 31, 1996, (i) a copy of the financial
   statements of Parent for such fiscal year containing a consolidated and
   consolidating balance sheet, statement of income, statement of
   stockholders' equity, and statement of cash flow as at the end of such
   fiscal year and for the fiscal year then ended, in each case setting forth
   in comparative form the figures for the preceding fiscal year, together
   with management's discussion and analysis of variances prepared by
   Parent's management, all in reasonable detail and audited and certified by
   Ernst & Young LLP or any other "Big Six" firm of independent certified
   public accountants (or any other firm of independent certified public
   accountants of recognized national standing selected by Parent and
   consented to by the Holders provided that the Holders consent shall not
   unreasonably be withheld) to the effect that such financial statements
   have been prepared in accordance with GAAP; (ii) a certificate delivered
   to each Purchaser by such independent certified public accountants
   confirming the calculations set forth in the officers' certificate
   delivered simultaneously therewith in accordance with Section 6.2(a); and
   (iii) a comparison of the actual results during such fiscal year to those
   originally budgeted by the Company prior to the beginning of such fiscal
   year, together with management's discussion and analysis of variances, as
   well as, variances between actual results for such fiscal year and actual
   results for the previous fiscal year.  The annual audit report required
   hereby shall not be qualified on the basis that the Company is not a going
   concern or otherwise qualified or limited because of restricted or limited
   examination by the accountant of any material portion of any of the
   records of the Company.

             (b)  As soon as available, and in any event within thirty (30)
   days after the end of each calendar month, a copy of an unaudited
   financial report of Parent and each of its Subsidiaries as of the end of
   such calendar month and for the portion of the fiscal year then ended,
   containing balance sheets, statements of income, retained earnings and
   statements of cash flow, in each case setting forth in comparative form
   the figures for the corresponding period of the preceding fiscal year,
   together with management's discussion and analysis of variances all in
   reasonable detail, including, without limitation, a comparison of the
   actual results during such period to those originally budgeted by Parent
   and each of its Subsidiaries prior to the beginning of such fiscal period
   and for the fiscal year to date.

             (c)  As soon as available, and in any event within thirty (30)
   days after the Closing Date, a balance sheet of the Company that has been
   reviewed by Ernst & Young LLP, or such other independent "Big Six" or
   other nationally recognized accounting firm, dated as of the Closing Date,
   which has been restated using purchase accounting in accordance with APB
   16 and which gives effect to the issuance of the Senior Subordinated Notes
   and the Purchase Documents, and the financing transactions contemplated by
   the Senior Loan Agreement as if all commitments therein available to the
   Company as of the Closing Date were fully utilized, certified by the Chief
   Executive Officer and the Chief Financial Officer of the Company as fairly
   presenting the Company's financial position.

             (d)  Forty-five (45) days after the beginning of each fiscal
   year of Parent, an annual budget or business plan for such fiscal year,
   including a projected consolidated and consolidating balance sheet, income
   statement, and cash flow statement for such year (and any underlying
   assumptions), and, promptly during each fiscal year, all revisions thereto
   approved by the board of directors of Parent.

        6.2  Certificates; Other Information.  Parent will furnish to each
   Purchaser all of the following:

             (a)  Concurrently with the delivery of each of the financial
   statements referred to in Section 6.1(a), Section 6.1(b) and
   Section 6.1(c), a certificate of an authorized officer of the Company and
   Parent in the form of the officer's certificate attached hereto as Exhibit
   B (i) stating that, to the knowledge of such officer, no Event of Default
   or Potential Default has occurred and is continuing or, if such officer
   has knowledge of an Event of Default or Potential Default, the nature
   thereof and specifying the steps taken or proposed to remedy such matter,
   (ii) showing in reasonable detail the calculations showing compliance with
   Sections 6.20 and 7.9, (iii) stating that the financial statements
   attached have been prepared in accordance with GAAP and fairly and
   accurately present (subject to year-end audit adjustments, for the annual
   certificates) the financial condition and results of operations of Parent,
   the Company and their Subsidiaries at the date and for the period
   indicated therein, (iv) containing summaries of accounts payable agings,
   accounts receivable agings, and inventory, (v) containing a schedule of
   the outstanding Indebtedness for borrowed money of Parent, the Company and
   their Subsidiaries describing in reasonable detail each such debt issue or
   loan outstanding and the principal amount and amount of accrued and unpaid 
   interest with respect to each such debt issue or loan, (vi) containing
   management's discussion and analysis of the business and affairs of
   Parent, the Company and their Subsidiaries which includes, but is not
   limited to, a discussion of the results of operations compared to those
   originally budgeted for such period, and (vii) a report detailing (A) all
   matters affecting the value, enforceability or collectibility of any
   material portion of its assets including, without limitation, the
   Company's reclamation or repossession of, or the return to the Company of,
   a material amount of goods and material claims or disputes asserted by any
   customer or other obligor, and (B) any material adverse change in the
   relationship between Parent, the Company or any Subsidiary and any of its
   material suppliers or customers.

             (b)  As soon as available, (i) a copy of each financial
   statement, report, notice or proxy statement sent by Parent to its
   stockholders in their capacity as stockholders, (ii) a copy of each
   regular, periodic or special report, registration statement, or prospectus
   filed by Parent with any securities exchange or the Securities and
   Exchange Commission or any successor agency, (iii) any material order
   issued by any court, governmental authority, or arbitrator in any material
   proceeding to which Parent or any of its Subsidiaries is a party,
   (iv) copies of all press releases and other statements made available
   generally by Parent or any of its Subsidiaries to the public generally
   concerning material developments in Parent's or such Subsidiary's
   business, and (v) a copy of all correspondence and reports sent by Parent
   or the Company to the Senior Lender outside of the ordinary course of
   business.

             (c)  Promptly, such additional information concerning Parent,
   the Company and their Subsidiaries as any Purchaser may reasonably
   request.

        6.3  Books and Records; Accounting System.  Parent and the Company
   will, and will cause each of the Subsidiaries to, keep (a) proper books of
   record and account in which full, true and correct entries will be made of
   all dealings or transactions of or in relation to its business and
   affairs; (b) set up on its books accruals with respect to all taxes,
   assessments, charges, levies and claims; and (c) on a reasonably current
   basis set up on its books from its earnings allowances against doubtful
   receivables, advances and investments and all other proper accruals
   (including, without limitation, by reason of enumeration, accruals for
   premiums, if any, due on required payments and accruals for depreciation,
   obsolescence, or amortization of properties), which should be set aside
   from such earnings in connection with its business.  All determinations
   pursuant to this subsection shall be made in accordance with, or as
   required by, GAAP consistently applied.  Parent and the Company will, and
   will cause each of the Subsidiaries to, maintain a modern system of
   accounting established and administered in accordance with sound business
   practices to permit preparation of consolidated financial statements in
   conformity with GAAP.

        6.4  Financial Disclosure.  The Company and Parent hereby irrevocably
   authorize and direct all accountants and auditors employed by them at any
   time during the term of this Agreement to exhibit and deliver to each
   Purchaser copies of any of their respective financial statements, trial
   balances or other accounting records of any sort in the accountant's or
   auditor's possession, and to disclose to each Purchaser any information
   they may have concerning either party's financial status and business
   operations.  Each of the Company and Parent hereby irrevocably authorizes
   all federal, state and municipal authorities to furnish to each Purchaser
   copies of reports or examinations relating to the Company or Parent,
   whether made by the Company, Parent or otherwise.

        6.5  Disclosure of Material Matters.  Parent and the Company will,
   and will cause each of the Subsidiaries to, promptly upon learning
   thereof, report to each Purchaser (a) all matters materially affecting the
   value, enforceability or collectibility of any material portion of its
   assets including, without limitation, changes to significant contracts,
   schedules of equipment, changes of significant equipment or real property,
   the reclamation or repossession of, or the return to the Company or Parent
   or their Subsidiaries of, a material amount of goods and material claims
   or disputes asserted by any customer or other obligor, and (b) any
   material adverse change in the relationship between Parent or its
   Subsidiaries and any of its suppliers or customers.

        6.6  Performance of Obligations.  Parent and its Subsidiaries will
   duly and punctually pay and perform their obligations, as applicable,
   under this Agreement, the Acquisition Documents and the Other Agreements
   (excluding, to the extent included, the Senior Loan Documents) to which
   each is a party.

        6.7  Preservation of Existence and Conduct of Business.  Parent and
   Company will, and will cause each of the Subsidiaries to, preserve and
   maintain its corporate existence and all of its leases, privileges,
   franchises, qualifications and rights that are necessary or useful in the
   ordinary conduct of its business and where failure to do so would have a
   Material Adverse Effect, and conduct its business as presently conducted
   in an orderly and efficient manner in accordance with good business
   practices; provided, however, that nothing contained in this Section 6.7
   shall prohibit the occurrence of the Acquisition Merger and other
   acquisitions and mergers permitted under the terms of the Senior Loan
   Agreement.

        6.8  Maintenance of Properties.  Parent and the Company will, and
   will cause each of the Subsidiaries to, operate and maintain in good
   condition and repair (ordinary wear and tear excepted) and replace as
   necessary, all of its material assets and properties which are necessary
   in accordance with sound business practices in the proper conduct of its
   business so that the value and operating efficiency of its assets and
   properties are maintained and preserved.  Parent and the Company will, and
   will cause each of the Subsidiaries to, at all times maintain the
   Intellectual Property material to its business in full force and effect,
   and will defend and protect the Intellectual Property against all material
   adverse claims.

        6.9  Payment of Taxes and Claims.  Parent and the Company will, and
   will cause each of the Subsidiaries to, pay or discharge, at or before
   maturity or before becoming delinquent (a) all taxes, levies, assessments,
   vault, water and sewer rents, rates, charges, levies, permits, inspection
   and license fees and other governmental and quasi-governmental charges and
   any penalties or interest for nonpayment thereof, heretofore or hereafter
   imposed or which may become a Lien upon any property owned by Parent or
   such Subsidiary or arising with respect to the occupancy, use, possession
   or leasing thereof (collectively the "Impositions") and (b) all lawful
   claims for labor, material, and supplies, which, if unpaid, might become a
   Lien upon any of its Property; provided, however, that neither Parent nor
   its Subsidiaries will be required to pay or discharge any claim for labor,
   material, or supplies or any Imposition (i) which is being contested in
   good faith by appropriate actions or proceedings diligently pursued, and
   for which adequate reserves in conformity with GAAP with respect thereto
   have been established to the reasonable satisfaction of the Holders, and
   (ii) if the failure to pay or discharge the same would not result in a
   Material Adverse Effect.

        6.10 Compliance with Laws.  Parent and the Company will, and will
   cause each of the Subsidiaries to, comply with all acts, rules,
   regulations and orders of any legislative, administrative or judicial body
   or official applicable to the operation of Parent's or such Subsidiary's
   business if noncompliance with such acts, rules, regulations or orders
   could have a Material Adverse Effect; provided, however, Parent or such
   Subsidiary may contest or dispute any acts, rules, regulations, orders and
   directions of those bodies or officials by appropriate actions or
   proceedings diligently pursued, if adequate reserves in conformity with
   GAAP with respect thereto are established to the reasonable satisfaction
   of the Holders.

        6.11 Payment of Leasehold Obligations.  Parent and the Company will,
   and will cause each of the Subsidiaries to, at all times, pay, when and as
   due, its rental obligations under all leases under which it is a tenant or
   lessee, and shall otherwise comply, in all material respects, with all
   other terms of such leases and keep them in full force and effect and, at
   the request of the Holders, will provide evidence of its having done so;
   provided, however, Parent or such Subsidiary may contest or dispute its
   obligations under such leases by appropriate actions or proceedings
   diligently pursued if adequate reserves in conformity with GAAP with
   respect thereto are established.

        6.12 Insurance; Casualty Event.  Parent and the Company will, and
   will cause each of the Subsidiaries to, maintain, with financially sound,
   reputable and solvent companies, insurance policies acceptable to the
   Holders (a) insuring its assets against loss by fire, explosion, theft and
   other risks and casualties as are customarily insured against by companies
   engaged in the same or a similar business, and (b) insuring Parent and its
   Subsidiaries against liability for personal injury and property damages
   relating to its assets, such policies to be in such amounts and covering
   such risks as are usually insured against by companies engaged in the same
   or a similar business, and insuring such other matters as may from time to
   time be reasonably requested by the Holders.  Parent and Company will, and
   will cause each of the Subsidiaries to, provide copies of all such
   insurance policies to each Purchaser within ten (10) days following such
   Purchaser's request for the same.  Parent and the Company will, and will
   cause each of the Subsidiaries to, (i) pay, or cause to be paid, all
   premiums for such insurance at least thirty (30) days before such premiums
   become due, (ii) furnish to each Purchaser satisfactory proof of the
   timely making of such payments, (iii) deliver all renewal policies to each
   Purchaser at least five (5) days before the expiration date of each
   expiring policy, (iv) cause such policies to require the insurer to give
   notice to each Purchaser of termination of any such policy at least thirty
   (30) days before such termination is to be effective and (v) immediately
   deliver written notice to each Purchaser of any Casualty Event.  If Parent
   or any of its Subsidiaries fails to provide and pay for any such
   insurance, each Purchaser may, at its option, but shall not be required
   to, pay the same and charge Parent or any Subsidiary therefor.

        6.13 Inspection Rights.  At any reasonable time and from time to
   time, Parent and Company will, and will cause each of the Subsidiaries to,
   permit representatives of any Purchaser to examine and make copies of the
   books and records of, and visit and inspect the properties of, Parent and
   its Subsidiaries, and to discuss the business, operations, and financial
   condition of Parent and its Subsidiaries with its respective officers and
   employees and with its independent certified public accountants.  Such
   examinations and inspections may include, but are not limited to, audits
   of the application of proceeds from the Senior Subordinated Notes.  In
   accordance with the terms of Section 12.1 hereof, Parent will promptly
   reimburse each Purchaser for all expenses incurred by representatives of
   Purchaser in connection with such inspections.

        6.14 Notices. Parent and the Company will, and will cause each of the
   Subsidiaries to, promptly, but in any event within two (2) Business Days
   after first becoming aware thereof, notify each Purchaser via telephone,
   subsequently confirmed or, if requested by such Purchaser, in writing of:

             (a)  the commencement of any event, including but not limited
   to, any action, suit, or proceeding against Parent or any Subsidiary, that
   could have a Material Adverse Effect, which notice shall specify the
   nature of such event and what action Parent or such Subsidiary has taken
   or is taking or proposes to take with respect thereto;

             (b)  the occurrence of an event of default, or an event which
   with the passage of time or giving of notice or both constitutes an event
   of default under the Senior Loan Documents or under any instrument or
   agreement evidencing any other Indebtedness of Parent or such Subsidiary,
   which notice shall specify the nature of such event, condition or default
   and what action Parent or such Subsidiary has taken or is taking or
   proposes to take with respect thereto; or

             (c)  The occurrence of an Event of Default or a Potential
   Default, which notice shall specify the nature of such event, condition or
   default and what action Parent or such Subsidiary has taken or is taking
   or proposes to take with respect thereto.

   Any notification required by this Section 6.14 shall be accompanied by a
   certificate of the Chief Executive Officer or Chief Financial Officer
   setting forth the details of the specified events and the action which
   Parent or such Subsidiary proposes to take with respect thereto.

        6.15 Additional Notices.  Immediately upon receipt by Parent or any
   Subsidiary, Parent or the Company will, and will cause the Subsidiaries
   to, provide each Purchaser with copies of all notices (including notices
   of default), statements and financial information, including notices of
   default, received from the Senior Lender under the Senior Loan Agreement
   and any other creditor or lessor with respect to the acceleration of the
   maturity of any item of Indebtedness for borrowed money or the
   repossession of property from Parent or such Subsidiary.

        6.16 Senior Loan Document Amendments.  Parent and Company will, and
   will cause the Subsidiaries to, promptly provide each Purchaser with
   copies of all proposed amendments to the Senior Loan Documents and of all
   other loan agreements to which Parent or such Subsidiary is a party.

        6.17 Further Assurances.  Parent and the Company will, and will cause
   the Subsidiaries to, execute and deliver to each Purchaser from time to
   time, upon demand, such supplemental agreements, statements, assignments
   and transfers, or instructions or documents as any Purchaser may request,
   in order that the full intent of this Agreement and the Other Agreements
   may be carried into effect.

        6.18 Compliance with ERISA and the Code.  Parent and the Company
   will, and will cause each of the Subsidiaries to, comply, and will cause
   each other member of any Controlled Group to comply, with all minimum
   funding requirements, and all other material requirements, of ERISA and
   the Code, if applicable, to any Employee Benefit Plan it or they sponsor
   or maintain, so as not to give rise to any liability thereunder.  Parent
   and the Company will, and will cause each of the Subsidiaries to, pay and
   will cause each other member of any Controlled Group to pay when due any
   amount payable by it to the Pension Benefit Guaranty Corporation. 
   Promptly after the filing thereof, Parent and the Company shall furnish to
   each Purchaser with regard to each Employee Benefit Plan, copies of each
   annual report required to be filed pursuant to Section 104 of ERISA in
   connection with each such plan for each plan year.

        6.19 Compliance with Regulations G, T, U and X.  Neither the Company,
   Parent nor any Person acting on their behalf will take any action which
   might cause this Agreement, the Senior Subordinated Notes, the Purchase
   Documents, the Senior Loan Documents or any Other Agreements to violate,
   and the Company and Parent will take all actions necessary to cause
   compliance with, Regulations G, T, U and X of the Board of Governors of
   the Federal Reserve System and the Securities Exchange Act of 1934, in
   each case as now in effect or as the same may hereafter be in effect.

        6.20 Financial Covenants.

             (a)  Total Debt to EBITDA.  As of the end of each Fiscal Quarter
        during the periods set forth below beginning with the Fiscal Quarter
        ending March 31, 1998, Parent shall not permit the ratio of Total
        Debt of Parent determined on a consolidated basis which is
        outstanding as of the date of determination to EBITDA for the twelve
        (12) month period (or portion thereof since the Closing Date) then
        ending to exceed the ratio set forth below opposite the applicable
        period below:

                           Period                            Ratio
                           ------                            -----

            March 31, 1998 through June 30, 1998          4.95 to 1.00
            July 1, 1998 through  September 30, 1998      4.68 to 1.00
            October 1, 1998 through December 31, 1998     4.40 to 1.00
            January 1, 1999 through June 30, 1999         4.13 to 1.00
            July 1, 1999 through September 30, 1999       3.85 to 1.00
            October 1, 1999 through December 31, 1999     3.58 to 1.00
            January 1, 2000 through June 30, 2000         3.30 to 1.00
            July 1, 2000 through September 30, 2000       3.03 to 1.00
            October 1, 2000 and the end  of each
              Fiscal Quarter thereafter                   2.75 to 1.00

             (b)  Interest Coverage.  Parent shall not permit the ratio of
        Operating Cash Flow to cash interest expense of Parent and the
        Subsidiaries determined on a consolidated basis, both calculated for
        the twelve (12) month period (or portion thereof since the Closing
        Date) ending on the last day of each Fiscal Quarter (beginning with
        the Fiscal Quarter ending June 30, 1997) during the periods set forth
        below, to be less than the ratio set forth below opposite the
        applicable period below:


                         Period                            Ratio
                         ------                            -----
   
            Closing Date through June 30, 1997          1.35 to 1.00
            July 1, 1997 through September 30, 1997     1.67 to 1.00
            October 1, 1997 through March 31, 1998      1.80 to 1.00
            April 1, 1998 through September 30, 1998    2.03 to 1.00
            October 1, 1998 through March 31, 1999      2.25 to 1.00
            April 1, 1999 through September 30, 1999    2.48 to 1.00
            October 1, 1999 through March 31, 2000      2.70 to 1.00
            April 1, 2000 through September 30, 2000    2.93 to 1.00
            October 1, 2000 and the end of each
              Fiscal Quarter thereafter                 3.15 to 1.00

             (c)  Fixed Charge Coverage.  Parent shall not permit the ratio
        of Operating Cash Flow to Fixed Charges computed on the basis of the
        Operating Cash Flow and Fixed Charges for the twelve (12) month
        period (or portion thereof since the Closing Date) ending on the last
        day of each Fiscal Quarter (beginning with the Fiscal Quarter ending
        June 30, 1997) to be less than the ratio set forth below opposite the
        applicable period below:


                            Period                           Ratio
                            ------                           -----

              Closing Date through June 30, 1997          1.00 to 1.00
              July 1, 1997 through June 30, 1998          1.04 to 1.00
              July 1, 1998 through September 30, 1998     1.08 to 1.00
              October 1, 1998 and the end of each
                Fiscal Quarter thereafter                 1.12 to 1.00


             (d)  EBITDA.  As of the end of each Fiscal Quarter set forth
        below, Parent shall not permit EBITDA for the twelve (12) month
        period (or portion thereof since the Closing Date) then ending to be
        less than the Dollar amount set forth below for such Fiscal Quarter:


                      Period                             Dollar Amount
                      ------                             -------------

                June 30, 1997                             $1,710,000
                September 30, 1997                        $3,420,000
                December 31, 1997                         $4,860,000
                March 31, 1998                            $5,625,000
                June 30, 1998                             $5,850,000
                September 30, 1998                        $6,075,000
                December 31, 1998                         $6,300,000
                March 31, 1999                            $6,525,000
                June 30, 1999                             $6,750,000
                September 30, 1999                        $6,975,000
                December 31, 1999                         $7,200,000
                March 31, 2000                            $7,425,000
                June 30, 2000                             $7,650,000
                September 30, 2000                        $7,875,000
                December 31, 2000                         $8,100,000
                March 31, 2001                            $8,325,000
                June 30, 2001                             $8,550,000
                September 30, 2001                        $8,730,000
                December 31, 2001 and the last each 
                 Fiscal Quarter thereafter                $9,000,000


             (e)  Net Worth.  Parent will at all times maintain Consolidated
        Net Worth in an amount not less than the sum of (a) Twelve Million
        Dollars ($12,000,000); plus (b) sixty seven and one-half percent
        (67.5%) of Parent's Net Income for each Fiscal Quarter to have
        completely elapsed since the Closing Date; plus (c) ninety percent
        (90%) of the net cash proceeds of any sale of Securities or other
        contributions to the capital of Parent received by Parent since the
        Closing Date, calculated without duplication.  If Net Income for a
        Fiscal Quarter is zero or less, no adjustment to the requisite level
        of Consolidated Net Worth shall be made.

        6.21 Fiscal Year.  The Company and Parent will cause their fiscal
   year to be the twelve month period ending on December 31 of each year.

        6.22 Board Observation and Membership.  Parent and the Company
   will, and will cause each of the Subsidiaries to, deliver to each Holder a
   copy of the minutes of and all materials distributed at or prior to all
   meetings of the board of directors (including the executive, compensation
   and other committees thereof) or shareholders of such Person, certified as
   true and accurate by the Secretary of such Person, promptly following each
   such meeting.  Parent and the Company will, and will cause each of the
   Subsidiaries to, (a) permit each Holder to designate one (1) person to
   attend all meetings of such Person's board of directors (including
   executive, compensation and other committee meetings), (b) provide such
   designees not less than twenty-one (21) calendar days' actual notice of
   all regular meetings and seven (7) calendar days' actual notice of all
   special meetings of such Person's board of directors (including the
   executive, compensation and other committees thereof) or shareholders,
   (c) permit such designees to attend all such meetings as an observer, and
   (d) provide to such designees a copy of all materials distributed at such
   meetings or otherwise to the board of directors of Parent and its
   Subsidiaries.  Parent and each Subsidiary agrees to reimburse each
   individual referred to in Subsection (a) above for all reasonable expenses
   incurred in traveling to and from such meetings and attending such
   meetings.

        6.23 Environmental Costs.

             (a)  Parent and the Company hereby indemnify and hold each
   Purchaser harmless from and against any liability, loss, damage, suit,
   action or proceeding pertaining to solid or hazardous waste materials or
   other waste-like or toxic substances, including, but not limited to,
   claims of any federal, state or municipal government or quasi-governmental
   agency or any third person, whether arising under any federal, state or
   municipal law or regulation, or tort, contract or common law that relates
   to Parent and each Subsidiary.

             (b)  To the extent the laws of the United States or any state in
   which property, leased or owned, of Parent or any Subsidiary provide that
   a Lien upon the property of Parent or such Subsidiary may be obtained for
   the removal of Polluting Substances which have been released, no later
   than sixty (60) days after notice is given by any Holder to the Company,
   the Company shall deliver to each Purchaser a report issued by a
   qualified, third party environmental consultant selected by the Company
   and approved by such Holder as to the existence of any Polluting
   Substances located upon or beneath the specified property, leased or owned
   by Parent or such Subsidiary.  To the extent any such Polluting Substance
   is located therein or thereunder that either (i) subjects the property to
   Lien or (ii) requires removal to safeguard the health of any Person,
   Parent and the Company will, and will cause each of the Subsidiaries to,
   remove, or cause to be removed, such Lien and such Polluting Substance at
   Parent's and the Company's expense.

        6.24 Employment Agreements and Non-Compete Agreements.  Parent and
   the Company will, and will cause each of the Subsidiaries to, as
   applicable, at all times maintain the Employment Agreements and Non-
   Compete Agreements in full force and effect, and will diligently enforce
   the Employment Agreements and Non-Compete Agreements against any parties
   thereto who violate or attempt to violate any of such Employment
   Agreements or Non-Compete Agreements.

   VII. NEGATIVE COVENANTS

        Parent and the Company covenant and agree that from the date hereof
   until the Senior Subordinated Obligations have been finally and
   irrevocably paid in full in accordance with the terms hereof and thereof,
   without the prior consent of the Holders:

        7.1  Indebtedness.  Parent and the Company will not, and will not
   permit the Subsidiaries to, create, incur, issue, assume, guarantee or
   otherwise become liable for any Indebtedness except (a) Permitted
   Indebtedness; (b) any extension, renewal or refinancing of any Permitted
   Indebtedness (other than the Senior Debt) on such terms and conditions as
   are, on the whole, no more onerous to Parent or such Subsidiary than the
   terms and conditions of such Permitted Indebtedness on the date of such
   extension, renewal or refinancing; and (c) any replacement or refinancing
   of the Senior Debt; provided that (i) the interest rate on such
   refinancing shall be no greater than the interest rate permitted by the
   Senior Subordination Agreement, (ii) the amortization of principal on such
   refinancing shall be for no shorter period, and for no greater annual
   amounts, than the amortization provided for in the Senior Loan Agreement,
   (iii) the amount so replaced or refinanced shall be no greater than the
   maximum amount permitted to be outstanding under the Senior Loan Agreement
   on the date of such replacement or refinancing, (iv) the collateral
   security for such replacement or refinancing does not extend to assets
   other than those contemplated by the Senior Loan Agreement (and proceeds
   thereof) and (v) the other terms and conditions of such replacement or
   refinancing are, on the whole, no more onerous to the Company than the
   terms of the Senior Loan Agreement with such amendments thereto permitted
   by the Senior Subordination Agreement.  Any Permitted Indebtedness which
   is subordinated to the Senior Subordinated Obligations shall continue to
   be subordinated to the Senior Subordinated Obligations on terms and
   conditions satisfactory to the Holders.

        7.2  Limitation on Liens.  Parent and the Company will not, and will
   not permit the Subsidiaries to, incur, create, assume, or permit to exist
   any Lien upon any of its property, assets, or revenues, including, but not
   limited to, its shares of capital stock of each of its Subsidiaries,
   whether now owned or hereafter acquired, except Permitted Liens.

        7.3  Merger, Acquisition, Dissolution and Sale of Assets.  Parent and
   the Company will not, and will not permit the Subsidiaries to, (a) become
   a party to a merger or consolidation (other than the Acquisition Merger
   and any other merger permitted by the Senior Loan Agreement), (b) purchase
   or otherwise acquire all or a substantial part of the assets of any Person
   or any shares or other evidence of beneficial ownership of any Person
   (other than acquisitions permitted under the terms of the Senior Loan
   Agreement), (c) dissolve or liquidate, (d) form, acquire or permit the
   existence of any Subsidiary or Subsidiaries other than the Subsidiaries in
   existence on the date hereof and those permitted to be created under the
   terms of the Senior Loan Agreement, and (e)  sell, assign or transfer any
   of its assets, except (i) the transfer of all assets of Parent (other than
   the stock of the Company) to the Company, (ii) sales of inventory in the
   ordinary course of business, (iii) sales of other assets reasonably and in
   good faith determined by the Company to be obsolete or no longer necessary
   to the Company's business, and (iv) asset dispositions permitted by the
   Senior Loan Agreement.

        7.4  Restricted Payments. Parent and the Company will not, and will
   not permit the Subsidiaries to, at any time make or become obligated to
   make, directly or indirectly, any (a) declaration of any dividend on, or
   any other payment or distribution in respect of, any shares of capital
   stock of the Company; except (i) dividends in cash from the Company or its
   Subsidiaries to Parent to the extent necessary to permit Parent to pay the
   Senior Subordinated Obligations due and payable from Parent to each
   Purchaser, (ii) dividends from the Subsidiaries of the Company to the
   Company to the extent necessary to permit the Company to pay the Senior
   Subordinated Obligations, (iii) dividends on the Preferred Stock as
   provided in the Certificate and payments made pursuant to the Purchase
   Documents, and (iv) other dividends permitted by the Senior Loan
   Agreement, (b) except as otherwise provided for herein, any professional
   consulting or management fees or any other payments to any shareholders of
   Parent or any Subsidiary, (c) payment or distribution on account of the
   purchase, repurchase, redemption, put, call or other retirement of any
   shares of capital stock of Parent or any Subsidiary or of any warrant,
   option or other right to acquire such shares (except pursuant to the
   Purchase Documents or the Certificate or as permitted by the Senior Loan
   Agreement), or (d) payment or distribution on account of any Indebtedness
   of the Company which is subordinate to the Senior Subordinated Notes
   (except that Subsidiaries may make distributions to the Company).

        7.5  Loans and Investments.  Except for Permitted Investments, Parent
   and the Company will not, and will not permit any Subsidiary to, make any
   advance, loan, extension of credit, or capital contribution to or
   investment in, or purchase any stock, bonds, notes, debentures, or other
   securities of any Person.

        7.6  Transactions with Affiliates.  Except as contemplated by this
   Agreement and the Other Agreements, Parent and the Company will not, and
   will not permit any Subsidiaries to, enter into any transaction with any
   director, officer, employee, shareholder, or Affiliate of Parent,
   Southland or any of their respective Subsidiaries except, on prior
   approval by the Company's board of directors of the terms which shall be
   fair and reasonable and be at least as favorable as would result in a
   comparable arm's-length transaction with a Person not a director, officer,
   employee, shareholder or Affiliate of Parent, Southland or any of their
   respective Subsidiaries, as the case may be.

        7.7  Nature of Business.  Parent and the Company will not, and will
   not permit any Subsidiary to, engage in any business other than the
   businesses set forth on Schedule 4.25, or any business reasonably related
   thereto.

        7.8  Modification of Senior Loan Agreement.  Parent and the Company
   will not, and will not permit any Subsidiary to, agree or consent to any
   modification, amendment or waiver of any of the terms or provisions of the
   Senior Loan Documents without the prior written consent of the Holders
   except such amendments and waivers which can be made to the Senior Loan
   Documents without the consent of the Purchaser under the terms of the
   Senior Subordination Agreement.

        7.9  Capital Expenditure Limits.  The aggregate amount of all Capital
   Expenditures of Parent and the Subsidiaries during any Fiscal Year will
   not exceed the Capital Expenditure Limit for such Fiscal Year:


                     Period                             Amount
                     ------                             ------

       Closing Date through December 31, 1997          $440,000
       January 1, 1998 through December 31, 1998       $550,000
       January 1, 1999 through December 31, 1999       $660,000
       January 1, 2000 through December 31, 2000       $770,000
       January 1, 2001 and each Fiscal Year
         thereafter                                    $880,000

   The term "Capital Expenditure Limit" means, for the Fiscal Years set forth
   above, the sum of (i) the Dollar amount set forth in the table above
   opposite the applicable Fiscal Year (the Dollar amount as set forth for
   each Fiscal Year herein the "Yearly Limit") plus (ii) fifty percent (50%)
   of the portion of the Yearly Limit from the immediately preceding Fiscal
   Year which was not expended by Parent and its Subsidiaries for Capital
   Expenditures in such preceding Fiscal Year.  In calculating compliance
   with this Section 7.9, (a) Capital Expenditures made in a Fiscal Year
   shall first be debited against the Yearly Limit for such Fiscal Year then
   debited against the carryover of the Yearly Limit, if any, from the
   preceding Fiscal Year and (b) the aggregate amount of all payments due
   under a Capital Lease for the entire term thereof (excluding, however, the
   interest portion of capitalized lease payments) shall be considered
   expended in full on the date that the Capital Lease is entered into.

        7.10 Remuneration.  Parent and the Company will not, and will not
   permit any Subsidiary to, (a) pay any management, consulting, or similar
   fees to any shareholder or Affiliate of Parent or any Subsidiary or to any
   director, officer, employee or immediate family member of any such
   Affiliate or shareholder, except as set forth in Schedule 7.10, or (b) pay
   any compensation to the Persons identified on Schedule 7.10 in excess of
   the amounts set forth on Schedule 7.10, whether such compensation consists
   of salary, bonus, management, consulting or other fees, capital
   distributions, or other benefits or otherwise, and regardless of whether
   such compensation is paid by Parent and/or any Subsidiary or Affiliate of
   Parent.

        7.11 Modification of Employment Agreements, the Acquisition Documents
   or Non-Compete Agreements.  Parent and the Company will not, and will not
   permit any Subsidiary to, agree to any modification, amendment or waiver
   of any of the terms or provisions of the Employment Agreements, the
   Acquisition Documents or Non-Compete Agreements without the prior written
   consent of the Holders.

   VIII. EVENTS OF DEFAULT AND REMEDIES THEREFOR

        8.1  Events of Default.  The occurrence of any one or more of the
   following events shall constitute an "Event of Default":

             (a)  (i) the Company shall fail to pay when due (whether upon
   acceleration or otherwise), any principal payable under the Senior
   Subordinated Notes, (ii) the Company shall fail to pay within three (3)
   Business Days of the date due any interest payable under the Senior
   Subordinated Notes or this Agreement, or (iii) the Company, Parent or any
   Subsidiary shall fail to pay within five (5) Business Days after receipt
   of notice of failure to pay (whether by acceleration or otherwise), any
   other Senior Subordinated Obligations;

             (b)  the Company, Parent or any Subsidiary shall fail to pay
   when due (following the expiration of applicable notice and cure periods,
   if any), whether upon acceleration or otherwise, any Indebtedness
   (excluding for purposes of this Section 8.1(b) only the Senior Debt),
   individually or in the aggregate, having an unpaid principal amount in
   excess of $750,000.00;

             (c)  The Company or Parent, as the case may be, shall fail to
   perform or observe any (i) obligation, agreement, covenant, term or
   condition (other than the obligation to make payment) contained (A) in the
   Senior Subordinated Notes or in Section 6.20 or Article VII of this
   Agreement; (B) in Section 6.1 of this Agreement, and such default is not
   cured or otherwise waived within fifteen (15) days after written notice
   thereof is provided to Parent or Company, as the case may be, or (C) in
   this Agreement (excluding the obligations, agreements, covenants, terms or
   conditions governed by Sections 8.1(a), 8.1(c)(i)(A) and (B) above), and
   such default is not cured or otherwise waived within thirty (30) days
   after written notice thereof is provided to Parent or Company, as the case
   may be or (ii) material obligation, agreement, covenant, term or condition
   (other than the obligation to make payment which is covered by Section
   8.1(a) above) contained in the Other Agreements and such default is not
   cured or otherwise waived within thirty (30) days after written notice
   thereof is provided to Parent or Company, as the case may be;

             (d)  Parent, the Company or any Subsidiary shall fail in any
   material respect to comply with any material agreement, indenture,
   mortgage, deed of trust, or other agreement (excluding the Senior Loan
   Documents and the Other Agreements) binding on it or affecting its
   properties or business, unless a waiver or consent has been obtained
   therefor;

             (e)  any representation, warranty or other material information
   whatsoever made or provided by the Company, Parent or any Subsidiary in
   connection with this Agreement or the Other Agreements or otherwise to
   induce each Purchaser to purchase its Senior Subordinated Note, Preferred
   Stock or Warrants was incorrect or misleading in any material respect,
   when made;

             (f)  the Parent or any Subsidiary shall become subject to an
   Event of Bankruptcy;

             (g)  any judgment or order for payment of money shall be
   rendered against Parent, the Company or any Subsidiary which exceeds an
   uninsured amount of $750,000.00 and either (i) enforcement proceedings
   shall have been commenced by any creditor upon such judgment or order, or
   (ii) there shall be a 
    period of thirty (30) consecutive days during which a stay of enforcement
   of such judgment or order, by reason of a pending appeal or otherwise,
   shall not be in effect;

             (h)  the Senior Debt shall have been accelerated or the holders
   thereof shall have commenced an action to foreclose on the liens securing
   the Senior Debt;

             (i)  Parent shall cease to directly own and control one hundred
   percent (100%) of the aggregate number of shares of capital stock of the
   Company (provided, that the fact that Thomas J. Gilligan has a Lien on the
   shares of capital stock of Southland which are held in treasury shall not
   result in the occurrence of an Event of Default under this clause (i)
   unless Thomas J. Gilligan forecloses on or otherwise causes such treasury
   shares to be issued out of the treasury);

             (j)  the occurrence of a material change in ownership in Parent
   (for purposes of this subsection a "change in ownership" means the
   circumstance that (i) F-Jotan, L.L.C. shall own, directly or indirectly,
   five percent (5%) less than (A) the Registrable Securities (as defined in
   the Purchase Agreement) so owned by such party on the Closing Date or (B)
   the number of shares of issued and outstanding voting stock of Parent
   (without giving effect to the issuance of any shares of Common Stock under
   the Warrants or the conversion of the Series A Preferred Stock) so owned
   by such party on the Closing Date, (ii) Rice or the Southland Purchasers
   shall cease to beneficially own or control, directly or indirectly, at
   least seventy percent (70%) of the issued and outstanding shares of
   capital stock of the Company (determined on a fully diluted basis) owned
   by Rice or the Southland Purchasers, as the case may be, on the Closing
   Date, or (iii) Rice shall not have the legal right or ability, directly or
   through its Subsidiaries, to elect a majority of the members of the board
   of directors of Parent); or

             (k)  Parent, the Company or any Subsidiary shall revoke or
   attempt to revoke its guaranty agreement executed in favor of each
   Purchaser, or shall repudiate its liability thereunder or shall fail to
   comply in any material respect with the terms thereof.

        8.2  Remedies of Holders upon Occurrence of Event of Default.  When
   any Event of Default described in Section 8.1 above, other than any Event
   of Default described in clause (f) thereof, has occurred and is
   continuing, the majority-in-interest of the Holders may (in addition to
   any other right, power or remedy permitted to the Holders by law) declare
   the entire amount of the Senior Subordinated Obligations, including,
   without limitation, the entire principal, Prepayment Fee (if any) and all
   interest accrued then outstanding under the Senior Subordinated Notes, to
   be, and the same shall thereupon become, forthwith due and payable,
   without any presentment, demand, protest, notice of default, notice of
   intention to accelerate, notice of acceleration or other notice of any
   kind, all of which are hereby expressly waived, and in such event the
   Company shall (subject to the terms of the Senior Subordination Agreement)
   forthwith pay to the Holders an amount equal to one hundred percent (100%)
   of the amount thereof.  When any Event of Default described in clause (f)
   of Section 8.1 above shall occur, all of the Senior Subordinated
   Obligations, including, without limitation, the entire principal,
   Prepayment Fee (if any), and all accrued interest then outstanding under
   the Senior Subordinated Notes, shall thereupon be forthwith due and
   payable without any presentment, demand, protest, notice of default,
   notice of intention to accelerate, notice of acceleration or other notice
   of any kind (including any notice by the Holders of the Senior
   Subordinated Notes), all of which are hereby expressly waived by Parent
   and the Company, and the Company will (subject to the terms of the Senior
   Subordination Agreement) forthwith pay to each Holder an amount equal to
   one hundred percent (100%) of the amount thereof.  The provisions of this
   Section 8.2 are solely for the benefit of the Holders and neither the
   Company nor any other Person shall have any rights with respect to or be
   entitled to enforce this Section 8.2.  If, at any time or times, Parent,
   the Company or any Subsidiary shall be in default under the Senior
   Subordinated Notes, this Agreement or any Other Agreement, Rice (so long
   as it is a Holder) may act as the representative of and, as such, shall
   consult with the other Holders in connection with any action to be taken
   with respect to such default and/or with respect to the enforcement of
   their rights and remedies. All expenses incurred and all amounts realized
   shall be apportioned among the Holders, pro rata, and reimbursed by the
   Company as provided in this Agreement.

        8.3  Annulment of Acceleration.  The provisions of the foregoing
   Section 8.2 are subject to the condition that, if all or any part of the
   Senior Subordinated Obligations have been declared or have otherwise
   become immediately due and payable by reason of the occurrence of any
   Event of Default, Rice, with the prior written approval of the majority-
   in-interest of the Holders may (so long as Rice is a Holder), by written
   instrument delivered to the Company (an "Annulment Notice"), rescind and
   annul such declaration and the consequences thereof as to the Senior
   Subordinated Notes, provided that (a) at the time such Annulment Notice is
   delivered no judgment or decree has been entered for the payment of any
   monies due pursuant to such Senior Subordinated Obligations in connection
   therewith, and (b) all arrears of interest and all other sums payable on
   such Senior Subordinated Obligations in connection therewith (except any
   principal, interest or Prepayment Fee which has become due and payable
   solely by reason of such declaration under Section 8.2 hereof) shall have
   been duly paid or deferred by the Holders; and provided further, that no
   such rescission and annulment shall extend to or affect any subsequent
   default or Event of Default or impair any right consequent thereto, and
   shall not be deemed a waiver of the Event of Default giving rise to the
   acceleration unless specifically waived in writing by the majority-in-
   interest of the Holders.

        8.4  Payment of Senior Subordinated Obligations.  Subject to the
   terms of the Senior Subordination Agreement, each Purchaser shall have the
   right, which is absolute and unconditional, to receive payment of the
   principal of and interest on its Senior Subordinated Note and payment of
   all other Senior Subordinated Obligations on the date when due and, upon
   the occurrence and continuance of an Event of Default, Rice shall have the
   right, which is absolute and unconditional, to institute suit against
   Parent, the Company and/or any Subsidiary on behalf of the Holders for the
   enforcement of any such payment.  Such rights shall not be impaired
   without the Holder's prior written consent.

        8.5  Remedies.  Subject to the terms of the Senior Subordination
   Agreement, if any Event of Default shall occur and be continuing, Rice, on
   behalf of each and every Holder, may exercise any right or remedy it has
   at law, in equity or under this Agreement or any Other Agreement.  No
   right or remedy conferred upon or reserved to Rice or any other Purchaser
   under this Agreement or any Other Agreement is intended to be exclusive of
   any other right or remedy, and every right and remedy shall be cumulative
   and in addition to every other right or remedy given hereunder or now or
   hereafter existing under any applicable law.  Every right and remedy given
   by this Agreement or by applicable law to Rice or any other Holder may be
   exercised from time to time and as often as may be deemed expedient by
   Rice or such other Holder.

        8.6  Conduct No Waiver.  No course of dealing on the part of any
   Purchaser, nor any delay or failure on the part of any Purchaser to
   exercise any of its rights, shall operate as a waiver of such right or
   otherwise prejudice such Purchaser's rights, powers and remedies.  If the
   Company fails to pay, when due, the principal of, Prepayment Fee (if any)
   or the interest on, the Senior Subordinated Notes, or fails to comply with
   any other provision of this Agreement, the Company shall pay to the
   Holder, to the extent permitted by law, on demand, such further amounts as
   shall be sufficient to cover the cost and expenses, including, but not
   limited to, reasonable attorney's fees, incurred by such Purchaser in
   collecting any sums due on the Senior Subordinated Note or in otherwise
   enforcing any of such Purchaser's rights.

   IX.  SUBORDINATION

        Notwithstanding any provision in this Agreement to the contrary, the
   Indebtedness evidenced by the Senior Subordinated Notes shall be
   subordinate in right of payment to all regularly scheduled payments of
   principal and interest with respect to the Senior Debt, and any
   Purchaser's rights and remedies hereunder shall be subordinate to the
   rights and remedies of the Senior Lender, in accordance with the terms of
   the Senior Subordination Agreement.  Nothing contained in this Article IX
   or elsewhere in this Agreement, in the Senior Subordinated Notes or the
   Senior Subordination Agreement is intended to or shall impair, as between
   the Company and Purchaser, the obligations of the Company, which are
   absolute and unconditional, to pay to Purchaser the principal of,
   Prepayment Fee (if any) and interest on the Senior Subordinated Notes and
   all other Senior Subordinated Obligations as and when the same shall
   become due and payable in accordance with their terms, or is intended to
   or shall affect the relative rights of Purchaser and creditors of the
   Company other than the holders of the Senior Debt, nor shall anything
   herein or therein prevent Purchaser from exercising all remedies otherwise
   permitted by applicable law upon an Event of Default under this Agreement.

   X.   FORM OF SENIOR SUBORDINATED NOTE, REGISTRATION, TRANSFER AND
        REPLACEMENT

        10.1 Form of Senior Subordinated Notes.  The Senior Subordinated
   Notes initially delivered under this Agreement will be a fully registered
   note in the form attached hereto as Exhibit A.  The Senior Subordinated
   Notes are issuable only in fully registered form in denominations of at
   least $1,000,000 (or the then-remaining outstanding balance thereof, if
   less than $1,000,000).

        10.2 Senior Subordinated Notes Register.  The Company shall cause to
   be kept at the principal office a register for the registration and
   transfer of the Senior Subordinated Notes.  The names and addresses of
   each Holder of the Senior Subordinated Notes, the transfer thereof and the
   names and addresses of the transferees of the Senior Subordinated Notes
   shall be recorded in such register.

        10.3 Issuance of New Senior Subordinated Notes upon Exchange or
   Transfer.  Upon surrender for exchange or registration of transfer of any
   Senior Subordinated Note at the office of the Company designated for
   notices in accordance with Section 12.3 hereof, the Company shall execute
   and deliver, at its expense, one or more new Senior Subordinated Notes of
   any authorized denomination requested by the Holder of the surrendered
   Senior Subordinated Note, each dated the date to which interest has been
   paid on the Senior Subordinated Note so surrendered (or, if no interest
   has been paid, the date of the surrendered Senior Subordinated Note), but
   in the same aggregate unpaid principal amount as the surrendered Senior
   Subordinated Note, and registered in the name of such Person or Persons as
   shall be designated in writing by such Holder.  Every Senior Subordinated
   Note surrendered for registration of transfer shall be duly endorsed, or
   be accompanied by a written instrument of transfer duly executed, by the
   Holder of such Senior Subordinated Note or by his attorney duly authorized
   in writing.

        10.4 Replacement of Senior Subordinated Notes.  Upon receipt of
   evidence satisfactory to the Company of the loss, theft, mutilation or
   destruction of a Senior Subordinated Note and, in the case of any such
   loss, theft or destruction, upon delivery of a bond of indemnity in such
   form and amount as shall be reasonably satisfactory to the Company or, in
   the event of such mutilation upon surrender and cancellation of such
   Senior Subordinated Note, the Company, without charge to the Holder
   thereof, will make and deliver a new Senior Subordinated Note of like
   tenor and the same series in lieu of such lost, stolen, destroyed or
   mutilated Senior Subordinated Note.  If any such lost, stolen or destroyed
   Senior Subordinated Note is owned by any Purchaser or any other Holder
   whose credit is satisfactory to the Company, then the affidavit of an
   authorized officer of such owner setting forth the fact of loss, theft or
   destruction and of its ownership of the Senior Subordinated Note at the
   time of such loss, theft or destruction shall be accepted as satisfactory
   evidence thereof, and no further indemnity shall be required as a
   condition to the execution and delivery of a new Senior Subordinated Note,
   other than a written agreement of such owner (in form reasonably
   satisfactory to the Company) to indemnify the Company.

   XI.  INTERPRETATION OF AGREEMENT

        11.1 Certain Terms Defined.  When used in this Agreement, the terms
   set forth below are defined as follows:

        "Acquisition" means the purchase of all the outstanding shares of
        capital stock of Southland and certain assets of Southland Container,
        Inc. pursuant to the Acquisition Documents.

        "Acquisition Agreement" means that certain Share Purchase Agreement
        dated as of December 19, 1996, by and among Parent, Southland, Lester
        G. Gegenheimer, John L. Sanders, Jr. and William P. Blincoe, as the
        same has been (i) assigned to the Company pursuant to that certain
        Assignment of Rights Under Share Purchase Agreement dated as of
        February 28, 1997, by and among Southland, Lester G. Gegenheimer,
        John L. Sanders, Jr., William P. Blincoe, Parent and the Company,
        (ii) amended by that certain Agreement Regarding the Purchase Price
        Adjustment, Bonus and Additional Consideration dated as of February
        28, 1997, by and among Parent, the Company, Lester G. Gegenheimer,
        John L. Sanders, Jr., William P., Blincoe, III, and Southland, and
        (iii) further amended or otherwise modified as of the Closing Date.

        "Acquisition Documents" means the Acquisition Agreement and the
        agreements, documents and instruments executed in connection
        therewith or contemplated thereby, including, without limitation, the
        Non-Compete Agreements and the Minority Shareholder Agreements, and
        all amendments thereto.

        "Acquisition Merger" means the merger of the Company with and into
        Southland, with Southland as the surviving Person.

        "Affiliate" means any Person directly or indirectly controlling,
        controlled by, or under common control with, the Person in question. 
        A Person shall be deemed to control a corporation if such Person
        possesses, directly or indirectly, the power to direct or cause the
        direction of the management and policies of such corporation, whether
        through the ownership of voting securities, by contract, or
        otherwise.

        "Agreement" means this Note Purchase Agreement, including all
        schedules and exhibits hereto, as the same may be modified,
        supplemented, extended and/or amended from time to time.

        "Annulment Notice" is defined in Section 8.3.

        "Business Day" means each day of the week except Saturdays, Sundays,
        and days on which banking institutions are authorized by law to close
        in the States of Florida and Texas.

        "Capital Expenditures" means, for any period, all expenditures of
        Parent and its Subsidiaries which are classified as capital
        expenditures in accordance with GAAP including all such expenditures
        associated with Capital Lease Obligations but excluding, to the
        extent included, any such expenditures made in connection with an
        acquisition funded with the proceeds of the advances made or held by
        any Senior Lender pursuant to Section 3.1 of the Senior Loan
        Agreement.

        "Capital Lease Obligations" means, as to any Person, the obligations
        of such Person to pay rent or other amounts under a lease of (or
        other agreement conveying the right to use) real and/or personal
        property, which obligations are required to be classified and
        accounted for as a capital lease on a balance sheet of such Person
        under GAAP.  For purposes of this Agreement, the amount of such
        Capital Lease Obligations shall be the capitalized amount thereof,
        determined in accordance with GAAP.

        "Casualty Event" means any of the following events:  (a) the
        destruction of any Property or other tangible assets of Parent or any
        of its Subsidiaries, or the occurrence of damage to such Property or
        assets, which in each case renders the repair or replacement thereof
        uneconomic; (b) the requisition of title to such Property or assets
        by any governmental authority for a period of more than 6 months;
        (c) the constructive total loss with respect to such Property or
        assets; or (d) the loss of quiet title to any real property owned or
        leased by Parent or its Subsidiaries to the extent that such loss
        constitutes an insurable loss or otherwise interferes with the normal
        and customary use of such real estate in the ordinary course of
        business.

        "Certificate" is defined in Article I of the Purchase Agreement.

        "Closing Date" means the date on which all of the conditions stated
        in Article V of this Agreement have been met to each Purchaser's
        satisfaction and the purchase price for the Senior Subordinated Notes
        has been paid, but in any event not later than March 4, 1997.

        "Code" means the Internal Revenue Code of 1986, as amended and in
        effect from time to time, and the regulations promulgated thereunder.

        "Common Stock" means the $.01 par value common stock of Parent.

        "Company" means SHC Acquisition Corp., a Florida corporation, who
        will merge with and into Southland Holding Company, a Texas
        corporation and, unless the context requires otherwise, shall include
        its Subsidiaries, if any.

        "Company Guaranty" means the guaranty of Company in favor of each
        Purchaser, in form and substance satisfactory to each Purchaser, as
        the same may be amended or otherwise modified from time to time.

        "Consolidated Net Worth" means, at any particular time, all amounts
        which, in conformity with GAAP, would be included as stockholders'
        equity on a consolidated balance sheet of Parent and the
        Subsidiaries.

        "Controlled Group" means any group of organizations within the
        meaning of Section 414(b), (c), (m) or (o) of the Code of which
        Parent or any of its Subsidiaries is a member.

        "Dollars" and "$" mean lawful money of the United States of America.

        "EBITDA" means, for any period and any Person, the total of the
        following each calculated without duplication for such Person on a
        consolidated basis for such period:  (a) Net Income; (b) any
        provision for (or less any benefit from) income or franchise taxes
        included in determining Net Income; plus (c) interest expense
        deducted in determining Net Income; plus (d) amortization and
        depreciation expense deducted in determining Net Income; plus (e)
        other noncash charges deducted in determining consolidated net income
        and not already deducted in accordance with clause (d) above or
        clauses (b) and (c) of the definition of Net Income.

        "Employee Benefit Plan" means any employee  benefit plan, as defined
        in Section 3(3) of ERISA, which is, previously has been or will be
        established or maintained by any member of a Controlled Group.

        "Employment Agreements" means (i) those certain Employment Agreements
        by and between (A) Shea E. Ralph and Parent, dated as of November 22,
        1996, as amended, modified or supplemented from time to time,
        (B) David Freeman and Parent, dated as of November 22, 1996, as
        amended, modified or supplemented from time to time, (C) Alton E.
        Thompson and Parent, dated as of November 22, 1996, as amended,
        modified or supplemented from time to time, and (ii) any other
        employment or non-compete agreement now existing or hereafter entered
        into by and between Parent or any Subsidiary and any other officer or
        employee of Parent or any Subsidiary, including, without limitation,
        such employment agreements that may be entered into by Parent or the
        Company as a result of the Acquisition or the transactions
        contemplated hereby or thereby, (iii) consulting agreements to which
        Parent or the Company may be a party, including without limitation,
        such agreements with Fairview Capital, L.L.C. or its affiliates and
        officers of any thereof, including Jeremiah M. Callahan, and (iv) all
        non-compete or buy-sell agreements by and between Parent, Company or
        any Subsidiary of either thereof, and any employee, officer or
        director of any thereof, together, in each case, with all renewals,
        modifications, amendments or supplements thereto (each such agreement
        at all times to be in form and substance satisfactory to the
        Holders).

        "Environmental Laws" means all federal, state, or local laws,
        ordinances, rules, regulations, interpretations and orders of courts
        or administrative agencies or authorities relating to pollution or
        protection of the environment (including, without limitation, ambient
        air, surface water, ground water, land surface, and subsurface
        strata), and other laws relating to (a) Polluting Substances or
        (b) the manufacture, processing, distribution, use, treatment,
        handling, storage, disposal, or transportation of Polluting
        Substances.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
        amended and in effect from time to time, and the regulations
        promulgated thereunder.

        "Event of Bankruptcy" means any of (a) the filing by a Person of a
        voluntary petition in bankruptcy under any provision of any
        bankruptcy law or a petition to take advantage of any insolvency act,
        (b) the admission in writing by Parent or any Subsidiary of its
        inability to pay its debts generally as they become due, (c) the
        appointment of a receiver or receivers for all or a material part of
        a Person's assets with the consent of such Person, (d) the filing of
        any bankruptcy, arrangement or reorganization petition by or, with
        the consent of a Person, against such Person under any provision of
        any bankruptcy law, (e) a receiver, liquidator or trustee of a Person
        or a substantial part of its assets shall be appointed pursuant to
        the Federal Bankruptcy Code by the order of a court of competent
        jurisdiction which shall not be dismissed or stayed within thirty
        (30) days, or (f) an involuntary petition to reorganize or liquidate
        a Person pursuant to the Federal Bankruptcy Code shall be filed
        against such Person and shall not be dismissed or stayed within
        thirty (30) days.

        "Event of Default" is defined in Section 8.1.

        "Excess Interest" is defined in Section 2.8.

        "Fiscal Year" means a twelve (12) month period ending December 31.

         "Fiscal Quarters" means the three (3) month periods falling in each
         Fiscal Year ending March 31, June 30, September 30 and December 31.

        "Fixed Charges" means, for any period, the total of the following for
        Parent and the Subsidiaries calculated on a consolidated basis
        without duplication for such period: (A) interest expense; plus (B)
        cash federal and state income taxes paid; plus (C) scheduled
        amortization of Indebtedness paid or payable (excluding, to the
        extent included, nonpermanent principal repayments under the
        Revolving Loans (as defined in the Senior Loan Agreement)); plus (C)
        the Dollar amount paid in connection with repurchases of stock,
        options or warrants consummated in accordance with Section 12.4 of
        the Senior Loan Agreement.

        "GAAP" means generally accepted accounting principles, applied on a
        consistent basis, as set forth in Opinions of the Accounting
        Principles Board of the American Institute of Certified Public
        Accountants and/or in statements of the Financial Accounting
        Standards Board and/or their respective successors and which are
        applicable in the circumstances as of the date in question, provided,
        that neither Parent nor any Subsidiary may change the use or
        application of any accounting method, practice or principle without
        the prior written consent of the Holders, which consent may require
        that an adjustment be made to any and all the financial covenants and
        the capital expenditure covenant set forth herein.  Accounting
        principles are applied on a "consistent basis" when the accounting
        principles observed in a current period are comparable in all
        material respects to those accounting principles applied in a
        preceding period.

        "Holder" when used in reference to the Senior Subordinated Notes
        and/or the Senior Subordinated Obligations, means the Person or
        Persons who, at the time of determination, is the lawful owner of all
        or a portion of each Senior Subordinated Note or an obligee of all or
        a portion of the Senior Subordinated Obligations.  Unless otherwise
        provided in this Agreement, in each instance that the Holders are
        required to request or consent in concert to or otherwise express
        approval of an action, the Holders will be deemed to have requested
        or consented to such action  or given such approval if the Holders of
        a majority-in-interest of the Senior Subordinated Notes so request,
        consent or approve.

        "HSR" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
        as amended.

        "Impositions" is defined in Section 6.9.

        "Indebtedness" means for any Person:  (a) all indebtedness, whether
        or not represented by  bonds, debentures, notes, securities, or other
        evidences of indebtedness, for the repayment of money borrowed,
        (b) all indebtedness representing deferred payment of the purchase
        price of property or assets, (c) all indebtedness under any lease
        which, in conformity with GAAP, is required to be capitalized for
        balance sheet purposes and leases of property or assets made as a
        part of any sale and lease-back transaction if required to be
        capitalized, (d) all indebtedness under guaranties, endorsements,
        assumptions, or other contractual obligations, including any letters
        of credit, or the obligations in respect of, or to purchase or
        otherwise acquire, indebtedness of others, (e) all indebtedness
        secured by a Lien existing on property owned, subject to such Lien,
        whether or not the indebtedness secured thereby shall have been
        assumed by the owner thereof, (f) trade accounts payable more than
        one hundred twenty (120) days past due, and (g) all amendments,
        renewals, extensions, modifications and refundings of any
        indebtedness or obligations referred to in clauses (a), (b), (c),
        (d), (e) or (f).

        "Intellectual Property" means all patents, patent rights, patent
        applications, licenses, inventions, trade secrets, know-how,
        proprietary techniques (including processes and substances),
        trademarks, service marks, trade names and copyrights.

        "Lien" means any lien, mortgage, security interest, tax lien, pledge,
        encumbrance, financing statement, or conditional sale or title
        retention agreement, or any other interest in property designed to
        secure the repayment of Indebtedness or any other obligation, whether
        arising by agreement, operation of law, or otherwise.

        "Material Adverse Effect" means (a) a material adverse effect upon
        the business, operations, properties, assets or condition (financial
        or otherwise) of Parent or any Subsidiary or (b) the impairment of
        the ability of any party to perform its obligations under this
        Agreement or any of the Other Agreements to which it is a party or of
        any Purchaser to enforce or collect any of the Senior Subordinated
        Obligations.  In determining whether any individual event would
        result in a Material Adverse Effect, notwithstanding that such event
        does not of itself have such effect, a Material Adverse Effect shall
        be deemed to have occurred if the cumulative effect of such event and
        all other then existing events would result in a Material Adverse
        Effect.

        "Maximum Rate" is defined in Section 2.8.

        "Minority Shareholder Agreements" means, collectively, (a) that
        certain Termination of Stock Option and Repurchase Agreement dated as
        of February 28, 1997, by and among Southland Container Inc. of
        Maryland, Daniel Bernard Lyons and Earl Carroll Smith, (b) that
        certain Stock Purchase Agreement dated February 28, 1997, by and
        between the Company and Daniel Bernard Lyons, (c) those certain
        employment agreements dated February 28, 1997, by and between the
        Company and each of (i) Frederick Brown, (ii) Daniel Bernard Lyons,
        (iii) Gary R. Zimmerman, (iv) Charles J. Cook, (v) Robert W. Menzel,
        Jr., (vi) Earl Carroll Smith and (vii) John Becker.

        "Net Income" means, for any period and any Person, such Person's
        consolidated net income (or loss), but excluding:  (a) the income of
        any other Person (other than its subsidiaries) in which such Person
        or any of it subsidiaries has an ownership interest, unless received
        by such Person or its subsidiary in a cash distribution; (b) any
        after-tax gains or losses attributable to asset disposition; and (c)
        to the extent not included in clauses (a) and (b) above, any
        after-tax extraordinary, non-cash or nonrecurring gains or losses.

        "Non-Compete Agreements" means collectively, those certain Non-
        Compete Agreements, dated as of February 28, 1997 between Parent and
        each of (a) Lester G. Gegenheimer, (b) John L. Sanders, Jr. and (c)
        William P. Blinco, and any other non-compete agreement now or
        hereafter entered into by and between Parent, the Company or any of
        their Subsidiaries and any officer of such parties, together with all
        renewals, modifications, amendments or supplements thereto.

        "Operating Cash Flow" means, for any period, the total of the
        following for Parent and the Subsidiaries calculated on a
        consolidated basis without duplication for such period: (a) EBITDA;
        minus (b) all Capital Expenditures which are not financed with
        Indebtedness of the Company (including Capital Lease Obligations)
        incurred after the Closing Date not to exceed $1,500,000 in the
        aggregate at any time outstanding secured by purchase money Liens
        permitted by Section 12.2(g) of the Senior Loan Agreement but
        including Capital Expenditures financed with proceeds of the
        Revolving Loans (as defined in the Senior Loan Agreement).

        "Other Agreements" means the Senior Subordinated Notes, the Purchase
        Documents, each Subsidiary Guaranty and all other agreements,
        instruments and documents (including, without limitation, notes,
        guarantees, powers of attorney, consents, assignments, contracts,
        notices, subordination agreements and all other written matter), and
        all renewals, modifications and extensions thereof, whether
        heretofore, now or hereafter executed by or on behalf of Parent
        and/or any Subsidiary of the Company and delivered to and for the
        benefit of any Purchaser or any Person participating with any
        Purchaser in the Senior Subordinated Notes with respect to this
        Agreement or any of the transactions contemplated by this Agreement. 
        The Other Agreements shall not include any Senior Loan Documents. 

        "Parent" means Jotan, Inc., a Florida corporation and, unless the
        context requires otherwise, shall include its Subsidiaries, if any.

        "Parent Guaranty" means the guaranty of Parent in favor of each
        Purchaser, in form and substance satisfactory to each Purchaser, as
        the same may be amended or otherwise modified from time to time.

        "Pension Plan" means any employee pension benefit plan, as defined in
        Section 3(2) of ERISA, which is, was or will be established or
        maintained by any member of the Controlled Group.

        "Permitted Indebtedness" means (a) any Indebtedness in favor of the
        Senior Lender under the Senior Loan Agreement and created pursuant
        thereto, (b) any Indebtedness in favor of any Holder and/or the Other
        Agreements and created pursuant thereto, (c) purchase money
        Indebtedness of the Company (including Capital Lease Obligations)
        incurred after the Closing Date not to exceed $1,500,000 in the
        aggregate at any time outstanding secured by purchase money Liens
        permitted hereunder, subject to the limitations placed on Capital
        Expenditures in Section 7.9, (d) any Indebtedness of a Subsidiary to
        the Company permitted by the Senior Loan Agreement; provided that (i)
        the proceeds of such Indebtedness shall be used to finance the
        working capital requirements of such Subsidiary and (ii) such
        Indebtedness shall have such other terms and conditions as the
        Purchaser may reasonable require, (e) the other Indebtedness set
        forth on Schedule 11.1(a) and approved by the Holders, (f) guaranties
        by Parent or any Subsidiary of such Indebtedness and (g) any other
        Indebtedness permitted by the Senior Loan Agreement.

        "Permitted Investments" means the following:

             (a)  securities issued or directly and fully guaranteed or
        insured by the United States Government or any agency or
        instrumentality thereof (provided that the full faith and credit of
        the United States Government is pledged in support thereof), having
        maturities of not more than twelve (12) months from the date of
        acquisition;

             (b)  time deposits and certificates of deposit (i) of any
        commercial bank incorporated in the United States of recognized
        standing having capital and surplus in excess of $100,000,000 with
        maturities of not more than twelve months from the date of
        acquisition or (ii) which are fully insured by the Bank Insurance
        Fund with maturities of not more than twelve (12) months from the
        date of acquisition;

             (c)  commercial paper issued by any Person incorporated in the
        United States rated at least A-1 or the equivalent thereof by
        Standard & Poor's Corporation or at least P-1 or the equivalent
        thereof by Moody's Investors Service, Inc. and in each case maturing
        not more than twelve (12) months after the date of acquisition;

             (d)  investments in money market funds substantially all of
        whose assets are comprised of securities of the types described in
        clauses (a) through (c) above; or

             (e)  advances, loans, extensions of credit or capital
        contributions and investments permitted by the Senior Loan Agreement.


        "Permitted Liens" means (a) Liens in favor of the Senior Lender under
        the Senior Loan Agreement created in accordance with the terms
        thereof as in effect on the date hereof, (b) Liens securing purchase
        money Indebtedness incurred to finance the acquisition of capital
        assets by the Company, subject to the limitations placed on Capital
        Expenditures in Section 7.9 hereof, but only so long as (i) such Lien
        attaches only to the asset so financed, (ii) the Indebtedness secured
        by such Lien does not exceed one hundred percent (100%) of the
        purchase price, including installation and freight, of the asset so
        financed and (iii) no Event of Default or Potential Default has
        occurred and is continuing, (c) Liens for property taxes not yet due,
        (d) materialmen's, mechanics', worker's, repairmen's, employees' or
        other like Liens arising against the Company in the ordinary course
        of business, in each case which are either not delinquent or are
        being contested in good faith and by appropriate actions or
        proceedings conducted with due diligence and for the payment of which
        adequate reserves in accordance with GAAP have been established with
        respect thereto, (e) deposits to secure payment of worker's
        compensation, unemployment insurance or other social security
        benefits and (f) Liens disclosed on Schedule 11.1(b) and replacements
        of such Liens so long as such Lien does not extend beyond the
        property or asset then subject to such Lien and (g) other Liens
        permitted by the Senior Loan Agreement.

        "Person" means any individual, sole proprietorship, corporation,
        business trust, unincorporated organization, association, company,
        partnership, joint venture, governmental authority (whether a
        national, federal, state, county, municipality or otherwise, and
        shall include without limitation any instrumentality, division,
        agency, body or department thereof), or other entity.

        "Polluting Substances" means all pollutants, contaminants, chemicals,
        or industrial, toxic or hazardous substances or wastes and shall
        include, without limitation, any flammable explosives, radioactive
        materials, oil, hazardous materials, hazardous or solid wastes,
        hazardous or toxic substances or related materials defined in the
        Comprehensive Environmental Response, Compensation and Liability Act
        of 1980, the Superfund Amendments and Reauthorization Act of 1986,
        the Resource Conservation and Recovery Act of 1976, the Hazardous and
        Solid Waste Amendments of 1984, and the Hazardous Materials
        Transportation Act, as any of the same are hereafter amended, and in
        the regulations adopted and publications promulgated thereto;
        provided, in the event any of the foregoing Environmental Laws is
        amended so as to broaden the meaning of any term defined thereby,
        such broader meaning shall apply subsequent to the effective date of
        such amendment and, provided, further, to the extent that the
        applicable laws of any state establish a meaning for "hazardous
        substance," "hazardous waste," "hazardous material," "solid waste,"
        or "toxic substance" which is broader than that specified in any of
        the foregoing Environmental Laws, such broader meaning shall apply.

        "Potential Default" means the occurrence of any condition or event
        which, with the passage of time or giving of notice or both, would
        constitute an Event of Default.

        "Preferred Stock" means, collectively, the $0.01 par value Series A
        Convertible Preferred Stock and the $0.01 par value Series B
        Redeemable Preferred Stock of Parent.

        "Prepayment Fee" is defined in Section 2.2 and includes any
        Prepayment Fee arising as a result of the Holders' exercise of their
        rights and remedies under Section 8.2.

        "Prior Target" means all Targets acquired or whose assets have been
        acquired in an acquisition permitted under the terms of the Senior
        Loan Agreement.

        "Property" means all real property owned, leased or operated by
        Parent or any Subsidiary thereof.

        "Purchase Documents" means, collectively, (a) the Warrants, (b) the
        Preferred Stock and Warrant Purchase Agreement dated as of February
        28, 1997, executed by and between Parent and each Purchaser and the
        other parties names therein, with respect to the issuance to each
        Purchaser of the Warrants and the issuance to each Purchaser of its
        Preferred Stock, (c) the Preferred Stock, and (d) the Shareholder
        Agreement dated as of February 28, 1997 executed by each Purchaser,
        Parent and the other parties named therein, as each of the foregoing
        may be amended from time to time.

        "Purchaser" means collectively and individually Rice and the
        Southland Purchasers, together with all of their respective
        transferees, successors and assigns of all or any portion of the
        Senior Subordinated Notes or the Senior Subordinated Obligations and
        any nominees on whose behalf any of the foregoing purchase or
        otherwise acquire any of such Indebtedness of the Company, and shall
        include, but not be limited to, each and every "Holder" as defined
        herein.

        "Reportable Event" means (i) any of the events set forth in Sections
        4043(b) (other than a merger, consolidation or transfer of assets in
        which no Pension Plan involved has any unfunded benefit liabilities),
        4068(f) or 4063(a) of ERISA, (ii) any event requiring any member of
        the Controlled Group to provide security under Section 401(a)(29) of
        the Code, or (iii) any failure to make payments required by
        Section 412(m) of the Code.

        "Securities" means any stock, shares, options, warrants, voting trust
        certificates, or other instruments evidencing an ownership interest
        or a right to acquire an ownership interest in a Person or any bonds,
        debentures, notes or other evidences of indebtedness, secured or
        unsecured.

        "Senior Agent" means Banque Paribas, a bank organized under the laws
        of France, as agent for the Senior Lenders, and its successors and
        assigns.

        "Senior Debt" shall have the same meaning as set forth in the Senior
        Subordination Agreement.

        "Senior Loan Documents" means the Senior Loan Agreement, the "Loan
        Documents" (as defined in the Senior Loan Agreement) and the
        agreements, documents and instruments executed in connection
        therewith or contemplated thereby, and all amendments thereto.

        "Senior Lender" means individually and collectively, as the context
        requires, the Persons who are now or may from time to time become
        lenders under the Senior Loan Agreement, and any Person or Persons
        who replaces or refinances the Senior Debt under the terms set forth
        in Section 7.1(c).

        "Senior Loan Agreement" means the Credit Agreement by and among
        Parent, the Company, the Senior Agent and the Senior Lender, dated as
        of the February 28, 1997, as amended in accordance with the express
        provisions of the Senior Subordination Agreement, and all documents
        and instruments delivered pursuant thereto in connection with the
        loans and advances made thereunder.

        "Senior Subordinated Notes" means the term promissory notes issued to
        each Purchaser pursuant to this Agreement, together with all
        renewals, modifications, extensions, substitutions and replacements
        thereof.

        "Senior Subordinated Obligations" means and includes any and all
        Indebtedness and/or liabilities of Parent and any Subsidiary to each
        Purchaser of every kind, nature and description, direct or indirect,
        secured or unsecured, joint, several, joint and several, absolute or
        contingent, due or to become due, now existing or hereafter arising,
        under this Agreement or any Other Agreement (regardless of how such
        Indebtedness or liabilities arise or by what agreement or instrument
        they may be evidenced or whether evidenced by any agreement or
        instrument) and all obligations of Parent and any Subsidiary to each
        Purchaser to perform acts or refrain from taking any action under any
        of the aforementioned documents, together with all renewals,
        modifications, extensions, increases, substitutions or replacements
        of any of such Indebtedness.

        "Senior Subordination Agreement" means that certain Senior
        Subordination Agreement of even date herewith executed by and among
        Parent, the Senior Agent and each Purchaser, and all amendments and
        modifications thereto.

        "Shareholder Agreement" means that certain Shareholders' Agreement
        dated as of the date hereof among Parent, each Purchaser, F-Jotan,
        L.L.C. and the other parties thereto, as the same may be amended,
        modified, extended or restated from time to time.

        "Southland" means Southland Holdings Company, a Texas corporation
        and, unless the context requires otherwise, shall include its
        Subsidiaries, if any.

        "Subsidiary" means any Person of which or in which the Company and
        its other Subsidiaries or Parent and its Subsidiaries or Southland,
        as the context requires, own directly or indirectly fifty percent
        (50%) or more of (a) the combined voting power of all classes having
        general voting power under ordinary circumstances to elect a majority
        of the board of directors or equivalent body of such Persons, if it
        is a corporation, (b) the capital interest or profits interest of
        such Person, if it is a partnership, joint venture or similar entity,
        or (c) the beneficial interest of such Person if it is a trust,
        association or other unincorporated organization.

        "Subsidiary Guaranty" means the guaranty of a Subsidiary of Parent or
        the Company in favor of each Purchaser, in form and substance
        satisfactory to each Purchaser, as the same may be amended or
        otherwise modified from time to time.

        "Subsidiary Mergers" means the merger of Atlantic Bag and Paper
        Company and each Subsidiary owned directly by the Company (after
        giving effect to the Acquisition Merger) with and into the Company,
        with the Company as the surviving Person.

        "Target" is defined in Section 9.2 of the Senior Loan Agreement.

        "Termination Date" means the earliest to occur of (a) February 28,
        2005, (b) the date on which the Senior Subordinated Notes are
        accelerated pursuant to Article VIII, or (c) the date on which the
        Senior Subordinated Obligations are paid in full.

        "Termination Event" means (a) a Reportable Event, (b) the termination
        of a Pension Plan which has unfunded benefit liabilities (including
        an involuntary termination under Section 4042 of ERISA), (c) the
        filing of a Notice of Intent to Terminate a Pension Plan, (d) the
        initiation of proceedings to terminate a Pension Plan under
        Section 4042 of ERISA or (e) the appointment of a trustee to
        administer a Pension Plan under Section 4042 of ERISA.

        "Total Debt" means, at the time of determination, the sum of (a) all
        the Indebtedness of Parent and the Subsidiaries determined on a
        consolidated basis other than the Letter of Credit Liabilities (as
        defined in the Senior Loan Agreement) and Indebtedness outstanding
        under the Revolving Loans (as defined in the Senior Loan Agreement)
        plus (b) the arithmetic average of the sum of (i) the principal
        balance of the Revolving Loans outstanding as of the date of
        determination plus (ii) the principal balance of the Revolving Loans
        on the last day of each of the eleven (11) calendar months
        immediately preceding the date of determination, plus (c) the
        arithmetic average of the sum of (i) the Letter of Credit Liabilities
        outstanding as of the date of determination plus (ii) the Letter of
        Credit Liabilities outstanding on the last day of each of the eleven
        (11) calendar months immediately preceding the date of determination.

        "Transfer" is defined in Section 12.5 hereof.

        "Transferee" means any Person to whom a Transfer is made.

        "Warrants" is defined in the Purchase Documents and shall be
        denominated as set forth in Annex I hereto.

   Terms which are defined in other Sections of this Agreement shall have the
   meanings specified therein.  All other terms contained in this Agreement
   shall have, when the context so indicates, the meanings provided for by
   the Uniform Commercial Code as adopted and in force in the State of
   Florida, as from time to time in effect.

        11.2 Accounting Principles.  Where the character or amount of any
   asset or liability or item of income or expense is required to be
   determined or any consolidation or other accounting computation is
   required to be made for the purposes of this Agreement, the same shall be
   done, unless specified otherwise, in accordance with GAAP, except where
   such principles are inconsistent with the requirements of this Agreement.

        11.3 Directly or Indirectly.  Where any provision in this Agreement
   refers to action to be taken by any Person, or  which such Person is
   prohibited from taking, such provision shall be applicable whether the
   action in question is taken directly or indirectly by such Person.

        11.4 References.  When used in this Agreement, the words "hereof",
   "herein" and "hereunder" and words of similar import shall refer to this
   Agreement as a whole and not to any particular provision of this
   Agreement, and the words "Article", "Section", "subsection", "clause",
   "Annex", "Schedule" and "Exhibit" refer to Articles, Sections, subsections
   and clauses of, and Annexes, Schedules and Exhibits to, this Agreement
   unless otherwise specified.  

   XII. MISCELLANEOUS

        12.1 Expenses.  The Company agrees to pay (a) all out-of-pocket
   expenses of each Purchaser (including reasonable fees, expenses and
   disbursements of each Purchaser's counsel) in connection with the
   preparation, negotiation, enforcement, operation and administration of
   this Agreement, the Senior Subordinated Notes, the Other Agreements, or
   any documents executed in connection therewith, or any waiver,
   modification or amendment of any provision hereof or thereof; and (b) if
   an Event of Default occurs, all court costs and costs of collection,
   including, without limitation, reasonable fees, expenses and disbursements
   of counsel employed in connection with any and all collection efforts. 
   The attorneys' fees arising from such services, including those of any
   appellate proceedings, and all expenses, costs, charges and other fees
   incurred by such counsel or any Purchaser in any way or respect arising in
   connection with or relating to any of the events or actions described in
   this Article XII shall be payable by the Company to each Purchaser, on
   demand, and shall be additional Senior Subordinated Obligations.  Without
   limiting the generality of the foregoing, such expenses, costs, charges
   and fees may include:  recording costs, appraisal costs, paralegal fees,
   costs and expenses; accountants' fees, costs and expenses; court costs and
   expenses; photocopying and duplicating expenses; court reporter fees,
   costs and expenses; long distance telephone charges; air express charges,
   telegram charges; facsimile charges; secretarial overtime charges; and
   expenses for travel, lodging and food paid or incurred in connection with
   the performance of such legal services.  The Company agrees to indemnify
   each Purchaser from and hold it harmless against any documentary taxes,
   assessments or charges made by any governmental authority by reason of the
   execution and delivery by the Company or any other Person of this
   Agreement, the Other Agreements, and any documents executed in connection
   therewith.

        12.2 Indemnification.  IN ADDITION TO AND NOT IN LIMITATION OF THE
   OTHER INDEMNITIES PROVIDED FOR HEREIN OR IN ANY OTHER AGREEMENTS, THE
   COMPANY HEREBY INDEMNIFIES AND AGREES TO HOLD HARMLESS EACH PURCHASER AND
   ANY OTHER HOLDERS, AND EVERY AFFILIATE OF ANY OF THE FOREGOING, AND THEIR
   RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES AND AGENTS, FROM ANY
   CLAIMS, ACTIONS, DAMAGES, COSTS, ATTORNEYS' FEES AND EXPENSES (INCLUDING
   ANY OF THE SAME ARISING OUT OF THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE
   PERSON TO BE INDEMNIFIED) TO WHICH ANY OF THEM MAY BECOME SUBJECT, INSOFAR
   AS SUCH LOSSES, LIABILITIES, CLAIMS, ACTIONS, DAMAGES, COSTS AND EXPENSES
   ARISE FROM OR RELATE TO THIS  AGREEMENT OR THE OTHER AGREEMENTS, OR ANY OF
   THE TRANSACTIONS CONTEMPLATED THEREBY, OR FROM ANY INVESTIGATION,
   LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
   THREATENED INVESTIGATION, LITIGATION OR OTHER PROCEEDING RELATING TO ANY
   OF THE FOREGOING, OR FROM ANY VIOLATION OR CLAIM OF VIOLATION OF ANY
   APPLICABLE ENVIRONMENTAL LAWS WITH RESPECT TO ANY REAL OR PERSONAL
   PROPERTY, OR FROM ANY GOVERNMENTAL OR JUDICIAL CLAIM, ORDER OR JUDGMENT
   WITH RESPECT TO ANY REAL OR PERSONAL PROPERTY OF THE COMPANY, OR FROM ANY
   BREACH OF THE WARRANTIES, REPRESENTATIONS OR COVENANTS CONTAINED IN THIS
   AGREEMENT OR THE OTHER AGREEMENTS.  THE FOREGOING INDEMNIFICATION INCLUDES
   ANY SUCH CLAIMS, ACTIONS, DAMAGES, COSTS, AND EXPENSES INCURRED BY REASON
   OF THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE PERSON TO BE INDEMNIFIED,
   BUT EXCLUDES ANY OF THE SAME INCURRED BY REASON OF SUCH PERSON'S GROSS
   NEGLIGENCE OR WILLFUL MISCONDUCT.

        12.3 Notices.  Except as otherwise expressly provided herein, all
   communications provided for hereunder shall be in writing and delivered or
   mailed by the United States mails, certified mail, return receipt
   requested, (a) if to a Purchaser, addressed to such Purchaser at the
   address specified on Annex I hereto or to such other addresses as such
   Purchaser may in writing designate, (b) if to any other Holder, addressed
   to such Holder at such address as such Holder may in writing designate,
   and (c) if to Parent or any Subsidiary, addressed to Parent at the address
   set forth next to its name on the signature pages hereto or to such other
   address as Parent may in writing designate.  Notices shall be deemed to
   have been validly served, given or delivered (and "the date of such
   notice" or words of similar effect shall mean the date) five (5) days
   after deposit in the United States mails, certified mail, return receipt
   requested, with proper postage prepaid, or upon actual receipt thereof
   (whether by noncertified mail, telecopy, telegram, facsimile, express
   delivery or otherwise), whichever is earlier.

        12.4 Reproduction of Documents.  This Agreement and all documents
   relating hereto, including, without limitation (a) consents, waivers and
   modifications which may hereafter be executed, (b) documents received by
   any Purchaser at the closing of the purchase of the Senior Subordinated
   Notes, and (c) financial statements, certificates and other information
   previously or hereafter furnished to any Purchaser, may be reproduced by
   such Purchaser by any photographic, photostatic, microfilm, microcard,
   miniature photographic or other similar process and such Purchaser may
   destroy any original document so reproduced.  The Company agrees and
   stipulates that any such reproduction which is legible shall be admissible
   in evidence as the original itself in any judicial or administrative
   proceeding (whether or not the original is in existence and whether or not
   such reproduction was made by the Company in the regular course of
   business) and that any enlargement, facsimile or further reproduction of
   such reproduction shall likewise be admissible in evidence; provided that
   nothing herein contained shall preclude the  Company from objecting to the
   admission of any reproduction on the basis that such reproduction is not
   accurate, has been altered, is otherwise incomplete or is otherwise
   inadmissible.

        12.5 Assignment, Sale of Interest.  Neither Parent nor the Company
   may sell, assign or transfer this Agreement, or the Other Agreements or
   any portion thereof, including, without limitation, Parent's or the
   Company's rights, title, interests, remedies, powers and/or duties
   hereunder or thereunder.  Parent and the Company hereby consent to Rice's
   participation, sale, assignment, transfer or other disposition
   (collectively, a "Transfer"), at any time or times hereafter at the
   Company's expense, of this Agreement, or the Other Agreements to which
   Parent or any Subsidiary is a party, or of any portion hereof or thereof,
   including, without limitation, Rice's rights, title, interests, remedies,
   powers and/or duties hereunder or thereunder; provided, however, that
   except in the case of an assignment of all of a Purchaser's rights under
   this Agreement and the Senior Subordinated Notes, the outstanding
   principal amount of the Senior Subordinated Notes of the assigning
   Purchaser being assigned, pursuant to each assignment shall in no event be
   less than Three Million Dollars ($3,000,000).  In connection with any
   Transfer, Parent and the Company agree to cooperate fully with Rice and
   any potential Transferee.  Such cooperation shall include, but is not
   limited to, cooperating with any audits or other due diligence
   investigation undertaken by any potential Transferee.

        12.6 Successors and Assigns.  This Agreement will inure to the
   benefit of and be binding upon the parties hereto and their respective
   successors and assigns.

        12.7 Headings.  The headings of the sections and subsections of this
   Agreement are inserted for convenience only and do not constitute a part
   of this Agreement.

        12.8 Counterparts.  This Agreement may be executed simultaneously in
   two or more counterparts, each of which shall be deemed an original, and
   it shall not be necessary in making proof of this Agreement to produce or
   account for more than one such counterpart or reproduction thereof
   permitted by Section 12.3.

        12.9 Reliance on and Survival Provisions.  All covenants,
   representations and warranties made by Parent and the Company herein and
   in any certificates delivered pursuant hereto, whether or not in
   connection with a closing, (a) shall be deemed to be material and to have
   been relied upon by each Purchaser, notwithstanding any investigation
   heretofore or hereafter made by any Purchaser or on such Purchaser's
   behalf, and (b) shall survive the delivery of this Agreement and the
   Senior Subordinated Notes until all obligations of Parent and the Company
   under this Agreement shall have been satisfied.

        12.10     Integration and Severability.  This Agreement embodies the
   entire agreement and understanding between each Purchaser, Parent and the
   Company, and supersedes all prior agreements and understandings relating
   to the subject matter hereof.  In case any one or more of the provisions
   contained in this Agreement or in any Senior Subordinated Notes, or any 
   application thereof, shall be invalid, illegal or unenforceable in any
   respect, the validity, legality and enforceability of the remaining
   provisions contained herein and therein, and any other application
   thereof, shall not in any way be affected or impaired thereby.

        12.11     Law Governing.  THIS AGREEMENT HAS BEEN SUBSTANTIALLY
   NEGOTIATED AND IS BEING EXECUTED, DELIVERED, AND ACCEPTED, AND IS INTENDED
   TO BE PERFORMED, IN PART IN THE STATE OF FLORIDA.  ALL OBLIGATIONS, RIGHTS
   AND REMEDIES HEREUNDER, SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
   IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA.  THE SENIOR
   SUBORDINATED NOTES SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
   ACCORDANCE WITH THE LAWS OF THE STATE SPECIFIED THEREIN.  EACH PURCHASER
   RETAINS ALL RIGHTS UNDER THE LAWS OF THE UNITED STATES OF AMERICA,
   INCLUDING THOSE RELATING TO THE CHARGING OF INTEREST.

        12.12     Waivers; Modification.  NO PROVISION OF THIS AGREEMENT MAY
   BE WAIVED, AMENDED, CHANGED OR MODIFIED, OR THE DISCHARGE THEREOF
   ACKNOWLEDGED, ORALLY, BUT ONLY BY AN AGREEMENT IN WRITING SIGNED BY THE
   PARTY AGAINST WHOM THE ENFORCEMENT OF ANY WAIVER, CHANGE, MODIFICATION OR
   DISCHARGE IS SOUGHT.

        12.13     Waiver of Jury Trial.  AFTER REVIEWING THIS SECTION 12.13
   WITH ITS COUNSEL, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
   PARENT, THE COMPANY AND EACH PURCHASER HEREBY KNOWINGLY, INTELLIGENTLY AND
   INTENTIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY
   JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
   CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
   AGREEMENT, THE SENIOR SUBORDINATED NOTES OR ANY DOCUMENTS ENTERED INTO IN
   CONNECTION THEREWITH OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
   ACTIONS OF EACH PURCHASER IN THE NEGOTIATION, ADMINISTRATION, OR
   ENFORCEMENT THEREOF.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH
   PURCHASER TO PURCHASE THE SENIOR SUBORDINATED NOTES FROM THE COMPANY.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

   <PAGE>

        IN WITNESS WHEREOF, Parent, the Company and each Purchaser have
   caused this Agreement to be executed and delivered by their respective
   officers thereunto duly authorized.

                                      PARENT:

                                      JOTAN, INC.


                                      By:  /s/ Shea E. Ralph
                                           Shea E. Ralph,
                                           Chief Executive Officer

                                      Address for Notices for Parent and all
                                      Subsidiaries:

                                      118 West Adams Street 
                                      Jacksonville, Florida  32202
                                      Attn:  Mr. David Freedman
                                      Facsimile:  (904) 353-0075

                                      with a copy to:

                                      Alston & Bird
                                      One Atlantic Center
                                      1201 West Peachtree Street
                                      Atlanta, Georgia  30309
                                      Attn:  Clare Draper
                                      Facsimile:  (404) 881-7777


                                      COMPANY:

                                      SHC ACQUISITION CORP. (who will merge
                                      with and into Southland Holding
                                      Company)


                                      By:  /s/ Shea E. Ralph
                                           Shea E. Ralph,
                                           Chief Executive Officer

                                      PURCHASER:

                                      RICE PARTNERS II, L.P.

                                      By:  Rice Capital Group IV,
                                           L.P., Its general partner

                                           By:  RMC Fund Management,
                                                L P., Its general partner

                                                By:  Rice Mezzanine
                                                     Corporation, its
                                                     general partner

                                                By:  /s/ Jeffrey P. Sangalis
                                                    Jeffrey P. Sangalis
                                                    Managing Director


                                      F-SOUTHLAND, L.L.C.

                                      By:  Franklin Street/Fairview Capital,
                                           L.L.C., its manager


                                           By:  /s/ Jeremiah M. Callahan
                                               Jeremiah M. Callahan,
                                               Manager

                                       FF-SOUTHLAND, L.P.

                                      By:  FSFC Associates, L.P.,
                                           Its general partner

                                           By:  Franklin Capital, L.L.C.,
                                                its general partner


                                                By:  /s/ Jeremiah M. Callahan
                                                    Jeremiah M. Callahan,
                                                    Manager


   STATE OF GEORGIA         ]
                            ]
   COUNTY OF FULTON         ]

        This instrument was acknowledged before me on this ___ day of
   _____________, 1997 by Shea E. Ralph, Chief Executive Officer of Jotan,
   Inc.


                                 _____________________________________
                                 Notary Public

                                 _____________________________________
                                 Printed Name

   My commission expires:
   _______________________


   (SEAL)





   STATE OF GEORGIA         ]
                            ]
   COUNTY OF FULTON         ]

        This instrument was acknowledged before me on this ___ day of
   _____________, 1997 by Shea E. Ralph, Chief Executive Officer of SHC
   Acquisition Corp.


                                 _____________________________________
                                 Notary Public

                                 _____________________________________
                                 Printed Name

   My commission expires:
   _______________________


   (SEAL)




   STATE OF GEORGIA         ]
                            ]
   COUNTY OF FULTON         ]

        This instrument was acknowledged before me on this ___ day of
   _____________, 1997 by Jeffrey P. Sangalis, Managing Partner of  Rice
   Mezzanine Corporation, as general partner of RMC Fund Management, L.P., as
   general partner of Rice Capital Group IV, L.P. as general partner for Rice
   Partners II, L.P.


                                 _____________________________________
                                 Notary Public

                                 _____________________________________
                                 Printed Name

   My commission expires:
   _______________________


   (SEAL)



   STATE OF GEORGIA         ]
                            ]
   COUNTY OF FULTON         ]

        This instrument was acknowledged before me on this ___ day of
   _____________, 1997 by Jeremiah M. Callahan, Manager of
   Franklin/Street/Fairview Capital, L.L.C., as general partner of F-
   Southland, L.L.C.


                                 _____________________________________
                                 Notary Public

                                 _____________________________________
                                 Printed Name

   My commission expires:
   _______________________



   (SEAL)




   STATE OF GEORGIA         ]
                            ]
   COUNTY OF FULTON         ]

        This instrument was acknowledged before me on this ___ day of
   _____________, 1997 by Jeremiah M. Callahan, Manager of Franklin Capital,
   L.L.C., as general partner of FSFC Associates, L.P., as general partner of
   F-Southland, L.L.C.


                                 _____________________________________
                                 Notary Public

                                 _____________________________________
                                 Printed Name

   My commission expires:
   _______________________


   (SEAL)



   SOUTHLAND ACKNOWLEDGMENT

        By execution below, Southland (a) acknowledges that as a result of
   the Acquisition Merger, Southland has succeeded to the rights and
   obligations of the Company under this Agreement and the Other Agreements,
   (b) assumes the Senior Subordinated Obligations and (c) agrees to be bound
   by this Agreement and the Other Agreements as the Company.

                                 SOUTHLAND HOLDING COMPANY


                                 By:   /s/ Shea E. Ralph
                                       Shea E. Ralph
                                       Chief Executive Officer


   <PAGE>
                                     Annex I
                                       to
                             Note Purchase Agreement

                           Information Concerning Rice


   Rice:  Rice Partners II, L.P.

   Principal Amount of
   Senior Subordinated Note:     $7,000,000.00

   Denomination of Warrants:     Warrant A-1 - 9,581,726 shares of the common
                                 stock of Parent on a fully diluted basis
                                 Warrant A-2 - 2,515,203 shares of the common 
                                 stock of Parent on a fully diluted basis

   Origination Fee:    $175,000

   Address for notices:     Rice Partners II, L.P.
                            c/o Rice Capital Group IV, L.P.
                            5847 San Felipe, Suite 4350
                            Houston, Texas  77057
                            Attn: Jeffrey P. Sangalis
                            Facsimile:  (713) 783-9750

                            and with a copy to:

                            Hughes & Luce, L.L.P.
                            1717 Main Street, Suite 2800
                            Dallas, Texas 75201
                            Attn:  Larry A. Makel, Esq.
                            Facsimile:  (214) 939-6100

   Payments to be made
   by wire transfer to:     Southwest Bank of Texas, N.A.
                            Houston, Texas
                            ABA Routing #113011258
                            Accounting #9048545
                            For the Account of:
                            Rice Partners II, L.P.
                            Money Market Account #9020012
                            re:  Southland Holding Company 12.5% Senior 
                            Subordinated Note


                 Information Concerning the Southland Purchasers

   The Southland Purchasers:     F-Southland, L.L.C.
                                 FF-Southland, L.P.

   Principal Amount of
   Senior Subordinated Note
   F-Southland, L.L.C.:          $ 1,000,000.00

   Principal Amount of
   Senior Subordinated Note
   FF-Southland, L.P.:           $ 1,000,000.00

   Denomination of Warrant: Warrant B-1 - 359,315 shares of the common stock
                            of Parent on a fully diluted basis (F-Southland,
                            L.L.C.)
                            Warrant B-2 - 1,197,716 shares of the common 
                            stock of Parent on a fully diluted basis 
                            (F-Southland, L.L.C.)
                            Warrant C-1 - 359,315 shares of the common stock 
                            of Parent on a fully diluted basis (FF-Southland, 
                            L.P.)
                            Warrant C-2 - 1,197,716 shares of the common stock 
                            of Parent on a fully diluted basis (FF-Southland,
                            L.P.)

   Origination Fee:         F-Southland, L.L.C.:     $ 25,000.00
                            FF-Southland, L.P.: $25,000.00

   Address for notices:     F-Southland, L.L.C.
                            FF-Southland, L.P.
                            c/o Fairview Capital
                            702 Oberlin Road
                            Suite 150
                            Raleigh, North Carolina  27605
                            Attn:  James D. Lumsden
                            Facsimile:  919-473-2501

                            and with a copy to:

                            Wyrick, Robins, Yates & Ponton, L.L.P.
                            4101 Lake Boone Trail, Suite 300
                            Raleigh, North Carolina  27607-7506
                            Attn:  James M. Yates, Jr., Esq.
                            Facsimile:  (919) 781-4865

   Payments to be made
   by wire transfer to
   F-Southland, L.L.C.:    WACHOVIA Bank of North Carolina
                           Cameron Village Branch, Raleigh, NC
                           ABA Routing #053100494
                           Account #6263126828
                           For the Account of:
                           F-Southland, L.L.C.
                           re:  Southland Holding Company
                           12.5% Senior Subordinated Note
                           Attention:  Cheryl Whaley (919) 755-2300

   Payments to be made
   by wire transfer to
   FF-Southland, L.P.:     WACHOVIA Bank of North Carolina
                           Cameron Village Branch, Raleigh, NC
                           ABA Routing #053100494
                           Accounting #6269094508
                           For the Account of:
                           FF-Southland, L.P.
                           re:  Southland Holding Company
                           12.5% Senior Subordinated Note
                           Attention:  Cheryl Whaley (919) 755-2300

   <PAGE>
                                  Schedule 4.3
                                       to
                             Note Purchase Agreement

                       Defaults under Existing Agreements


   <PAGE>
                                  Schedule 4.4
                                       to
                             Note Purchase Agreement

                 Authorizations, Approvals, Consents and Filings



   <PAGE>
                                 Schedule 4.5
                                       to
                             Note Purchase Agreement

                       Environmental Condition of Property


   <PAGE>
                                  Schedule 4.7
                                       to
                             Note Purchase Agreement

                            Litigation and Judgments


   <PAGE>
                                  Schedule 4.16
                                       to
                             Note Purchase Agreement

                                 Capitalization


   <PAGE>
                                  Schedule 4.17
                                       to
                             Note Purchase Agreement

                                Current Locations


   <PAGE>
                                  Schedule 4.23
                                       to
                             Note Purchase Agreement

                                     Brokers


   <PAGE>
                                  Schedule 4.26
                                       to
                             Note Purchase Agreement

                               Conduct of Business

   <PAGE>
                                  Schedule 7.10
                                       to
                             Note Purchase Agreement

                                  Remuneration


   <PAGE>
                                    Exhibit A
                                       to
                             Note Purchase Agreement

                        Form of Senior Subordinated Notes


   <PAGE>
                                    Exhibit B
                                       to
                             Note Purchase Agreement

                              Form of Legal Opinion


   <PAGE>
                                    Exhibit C
                                       to
                             Note Purchase Agreement

                    Form of Officer's Compliance Certificate


   <PAGE>
                                    Exhibit D
                                       to
                             Note Purchase Agreement

                             Permitted Indebtedness


   <PAGE>
                                    Exhibit E
                                       to
                             Note Purchase Agreement

                                 Permitted Liens