STOCK PURCHASE
                                    AGREEMENT



                                FAN-TASTIC, INC.
                                     Company



                         LEASING TECHNOLOGY INCORPORATED
                                      Buyer



                                 March 17, 1997
                                      Date


<PAGE>

                            STOCK PURCHASE AGREEMENT

          This Stock Purchase  Agreement  ("Agreement")  is made as of March 17,
1997,  by and  between  Leasing  Technology  Incorporated,  a  Utah  corporation
("Buyer"),  and those  individuals set forth on Schedule A attached hereto (each
such  individual  hereinafter  referred  to  as  "Seller"  and  collectively  as
"Sellers").

                                    RECITALS

         Sellers desire to sell,  and Buyer desires to purchase,  eighty percent
(80%) of the issued and  outstanding  shares (the  "Shares") of capital stock of
Fan-Tastic,  Inc., a Utah corporation (the "Company"), for the consideration and
on the terms set forth in this Agreement.

                                    AGREEMENT

         The parties, intending to be legally bound, agree as follows:

                                 1. DEFINITIONS

         For purposes of this  Agreement,  the following terms have the meanings
specified or referred to in this Section 1:

"Acquired Companies"--the Company and its Subsidiaries, collectively.

"Applicable  Contract"--any Contract (a) under which any Acquired Company has or
may acquire any rights,  (b) under which any Acquired  Company has or may become
subject to any obligation or liability,  or (c) by which any Acquired Company or
any of the assets owned or used by it is or may become bound.

"Balance Sheet"--as defined in Section 3.4.

"Best Efforts"--the efforts that a prudent Person desirous of achieving a result
would use in similar  circumstances  to ensure  that such  result is achieved as
expeditiously as possible.

"Breach"--a "Breach" of a representation,  warranty,  covenant,  obligation,  or
other provision of this Agreement or any instrument  delivered  pursuant to this
Agreement  will be  deemed  to have  occurred  if  there  is or has been (a) any
inaccuracy  in or breach of, or any  failure to  perform  or comply  with,  such
representation,  warranty, covenant,  obligation, or other provision, or (b) any
claim  (by any  Person)  or  other  occurrence  or  circumstance  that is or was
inconsistent with such representation,  warranty, covenant, obligation, or other
provision,  and the term "Breach" means any such  inaccuracy,  breach,  failure,
claim, occurrence, or circumstance.

"Buyer"--as defined in the first paragraph of this Agreement.

                                       1
<PAGE>


"Closing"--as defined in Section 2.3.

"Closing Date"--the date and time as of which the Closing actually takes place.

"Company"--as defined in the Recitals of this Agreement.

"Consent"--any approval, consent,  ratification,  waiver, or other authorization
(including any Governmental Authorization).

"Contemplated  Transactions"--all  of  the  transactions  contemplated  by  this
Agreement, including:

         (a)      the sale of the Shares by Sellers to Buyer;

         (b)      the  execution,  delivery, and performance of  the  Employment
         Agreements,  the  Loan  Agreements, the  Shareholders'  Agreement,  the
         Option Agreements, the Investment Letters, and the Sellers' Releases;

         (c)      the  performance  by  Buyer  and  Sellers  of their respective
         covenants and obligations under this Agreement; and

         (d)      Buyer's acquisition and ownership of the Shares.

"Contract"--any  agreement,  contract,   obligation,   promise,  or  undertaking
(whether  written  or oral and  whether  express  or  implied)  that is  legally
binding.

"Damages"--as defined in Section 11.2.

"Disclosure  Letter"--the  disclosure  letter  delivered  by  Sellers  to  Buyer
concurrently with the execution and delivery of this Agreement.

"Employment Agreements"--as defined in Section 2.4(a)(iii).

"Encumbrance"--any  charge,  claim,  community  property  interest,   condition,
equitable  interest,  lien, option,  pledge,  security interest,  right of first
refusal,  or restriction of any kind,  including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.

"Environment"--soil,   land  surface  or  subsurface   strata,   surface  waters
(including navigable waters, ocean waters,  streams, ponds, drainage basins, and
wetlands),  groundwaters,  drinking water supply, stream sediments,  ambient air
(including  indoor  air),  plant and animal  life,  and any other  environmental
medium or natural resource.

                                       2

<PAGE>


"Environmental,  Health, and Safety  Liabilities"--any  cost, damages,  expense,
liability,   obligation,   or  other   responsibility   arising  from  or  under
Environmental  Law or  Occupational  Safety and Health Law and  consisting of or
relating to:

                  (a) any environmental, health, or safety matters or conditions
         (including on-site or off-site  contamination,  occupational safety and
         health, and regulation of chemical substances or products);

                  (b) fines, penalties, judgments, awards, settlements, legal or
         administrative  proceedings,   damages,  losses,  claims,  demands  and
         response,  investigative,  remedial,  or inspection  costs and expenses
         arising under Environmental Law or Occupational Safety and Health Law;

                  (c)  financial   responsibility  under  Environmental  Law  or
         Occupational  Safety  and Health Law for  cleanup  costs or  corrective
         action, including any investigation,  cleanup, removal, containment, or
         other   remediation  or  response  actions   ("Cleanup")   required  by
         applicable  Environmental  Law or  Occupational  Safety  and Health Law
         (whether or not such  Cleanup has been  required  or  requested  by any
         Governmental  Body or any other  Person) and for any  natural  resource
         damages; or

                  (d)  any  other  compliance,  corrective,   investigative,  or
         remedial  measures  required under  Environmental  Law or  Occupational
         Safety and Health Law.

         The terms  "removal,"  "remedial," and "response  action,"  include the
types of  activities  covered by the United States  Comprehensive  Environmental
Response,  Compensation,  and  Liability  Act, 42 U.S.C.  ss.  9601 et seq.,  as
amended ("CERCLA").

"Environmental Law"--any Legal Requirement that requires or relates to:

                  (a)  advising  appropriate  authorities,  employees,  and  the
         public of  intended  or actual  releases  of  pollutants  or  hazardous
         substances  or  materials,  violations  of discharge  limits,  or other
         prohibitions and of the  commencements of activities,  such as resource
         extraction or construction,  that could have significant  impact on the
         Environment;

                  (b) preventing or reducing to acceptable levels the release of
         pollutants or hazardous substances or materials into the Environment;

                  (c) reducing  the  quantities,  preventing  the  release,   or
         minimizing the hazardous characteristics of wastes that are generated;

                  (d) assuring that products are designed, formulated, packaged,
         and used so that they do not present unreasonable risks to human health
         or the Environment when used or disposed of;


                                       3
<PAGE>

                  (e)      protecting   resources,   species,   or    ecological
         amenities;

                  (f)      reducing to acceptable  levels the  risks inherent in
         the transportation of  hazardous substances,  pollutants, oil, or other
         potentially harmful substances;

                  (g)      cleaning  up  pollutants  that  have  been  released,
         preventing the threat of  release, or paying the costs of such clean up
         or prevention; or

                  (h) making responsible  parties pay private parties, or groups
         of them,  for  damages  done to their  health  or the  Environment,  or
         permitting  self-appointed  representatives  of the public  interest to
         recover for injuries done to public assets.

"ERISA"--the  Employee  Retirement  Income Security Act of 1974 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.

"Facilities"--any  real property,  leaseholds,  or other interests  currently or
formerly owned or operated by any Acquired  Company and any  buildings,  plants,
structures,  or equipment  (including  motor  vehicles,  tank cars,  and rolling
stock) currently or formerly owned or operated by any Acquired Company.

"GAAP"--generally  accepted United States  accounting  principles,  applied on a
basis  consistent  with the  basis on which  the  Balance  Sheet  and the  other
financial statements referred to in Section 3.4(b) were prepared.

"Governmental Authorization"--any approval, consent, license, permit, waiver, or
other authorization  issued,  granted,  given, or otherwise made available by or
under  the  authority  of  any  Governmental  Body  or  pursuant  to  any  Legal
Requirement.

"Governmental Body"--any:

                  (a)      nation, state, county, city, town, village, district,
         or other jurisdiction of  any nature;

                  (b)      federal, state, local,  municipal, foreign, or  other
         government;

                  (c)      governmental    or    quasi-governmental    authority
         of  any nature (including any  governmental agency, branch, department,
         official, or entity and any court or other tribunal);

                  (d)      multi-national organization or body; or

                  (e)  body   exercising,   or   entitled   to   exercise,   any
         administrative,  executive, judicial, legislative,  police, regulatory,
         or taxing authority or power of any nature.


                                       4
<PAGE>


"Hazardous  Activity"--the  distribution,   generation,   handling,   importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer,  transportation,  treatment, or use (including any withdrawal or other
use of  groundwater)  of Hazardous  Materials in, on, under,  about, or from the
Facilities  or any  part  thereof  into  the  Environment,  and any  other  act,
business,  operation,  or thing that increases the danger, or risk of danger, or
poses  an  unreasonable  risk of  harm  to  persons  or  property  on or off the
Facilities,  or that may  affect  the value of the  Facilities  or the  Acquired
Companies.

"Hazardous  Materials"--any  waste or other  substance that is listed,  defined,
designated,  or  classified  as,  or  otherwise  determined  to  be,  hazardous,
radioactive,  or toxic or a pollutant or a contaminant  under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including  petroleum  and  all  derivatives  thereof  or  synthetic  substitutes
therefor and asbestos or asbestos-containing materials.

"Intellectual Property Assets" --as defined in Section 3.22.

"IRC"--the  Internal  Revenue Code of 1986 or any successor law, and regulations
issued by the IRS pursuant to the Internal Revenue Code or any successor law.

"IRS"--the United States Internal Revenue Service or any successor agency,  and,
to the extent relevant, the United States Department of the Treasury.

"Knowledge"--an  individual  will be deemed to have  "Knowledge" of a particular
fact or other matter if:

                  (a) such individual  is actually aware of  such fact or  other
         matter; or

                  (b) a prudent  individual  could be  expected  to  discover or
         otherwise  become  aware of such fact or other  matter in the course of
         conducting  a reasonably  comprehensive  investigation  concerning  the
         existence of such fact or other matter.

         A Person (other than an individual)  will be deemed to have "Knowledge"
of a particular  fact or other matter if any individual  who is serving,  or who
has at any time served, as a director, officer, partner, executor, or trustee of
such Person (or in any similar capacity) has, or at any  time had,  Knowledge of
such fact or other matter.

"Legal   Requirement"--any   federal,   state,   local,   municipal,    foreign,
international,  multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.

"Loan  Agreements"--the Loan Agreement,  Promissory Note, and Security Agreement
as defined in  Section  2.4. 

                                        5
<PAGE>

"Occupational  Safety and Health Law"--any Legal Requirement designed to provide
safe and healthful  working  conditions  and to reduce  occupational  safety and
health hazards,  and any program,  whether  governmental  or private  (including
those   promulgated  or  sponsored  by  industry   associations   and  insurance
companies), designed to provide safe and healthful working conditions.

"Order"--any award, decision, injunction,  judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court,  administrative agency,
or other Governmental Body or by any arbitrator.

"Ordinary  Course of  Business"--an  action  taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:

                  (a)  such action is consistent  with  the  past  practices  of
         such  Person and  is taken in the ordinary course of the normal day-to-
         day operations of such Person;

                  (b) such action is not required to be  authorized by the board
         of  directors  of such  Person  (or by any  Person or group of  Persons
         exercising  similar  authority) [and is not required to be specifically
         authorized by the parent company (if any) of such Person]; and

                  (c) such action is similar in nature and  magnitude to actions
         customarily taken,  without any authorization by the board of directors
         (or by any Person or group of Persons exercising similar authority), in
         the  ordinary  course  of the  normal  day-to-day  operations  of other
         Persons that are in the same line of business as such Person.

"Organizational Documents"--(a) the articles or certificate of incorporation and
the bylaws of a corporation;  (b) the partnership agreement and any statement of
partnership of a general partnership;  (c) the limited partnership agreement and
the certificate of limited partnership of a limited partnership; (d) any charter
or similar document adopted or filed in connection with the creation, formation,
or organization of a Person; and (e) any amendment to any of the foregoing.

"Person"--any  individual,  corporation (including any non-profit  corporation),
general  or limited  partnership,  limited  liability  company,  joint  venture,
estate,  trust,  association,  organization,  labor  union,  or other  entity or
Governmental Body.

"Proceeding"--any   action,   arbitration,    audit,   hearing,   investigation,
litigation, or suit (whether civil, criminal, administrative,  investigative, or
informal)  commenced,  brought,  conducted,  or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.

"Related Person"--with respect to a particular individual:

                  (a)      each other member of such individual's Family;


                                       6
<PAGE>

                  (b) any Person that is directly or  indirectly  controlled  by
         such individual or one or more members of such individual's Family;

                  (c) any Person in  which  such  individual or  members of such
         individual's  Family  hold  (individually  or  in   the   aggregate)  a
         Material Interest; and

                  (d) any Person with respect to which such individual or one or
         more members of such individual's Family serves as a director, officer,
         partner, executor, or trustee (or
         in a similar capacity).

         With respect to a specified Person other than an individual:

                  (a) any  Person  that  directly  or  indirectly  controls,  is
         directly or  indirectly  controlled  by, or is  directly or  indirectly
         under common control with such specified Person;

                  (b) any  Person  that  holds  a  Material  Interest  in   such
         specified Person;

                  (c) each  Person   that  serves   as  a   director,   officer,
         partner, executor, or trustee of such specified Person (or in a similar
         capacity);

                  (d) any Person in which such specified Person holds a Material
         Interest;

                  (e) any  Person   with  respect   to   which  such   specified
         Person   serves   as   a general  partner or a trustee (or in a similar
         capacity); and

                  (f) any Related Person of any  individual described  in clause
         (b) or (c).

          For purposes of this  definition,  (a) the  "Family" of an  individual
includes (i) the individual,  (ii) the  individual's  spouse and former spouses,
(iii)  any  other  natural  person  who  is  related  to the  individual  or the
individual's  spouse within the second degree, and (iv) any other natural person
who resides with such  individual,  and (b) "Material  Interest" means direct or
indirect  beneficial  ownership  (as defined in Rule 13d-3 under the  Securities
Exchange  Act  of  1934)  of  voting   securities  or  other  voting   interests
representing at least 10% of the outstanding  voting power of a Person or equity
securities  or  other  equity  interests   representing  at  least  10%  of  the
outstanding equity securities or equity interests in a Person.

"Release"--any spilling, leaking, emitting, discharging,  depositing,  escaping,
leaching, dumping, or other releasing into the Environment,  whether intentional
or unintentional.

"Representative"--with  respect to a particular Person,  any director,  officer,
employee,  agent,  consultant,  advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.


                                       7
<PAGE>

"Securities  Act"--the  Securities  Act  of  1933  or  any  successor  law,  and
regulations and rules issued pursuant to that Act or any successor law.

"Sellers"--as defined in the first paragraph of this Agreement.

"Sellers' Releases"--as defined in Section 2.4.

"Shares"--as defined in the Recitals of this Agreement.

"Subsidiary"--with respect to any Person (the "Owner"), any corporation or other
Person  of which  securities  or other  interests  having  the  power to elect a
majority of that  corporation's  or other Person's board of directors or similar
governing  body,  or  otherwise  having  the power to direct  the  business  and
policies of that  corporation  or other Person  (other than  securities or other
interests  having such power only upon the happening of a  contingency  that has
not  occurred)  are held by the Owner or one or more of its  Subsidiaries;  when
used without reference to a particular  Person,  "Subsidiary" means a Subsidiary
of the Company.

"Tax Return"--any return (including any information return), report,  statement,
schedule, notice, form, or other document or information filed with or submitted
to, or  required  to be filed with or  submitted  to, any  Governmental  Body in
connection with the determination, assessment, collection, or payment of any Tax
or in connection with the administration,  implementation,  or enforcement of or
compliance with any Legal Requirement relating to any Tax.

"Threat of  Release"--a  substantial  likelihood  of a Release  that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.

"Threatened"--a  claim,  Proceeding,  dispute,  action,  or other matter will be
deemed to have  been  "Threatened"  if any  demand  or  statement  has been made
(orally or in writing) or any notice has been given  (orally or in writing),  or
if any other event has  occurred or any other  circumstances  exist,  that would
lead a  prudent  Person to  conclude  that  such a claim,  Proceeding,  dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.

                     2. SALE AND TRANSFER OF SHARES; CLOSING

2.1      SHARES

         Subject to the terms and conditions of this Agreement,  at the Closing,
Sellers will sell and transfer the Shares to Buyer,  and Buyer will purchase the
Shares from  Sellers.  In addition,  at any time prior to March 31, 2000 Sellers
shall have the right to exchange their  remaining  shares of common stock of the


                                       8
<PAGE>

Company for shares of Class D preferred stock of Buyer on the basis of 0.0240385
shares of Class D preferred  stock of Buyer for every one share of common  stock
of the Company.

2.2      PURCHASE PRICE

         The purchase  price (the  "Purchase  Price") for the Shares will be the
issuance  of 100,000  shares of Class D  preferred  stock of Buyer.  The Class D
preferred  stock shall be issued to Sellers in the amounts set forth on Schedule
A hereof and shall have such rights, preferences and limitations as set forth on
Schedule B hereof.

2.3      CLOSING

          The purchase and sale (the  "Closing")  provided for in this Agreement
will take place at the offices of Buyer's  counsel at 1270 Eagle Gate Tower,  60
East South Temple, Salt Lake City, Utah, at 10:00 a.m. (local time) on March 17,
1997 or at such other time and place as the  parties  may agree.  Subject to the
provisions of Section 10,  failure to consummate  the purchase and sale provided
for in this Agreement on the date and time and at the place determined  pursuant
to this Section 2.3 will not result in the  termination  of this  Agreement  and
will not relieve any party of any obligation under this Agreement.

2.4      CLOSING OBLIGATIONS

         At the Closing:

         (a)      Sellers will deliver to Buyer:

                           (i) certificates   representing   the   Shares,  duly
                  endorsed (or accompanied by duly executed stock powers),  with
                  signatures guaranteed by a  commercial  bank  or  by  a member
                  firm of the New York Stock Exchange, for transfer to Buyer;

                           (ii) releases  in  the  form  of  Exhibit  2.4(a)(ii)
                  executed by Sellers (collectively, "Sellers' Releases");

                           (iii) employment  agreements  in  the form of Exhibit
                  2.4(a)(iii),  executed  by   Barry  Papenfuss, Tim  Papenfuss,
                  Greg  Park  and   Will  Papenfuss  (collectively,  "Employment
                  Agreements");

                           (iv) investment   letters  in  the  form  of  Exhibit
                  2.4(a)(iv), executed by Sellers (collectively, the "Investment
                  Letters"); and

                           (v)  a certificate executed by Sellers, excluding Rod
                  Hawes,  representing  and  warranting  to  Buyer  that each of
                  Sellers' representations and  warranties in this Agreement was
                  accurate in all respects as of the date of this Agreement  and
                  is  accurate  in  all  respects  as  of  the  Closing Date  as
                  if  made  on  the  Closing  Date  (giving  full effect  to any
                  supplements to the Disclosure Letter that  were  delivered  by
                  Sellers to Buyer  prior to the Closing Date in accordance with
                  Section 6.5); and

                           (vi) Loan   Agreements   in   the  form  of   Exhibit
                  2.4(a)(vi),  executed  by the Company (the "Loan Agreements");
                  and

                           (vii) a  shareholder's  agreement  in  the  form   of
                  Exhibit  2.4(a)(vii)  executed by  Sellers (the "Shareholders'
                  Agreement"); and


                                        9
<PAGE>

                  (b)      Buyer will deliver to Sellers:

                           (i)  certificates  representing  the Purchase  price,
                  which Buyer and Sellers  mutually  agree that for  purposes of
                  this Agreement shall represent a value of $1,000,000;

                           (ii)   the Loan Agreement evidencing a line of credit
                  for the  Company in  an  amount  of  not  less  than  $358,000
                  executed by Lender;

                           (iii) a  certificate  executed by Buyer to the effect
                  that, except as otherwise stated in such certificate,  each of
                  Buyer's  representations  and warranties in this Agreement was
                  accurate in all respects as of the date of this  Agreement and
                  is accurate in all  respects as of the Closing Date as if made
                  on the Closing Date;

                           (iv)  the  Employment  Agreements,  executed  by  the
                  Company; and

                           (v)   the  Shareholders' Agreement executed by Buyer;
                  and

                           (vi)  Option   Agreements  in  the  form  of  Exhibit
                  2.4(b)(vi) executed by Buyer (the "Option Agreement") granting
                  Sellers,  collectively an option to purchase 150,000 shares of
                  Buyer's common stock.

              3. REPRESENTATIONS AND WARRANTIES OF CERTAIN SELLERS

         Barry  Papenfuss,  Tim Papenfuss  and Greg Park,  jointly and severally
represent and warrant to Buyer as follows:

3.1      ORGANIZATION AND GOOD STANDING

                  (a) Part 3.1 of the Disclosure  Letter contains a complete and
         accurate list for each Acquired  Company of its name, its  jurisdiction
         of incorporation,  other  jurisdictions in which it is authorized to do
         business,  and  its  capitalization  (including  the  identity  of each
         stockholder  and the  number of shares  held by  each).  Each  Acquired
         Company is a corporation duly organized,  validly existing, and in good
         standing under the laws of its jurisdiction of incorporation, with full
         corporate  power and  authority  to conduct  its  business as it is now
         being  conducted,  to own or use  the  properties  and  assets  that it
         purports  to own or  use,  and to  perform  all its  obligations  under
         Applicable  Contracts.  Each Acquired  Company is duly  qualified to do
         business as a foreign  corporation  and is in good  standing  under the
         laws of each state or other  jurisdiction in which either the ownership
         or use of the  properties  owned or used by it,  or the  nature  of the
         activities conducted by it, requires such qualification.


                                       10

<PAGE>

                  (b) Sellers   have   delivered   to   Buyer  copies   of   the
         Organizational  Documents  of  each  Acquired  Company, as currently in
         effect.

3.2      AUTHORITY; NO CONFLICT

                  (a) This Agreement  constitutes the legal,  valid, and binding
         obligation of Sellers,  enforceable  against Sellers in accordance with
         its terms. Upon the execution and delivery by Sellers of the Employment
         Agreements,  and the Sellers'  Releases  (collectively,  the  "Sellers'
         Closing Documents"), the Sellers' Closing Documents will constitute the
         legal, valid, and binding  obligations of Sellers,  enforceable against
         Sellers in accordance  with their  respective  terms.  Sellers have the
         absolute and  unrestricted  right,  power,  authority,  and capacity to
         execute and deliver this Agreement and the Sellers'  Closing  Documents
         and to perform their  obligations under this Agreement and the Sellers'
         Closing Documents.

                  (b) Except as set forth in Part 3.2 of the Disclosure  Letter,
         neither  the  execution   and  delivery  of  this   Agreement  nor  the
         consummation  or  performance of any of the  Contemplated  Transactions
         will, directly or indirectly (with or without notice or lapse of time):

                           (i)  contravene,   conflict  with,  or  result  in  a
                  violation of (A) any provision of the Organizational Documents
                  of the Acquired  Companies,  or (B) any resolution  adopted by
                  the board of  directors  or the  stockholders  of any Acquired
                  Company;

                           (ii)  contravene,  conflict  with,  or  result  in  a
                  violation  of, or give any  Governmental  Body or other Person
                  the right to challenge any of the Contemplated Transactions or
                  to exercise any remedy or obtain any relief  under,  any Legal
                  Requirement  or any Order to which  any  Acquired  Company  or
                  Sellers,  or any of the assets  owned or used by any  Acquired
                  Company, may be subject;

                           (iii)  contravene,  conflict  with,  or  result  in a
                  violation of any of the terms or requirements  of, or give any
                  Governmental  Body the  right to  revoke,  withdraw,  suspend,
                  cancel,  terminate, or modify, any Governmental  Authorization
                  that is held by any Acquired Company or that otherwise relates
                  to the business of, or any of the assets owned or used by, any
                  Acquired Company;

                           (iv) cause  Buyer  or  any Acquired Company to become
                  subject to, or to become liable for the payment of, any Tax;

                           (v)  cause any  of the assets  owned by any  Acquired
                  Company to be  reassessed or revalued by  any taxing authority
                    or other Governmental Body;


                                       11

<PAGE>

                           (vi)  contravene,  conflict  with,  or  result  in  a
                  violation  or breach of any  provision  of, or give any Person
                  the right to declare a default or exercise  any remedy  under,
                  or to accelerate the maturity or performance of, or to cancel,
                  terminate, or modify, any Applicable Contract; or

                           (vii)  result in the  imposition  or  creation of any
                  Encumbrance upon or with respect to any of the assets owned or
                  used by any Acquired Company.

         Except as set forth in Part 3.2 of the Disclosure  Letter, no Seller or
Acquired  Company  is or will be  required  to give any  notice to or obtain any
Consent from any Person in  connection  with the  execution and delivery of this
Agreement  or  the   consummation  or  performance  of  any of the  Contemplated
Transactions.

                  (c) Sellers  are  acquiring  the Class D preferred  shares for
         their own account and not with a view to their distribution  within the
         meaning of Section 2(11) of the Securities Act.

3.3      CAPITALIZATION

         The authorized  equity  securities of the Company consist of 10,000,000
shares of common stock, no par value per share and 5,000,000 shares of preferred
stock,  no par value per share,  of which  5,200,000  shares of common stock are
issued and  outstanding  and  constitute  the Shares and no shares of  preferred
stock are issued or outstanding. Sellers are and will be on the Closing Date the
record and  beneficial  owners and holders of the Shares,  free and clear of all
Encumbrances.  Sellers own the number of shares set forth opposite their name on
Schedule A. With the exception of the Shares  (which are owned by Sellers),  all
of the  outstanding  equity  securities  and other  securities  of each Acquired
Company  are owned of record  and  beneficially  by one or more of the  Acquired
Companies,  free and clear of all Encumbrances.  No legend or other reference to
any  purported  Encumbrance  appears upon any  certificate  representing  equity
securities of any Acquired Company.  All of the outstanding equity securities of
each Acquired Company have been duly authorized and validly issued and are fully
paid and nonassessable.  There are no Contracts relating to the issuance,  sale,
or  transfer  of any  equity  securities  or other  securities  of any  Acquired
Company.  None of the outstanding  equity  securities or other securities of any
Acquired  Company was issued in  violation  of the  Securities  Act or any other
Legal Requirement. No Acquired Company owns, or has any Contract to acquire, any
equity  securities  or other  securities  of any  Person  (other  than  Acquired
Companies) or any direct or indirect  equity or ownership  interest in any other
business.

         Rod Hawes hereby  represents  and warrants  that on the Closing Date he
will be the  beneficial  owner and holder of the shares set opposite his name on
Schedule A, free and clear of all Encumbrances.


                                       12

<PAGE>


3.4      FINANCIAL STATEMENTS

         Sellers have  delivered to Buyer:  (a) unaudited  consolidated  balance
sheets of the Acquired  Companies as at December 31, 1996 (the "Balance  Sheet")
and  the  related  unaudited  consolidated  statements  of  income,  changes  in
stockholders'  equity,  and cash flow for each of the fiscal  years then  ended.
Such financial  statements and notes fairly present the financial  condition and
the results of operations, changes in stockholders' equity, and cash flow of the
Acquired Companies as at the respective dates of and for the periods referred to
in such financial statements,  all in accordance with GAAP, subject, in the case
of interim financial  statements,  to normal recurring year-end adjustments (the
effect of which  will  not,  individually  or in the  aggregate,  be  materially
adverse)  and the  absence  of notes  (that,  if  presented,  would  not  differ
materially from those included in the Balance Sheet);  the financial  statements
referred  to in this  Section 3.4 reflect  the  consistent  application  of such
accounting  principles  throughout the periods involved,  except as disclosed in
the notes to such financial  statements.  No financial  statements of any Person
other than the  Acquired  Companies  are  required by GAAP to be included in the
consolidated financial statements of the Company.

3.5      BOOKS AND RECORDS

          The books of account,  minute  books,  stock record  books,  and other
records of the  Acquired  Companies,  all of which have been made  available  to
Buyer,  are complete and correct and have been  maintained  in  accordance  with
sound  business  practices  and the  requirements  of  Section  13(b)(2)  of the
Securities  Exchange Act of 1934, as amended  (regardless  of whether or not the
Acquired Companies are subject to that Section), including the maintenance of an
adequate system of internal controls. The minute books of the Acquired Companies
contain  accurate and complete  records of all meetings  held of, and  corporate
action taken by, the  stockholders,  the Boards of Directors,  and committees of
the Boards of Directors of the  Acquired  Companies,  and no meeting of any such
stockholders,  Board of Directors,  or committee has been held for which minutes
have not been  prepared  and are not  contained  in such  minute  books.  At the
Closing,  all of  those  books  and  records  will be in the  possession  of the
Acquired Companies.

3.6      TITLE TO PROPERTIES; ENCUMBRANCES

         Part 3.6 of the Disclosure Letter contains a complete and accurate list
of all real  property,  leaseholds,  or  other  interests  therein  owned by any
Acquired  Company.  Sellers have  delivered or made available to Buyer copies of
the deeds and other  instruments  (as recorded) by which the Acquired  Companies
acquired such real  property and  interests,  and copies of all title  insurance
policies,  opinions,  abstracts, and surveys in the possession of Sellers or the
Acquired  Companies  and relating to such  property or  interests.  The Acquired
Companies  own (with  good and  marketable  title in the case of real  property,
subject  only  to the  matters  permitted  by the  following  sentence)  all the
properties and assets (whether real, personal,  or mixed and whether tangible or
intangible) that they purport to own located in the facilities owned or operated
by the Acquired  Companies or reflected as owned in the books and records of the

                                       13

<PAGE>

Acquired Companies,  including all of the properties and assets reflected in the
Balance Sheet (except for assets held under capitalized  leases disclosed or not
required  to be  disclosed  in Part 3.6 of the  Disclosure  Letter and  personal
property  sold since the date of the Balance  Sheet,  as the case may be, in the
Ordinary Course of Business),  and all of the properties and assets purchased or
otherwise acquired by the Acquired Companies since the date of the Balance Sheet
(except for  personal  property  acquired and sold since the date of the Balance
Sheet in the Ordinary  Course of Business and  consistent  with past  practice),
which  subsequently  purchased  or acquired  properties  and assets  (other than
inventory and short-term  investments)  are listed in Part 3.6 of the Disclosure
Letter.  All material  properties and assets  reflected in the Balance Sheet are
free and clear of all  Encumbrances  and are not, in the case of real  property,
subject to any rights of way, building use restrictions,  exceptions, variances,
reservations,  or  limitations  of any nature  except,  with respect to all such
properties and assets,  (a) mortgages or security interests shown on the Balance
Sheet as securing specified liabilities or obligations, with respect to which no
default (or event that, with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred in connection with
the  purchase of property  or assets  after the date of the Balance  Sheet (such
mortgages  and  security  interests  being  limited to the property or assets so
acquired), with respect to which no default (or event that, with notice or lapse
of time or both, would constitute a default) exists, (c) liens for current taxes
not yet due, and (d) with respect to real property,  (i) minor  imperfections of
title, if any, none of which is substantial in amount,  materially detracts from
the value or impairs the use of the  property  subject  thereto,  or impairs the
operations  of any  Acquired  Company,  and (ii)  zoning laws and other land use
restrictions  that do not impair the present or anticipated  use of the property
subject  thereto.  All buildings,  plants,  and structures owned by the Acquired
Companies  lie wholly within the  boundaries  of the real property  owned by the
Acquired  Companies  and do not  encroach  upon the  property  of, or  otherwise
conflict with the property rights of, any other Person.

3.7      CONDITION AND SUFFICIENCY OF ASSETS

         The  buildings,  plants,  structures,  and  equipment  of the  Acquired
Companies are structurally  sound,  are in good operating  condition and repair,
and are  adequate  for the uses to which  they are being  put,  and none of such
buildings, plants, structures, or equipment is in need of maintenance or repairs
except for ordinary,  routine  maintenance  and repairs that are not material in
nature or cost. The building,  plants, structures, and equipment of the Acquired
Companies are  sufficient for the continued  conduct of the Acquired  Companies'
businesses after the Closing in substantially the same manner as conducted prior
to the Closing.

3.8      ACCOUNTS RECEIVABLE

         All accounts receivable of the Acquired Companies that are reflected on
the Balance Sheet or on the accounting  records of the Acquired  Companies as of
the Closing Date  (collectively,  the "Accounts  Receivable")  represent or will
represent  valid  obligations  arising  from  sales  actually  made or  services
actually performed in the Ordinary Course of Business.  Unless paid prior to the

                                       14

<PAGE>


Closing  Date,  the  Accounts  Receivable  are or will be as of the Closing Date
current and  collectible  net of the  respective  reserves  shown on the Balance
Sheet or on the accounting  records of the Acquired  Companies as of the Closing
Date (which  reserves are adequate and calculated  consistent with past practice
and,  in the case of the reserve as of the Closing  Date,  will not  represent a
greater  percentage  of the Accounts  Receivable as of the Closing Date than the
reserve  reflected in the Balance Sheet  represented of the Accounts  Receivable
reflected  therein  and will not  represent  a  material  adverse  change in the
composition  of such  Accounts  Receivable  in terms of aging).  Subject to such
reserves,  each of the Accounts  Receivable either has been or will be collected
in full, without any set-off, within ninety days after the day on which it first
becomes due and payable. There is no contest,  claim, or right of set-off, other
than returns in the Ordinary  Course of  Business,  under any Contract  with any
obligor of an  Accounts  Receivable  relating  to the amount or validity of such
Accounts  Receivable.  Part 3.8 of the Disclosure Letter contains a complete and
accurate list of all Accounts  Receivable  as of the date of the Balance  Sheet,
which list sets forth the aging of such Accounts Receivable.

3.9      INVENTORY

          All inventory of the Acquired  Companies,  whether or not reflected in
the Balance Sheet,  consists of a quality and quantity usable and salable in the
Ordinary   Course  of  Business,   except  for  obsolete   items  and  items  of
below-standard  quality,  all of which have been  written off or written down to
net realizable  value in the Balance Sheet or on the  accounting  records of the
Acquired  Companies as of the Closing Date, as the case may be. All  inventories
not written off have been priced at the lower of cost or net realizable value on
a first in, first out basis.  The quantities of each item of inventory  (whether
raw materials,  work-in-process,  or finished goods) are not excessive,  but are
reasonable in the present circumstances of the Acquired Companies.

3.10     NO UNDISCLOSED LIABILITIES

         Except as set forth in Part 3.10 of the Disclosure Letter, the Acquired
Companies have no  liabilities  or  obligations of any nature  (whether known or
unknown and whether  absolute,  accrued,  contingent,  or otherwise)  except for
liabilities  or obligations  reflected or reserved  against in the Balance Sheet
and current  liabilities  incurred in the Ordinary  Course of Business since the
respective dates thereof.

3.11     TAXES

                  (a) The  Acquired  Companies  have filed or caused to be filed
         all Tax  Returns  that  are or were  required  to be  filed  by or with
         respect to any of them,  either separately or as a member of a group of
         corporations, pursuant to applicable Legal Requirements.   The Acquired
         Companies have paid, or made  provision for the payment of,  all  Taxes
         that  have or may have  become  due  pursuant  to those Tax  Returns or
         otherwise, or  pursuant to  any assessment  received by  Sellers or any
         Acquired  Company,  except such Taxes,  if any, as are listed  in  Part
         

                                       15
<PAGE>


         3.11 of the Disclosure Letter and are being contested in good faith and
         as to which adequate reserves (determined in accordance with GAAP) have
         been provided in the Balance Sheet.

                  (b) Except as described in Part 3.11 of the Disclosure Letter,
         no Seller or  Acquired  Company  has  given or been  requested  to give
         waivers  or  extensions  (or is or would  be  subject  to a  waiver  or
         extension  given by any other  Person) of any  statute  of  limitations
         relating to the payment of Taxes of any  Acquired  Company or for which
         any Acquired Company may be liable.

                  (c) The charges,  accruals, and reserves with respect to Taxes
         on  the  respective   books  of  each  Acquired  Company  are  adequate
         (determined  in  accordance  with GAAP) and are at least  equal to that
         Acquired  Company's  liability for Taxes.  There exists no proposed tax
         assessment  against any  Acquired  Company except  as disclosed  in the
         Balance Sheet or in Part 3.11 of the Disclosure Letter.

                  (d)  All  Tax  Returns   filed  by  (or  that   include  on  a
         consolidated  basis)  any  Acquired  Company  are  true,  correct,  and
         complete.  There is no tax  sharing  agreement  that will  require  any
         payment by any Acquired Company after the date of this Agreement.

3.12     NO MATERIAL ADVERSE CHANGE

         Since the date of the Balance  Sheet,  there has not been any  material
adverse change in the business,  operations,  properties,  prospects, assets, or
condition of any  Acquired  Company,  and no event has occurred or  circumstance
exists that may result in such a material adverse change.

3.13     EMPLOYEE BENEFITS

                  (a) As used in this Section 3.13, the following terms have the
         meanings set forth below.

         "Company Other Benefit  Obligation"  means an Other Benefit  Obligation
         owed, adopted, or followed by an Acquired Company or an ERISA Affiliate
         of an Acquired Company.

         "Company Plan" means all Plans of which an Acquired Company or an ERISA
         Affiliate of an Acquired Company is or was a Plan Sponsor,  or to which
         an  Acquired  Company  or an ERISA  Affiliate  of an  Acquired  Company
         otherwise  contributes  or has  contributed,  or in which  an  Acquired
         Company  or  an  ERISA  Affiliate  of  an  Acquired  Company  otherwise
         participates  or has  participated.  All  references  to  Plans  are to
         Company Plans unless the context requires otherwise.


                                       16
<PAGE>

"Company   VEBA"  means  a  VEBA  whose   members   include   employees  of  any
Acquired  Company  or any  ERISA  Affiliate  of an  Acquired Company.

"ERISA Affiliate"  means, with respect to an Acquired Company,  any other person
that, together with the Company, would be treated as a single employer under IRC
ss. 414.

"Multi-Employer Plan" has the meaning given in ERISA ss. 3(37)(A).

"Other Benefit  Obligations" means all obligations,  arrangements,  or customary
practices,  whether or not legally enforceable,  to provide benefits, other than
salary, as compensation for services  rendered,  to present or former directors,
employees, or agents, other than obligations,  arrangements,  and practices that
are Plans. Other Benefit Obligations  include consulting  agreements under which
the  compensation  paid does not depend  upon the  amount of  service  rendered,
sabbatical policies,  severance payment policies, and fringe benefits within the
meaning of IRCss.132.

"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.

"Pension Plan" has the meaning given in ERISA ss. 3(2)(A).

"Plan" has the meaning given in ERISA ss. 3(3).

"Plan Sponsor" has the meaning given in ERISA ss. 3(16)(B).

"Qualified  Plan" means any Plan that meets or purports to meet the requirements
of IRC ss. 401(a).

"Title IV Plans" means all Pension  Plans that are subject to Title IV of ERISA,
29 U.S.C. ss. 1301 et seq., other than Multi-Employer Plans.

"VEBA"  means a  voluntary  employees'  beneficiary  association  under  IRC ss.
501(c)(9).

"Welfare Plan" has the meaning given in ERISA ss. 3(1).

               (b) Part 3.13 of the  Disclosure Letter  contains a  complete and
         accurate list of all Company Plans,  Company Other Benefit Obligations,
         and Company  VEBAs,  and  identifies as such all Company Plans that are
         (A) defined benefit Pension  Plans, (B)  Qualified Plans, (C)  Title IV
         Plans, or (D) Multi-Employer Plans.

3.14     COMPLIANCE WITH LEGAL REQUIREMENTS;
         GOVERNMENTAL AUTHORIZATIONS

         (a)      Except as set forth in Part 3.14 of the Disclosure Letter:


                                       17

<PAGE>

                           (i) each Acquired  Company is, and at all times since
                  December 31, 1996 has been, in full compliance with each Legal
                  Requirement  that is or was applicable to it or to the conduct
                  or operation of its business or the ownership or use of any of
                  its assets;

                           (ii) no event has  occurred  or  circumstance  exists
                  that  (with or  without  notice  or  lapse  of  time)  (A) may
                  constitute  or result in a violation by any  Acquired  Company
                  of, or a failure on the part of any Acquired Company to comply
                  with,  any  Legal  Requirement,  or (B) may  give  rise to any
                  obligation  on the part of any Acquired  Company to undertake,
                  or to bear all or any  portion  of the cost of,  any  remedial
                  action of any nature; and

                           (iii)   no Acquired Company has received, at any time
                  since December 31, 1996, any notice  or  other   communication
                  (whether   oral   or   written)   from any  Governmental  Body
                  or  any  other  Person  regarding  (A)  any  actual,  alleged,
                  possible,  or  potential violation  of, or  failure to  comply
                  with,  any  Legal Requirement,  or  (B)  any  actual, alleged,
                  possible, or potential obligation on the  part of any Acquired
                  Company to  undertake, or  to bear  all or any  portion of the
                  cost of, any remedial action of any nature.

                  (b) Part 3.14 of the Disclosure  Letter  contains  a  complete
         and   accurate  list of each Governmental Authorization that is held by
         any Acquired Company or that  otherwise relates to  the business of, or
         to  any of  the assets  owned or  used by, any  Acquired  Company. Each
         Governmental Authorization listed or required to be listed in Part 3.14
         of  the  Disclosure  Letter is  valid and  in  full  force  and effect.
         Except  as  set forth in Part 3.14 of the Disclosure Letter:

                           (i) each Acquired  Company is, and at all times since
                  December 31, 1996 has been, in full compliance with all of the
                  terms  and  requirements  of each  Governmental  Authorization
                  identified  or required to be  identified  in Part 3.14 of the
                  Disclosure Letter;

                           (ii) no event  has occurred  or  circumstance  exists
                  that  may  (with  or  without  notice or  lapse  of  time) (A)
                  constitute or result directly or indirectly in  a violation of
                  or a  failure to  comply with  any term or  requirement of any
                  Governmental Authorization listed or required to  be listed in
                  Part 3.14 of the  Disclosure Letter, or (B) result directly or
                  indirectly   in   the  revocation,   withdrawal,   suspension,
                  cancellation, or termination of, or any modification to,   any
                  Governmental   Authorization   listed   or   required   to  be
                  listed  in  Part  3.14  of the Disclosure Letter;

                                       18

<PAGE>

                           (iii) no Acquired  Company has received,  at any time
                  since  December  31, 1996,  any notice or other  communication
                  (whether  oral or written) from any  Governmental  Body or any
                  other Person regarding (A) any actual, alleged,  possible,  or
                  potential violation of or failure to comply with   any term or
                  requirement of  any  Governmental  Authorization,  or  (B) any
                  actual,   proposed,   possible,   or   potential   revocation,
                  withdrawal,  suspension,  cancellation,   termination  of,  or
                  modification to any Governmental Authorization; and

                           (iv) all applications required to have been filed for
                  the  renewal  of the  Governmental  Authorizations  listed  or
                  required  to be listed in Part 3.14 of the  Disclosure  Letter
                  have been duly filed on a timely  basis  with the  appropriate
                  Governmental  Bodies,  and all other filings  required to have
                  been made with  respect  to such  Governmental  Authorizations
                  have  been duly made on a timely  basis  with the  appropriate
                  Governmental Bodies.

         The Governmental  Authorizations  listed in Part 3.14 of the Disclosure
Letter collectively constitute all of the Governmental  Authorizations necessary
to  permit  the  Acquired  Companies  to  lawfully  conduct  and  operate  their
businesses in the manner they currently  conduct and operate such businesses and
to permit the  Acquired  Companies  to own and use their assets in the manner in
which they currently own and use such assets.

3.15     LEGAL PROCEEDINGS; ORDERS

                  (a) Except as set forth in Part 3.15 of the Disclosure Letter,
         there is no pending Proceeding:

                           (i) that  has  been  commenced  by  or  against   any
                  Acquired  Company or that otherwise relates to or  may  affect
                  the business   of,  or  any  of  the  assets owned or used by,
                  any Acquired Company; or

                           (ii) that challenges,  or that may have the effect of
                  preventing, delaying, making illegal, or otherwise interfering
                  with, any of the Contemplated Transactions.

         To the  Knowledge  of Sellers and the Acquired  Companies,  (1) no such
Proceeding has been  Threatened,  and (2) no event has occurred or  circumstance
exists  that may give  rise to or serve as a basis for the  commencement  of any
such  Proceeding.  Sellers  have  delivered  to Buyer  copies of all  pleadings,
correspondence,  and other documents  relating to each Proceeding listed in Part
3.15 of the  Disclosure  Letter.  The  Proceedings  listed  in Part  3.15 of the
Disclosure  Letter  will not have a  material  adverse  effect on the  business,
operations, assets, condition, or prospects of any Acquired Company.

                  (b) Except as set forth in Part 3.15 of the Disclosure Letter:

                           (i) there is no Order to which any  of  the  Acquired
                  Companies, or any  of the assets owned or used by any Acquired
                  Company, is subject;

                                       19

<PAGE>

                           (ii)no Seller is subject to any Order that relates to
                  the business of, or any  of the  assets owned  or used by, any
                  Acquired Company; and

                           (iii) to the  Knowledge of  Sellers and  the Acquired
                  Companies, no  officer,  director,  agent, or  employee of any
                  Acquired Company  is subject to  any Order that prohibits such
                  officer,  director,  agent, or employee  from  engaging in  or
                  continuing any conduct,  activity, or practice relating to the
                  business of any Acquired Company.

                  (c) Except as set forth in Part 3.15 of the Disclosure Letter:

                           (i) each Acquired  Company is, and at all times since
                  December 31, 1996 has been, in full compliance with all of the
                  terms and  requirements  of each  Order to which it, or any of
                  the assets owned or used by it, is or has been subject;

                           (ii) no event has  occurred  or  circumstance  exists
                  that may  constitute  or result in (with or without  notice or
                  lapse of time) a  violation  of or failure to comply  with any
                  term  or  requirement  of any  Order  to  which  any  Acquired
                  Company,  or any of the assets  owned or used by any  Acquired
                  Company, is subject; and

                           (iii) no Acquired  Company has received,  at any time
                  since  December  31, 1996,  any notice or other  communication
                  (whether  oral or written) from any  Governmental  Body or any
                  other  Person  regarding  any actual,  alleged,  possible,  or
                  potential violation of, or failure to comply with, any term or
                  requirement of any Order to which any Acquired Company, or any
                  of the assets owned or used by any Acquired Company, is or has
                  been subject.

3.16     ABSENCE OF CERTAIN CHANGES AND EVENTS

         Except as set forth in Part 3.16 of the  Disclosure  Letter,  since the
date  of  the  Balance  Sheet,  the  Acquired  Companies  have  conducted  their
businesses only in the Ordinary Course of Business and there has not been any:

                  (a)  change in any  Acquired  Company's  authorized  or issued
         capital stock; grant of any stock option or right to purchase shares of
         capital  stock  of any  Acquired  Company;  issuance  of  any  security
         convertible into such capital stock; grant of any registration  rights;
         purchase, redemption,  retirement, or other acquisition by any Acquired
         Company of any shares of any such  capital  stock;  or  declaration  or
         payment of any dividend or other  distribution or payment in respect of
         shares of capital stock;

                  (b) amendment to the  Organizational Documents of any Acquired
         Company;

                                       20

<PAGE>

                  (c)  payment  or  increase  by  any  Acquired  Company  of any
         bonuses, salaries, or other compensation to any stockholder,  director,
         officer,  or (except in the Ordinary  Course of  Business)  employee or
         entry into any  employment,  severance,  or similar  Contract  with any
         director, officer, or employee;

                  (d)  adoption  of, or increase in the  payments to or benefits
         under,  any profit  sharing,  bonus,  deferred  compensation,  savings,
         insurance,  pension,  retirement, or other employee benefit plan for or
         with any employees of any Acquired Company;

                  (e) damage to or  destruction or loss of any asset or property
         of  any  Acquired  Company,   whether  or  not  covered  by  insurance,
         materially and adversely  affecting the properties,  assets,  business,
         financial condition, or prospects of the Acquired Companies,   taken as
         a whole;

                  (f)  entry  into,  termination  of,  or  receipt  of notice of
         termination  of  (i)  any  license,   distributorship,   dealer,  sales
         representative,  joint venture,  credit, or similar agreement,  or (ii)
         any Contract or transaction  involving a total remaining  commitment by
         or to any Acquired Company of at least $10,000;

                  (g) sale (other than sales of inventory in the Ordinary Course
         of Business),  lease, or other  disposition of any asset or property of
         any Acquired Company or mortgage,  pledge, or imposition of any lien or
         other  encumbrance  on any  material  asset or property of any Acquired
         Company,  including the sale, lease, or other disposition of any of the
         Intellectual Property Assets;

                  (h) cancellation  or waiver  of any  claims or  rights  with a
         value to any Acquired Company in excess of $10,000;

                  (i) material change  in the  accounting methods  used  by  any
         Acquired Company; or

                  (j) agreement, whether  oral or  written,   by   any  Acquired
         Company  to do any of the foregoing.

3.17     CONTRACTS; NO DEFAULTS

                  (a) Part 3.17(a) of  the Disclosure Letter contains a complete
         and  accurate  list,  and  Sellers  have delivered  to Buyer  true  and
         complete copies, of:

                           (i) each   Applicable    Contract    that    involves
                  performance of services or delivery of goods or  materials  by
                  one or more Acquired Companies of an amount or value in excess
                  of $10,000;


                                       21

<PAGE>
                           (ii) each   Applicable    Contract    that   involves
                  performance of services or delivery  of  goods  or   materials
                  to one or  more Acquired Companies of an  amount or  value  in
                  excess of $10,000;

                           (iii) each  Applicable  Contract that was not entered
                  into in the  Ordinary  Course of  Business  and that  involves
                  expenditures or receipts of one or more  Acquired Companies in
                  excess of $10,000;

                           (iv)  each  lease,  rental  or  occupancy  agreement,
                  license, installment and conditional sale agreement, and other
                  Applicable  Contract  affecting the ownership of,  leasing of,
                  title to, use of, or any  leasehold or other  interest in, any
                  real or personal property (except personal property leases and
                  installment and conditional  sales  agreements  having a value
                  per item or  aggregate  payments  of less than $5,000 and with
                  terms of less than one year);

                           (v) each  licensing  agreement  or  other  Applicable
                  Contract with respect to patents,  trademarks,  copyrights, or
                  other intellectual property, including agreements with current
                  or former employees, consultants, or contractors regarding the
                  appropriation or the non-disclosure of any of the Intellectual
                  Property Assets;

                           (vi) each collective  bargaining  agreement and other
                  Applicable  Contract  to or  with  any labor  union  or  other
                  employee representative of a group of employees;

                           (vii)  each  joint  venture,  partnership,  and other
                  Applicable  Contract  (however  named)  involving a sharing of
                  profits, losses, costs, or liabilities by any Acquired Company
                  with any other Person;

                           (viii) each Applicable Contract containing  covenants
                  that in any way purport to restrict the  business  activity of
                  any Acquired  Company or any Affiliate of an Acquired  Company
                  or limit the freedom of any Acquired  Company or any Affiliate
                  of an Acquired Company to engage in any line of business or to
                  compete with any Person;

                           (ix) each Applicable  Contract providing for payments
                  to or by any Person  based on  sales, purchases,  or  profits,
                  other than direct payments for goods;

                           (x) each   power  of  attorney   that  is   currently
                  effective and outstanding;

                           (xi) each Applicable Contract entered into other than
                  in the Ordinary  Course of Business  that contains or provides
                  for an  express  undertaking  by any  Acquired  Company  to be
                  responsible for consequential damages;

                                       22

<PAGE>

                           (xii) each   Applicable    Contract    for    capital
                  expenditures in excess of $10,000;

                           (xiii) each written warranty,  guaranty, and or other
                  similar  undertaking  with respect to contractual  performance
                  extended  by any Acquired  Company other than  in the Ordinary
                  Course of Business; and

                           (iv) each  amendment,  supplement,  and  modification
                 (whether oral or written) in respect of any of the foregoing.

          Part 3.17(a) of the Disclosure  Letter sets forth reasonably  complete
details concerning such Contracts,  including the parties to the Contracts,  the
amount  of  the  remaining  commitment  of  the  Acquired  Companies  under  the
Contracts,  and the Acquired  Companies'  office where  details  relating to the
Contracts are located.

                  (b) Except as  set forth in  Part 3.17(b)  of  the  Disclosure
          Letter:

                           (i) no  Seller  (and  no  Related  Person  of  either
                  Seller) has or may acquire any rights under, and no Seller has
                  or may become  subject to any  obligation or liability  under,
                  any  Contract  that  relates to the business of, or any of the
                  assets owned or used by, any Acquired Company; and

                           (ii) to the  Knowledge  of Sellers  and the  Acquired
                  Companies, no officer, director, agent, employee,  consultant,
                  or contractor of any Acquired Company is bound by any Contract
                  that purports to limit the ability of such officer,  director,
                  agent, employee, consultant, or contractor to (A) engage in or
                  continue any conduct,  activity,  or practice  relating to the
                  business  of  any  Acquired  Company,  or  (B)  assign  to any
                  Acquired  Company  or to any other  Person  any  rights to any
                  invention, improvement, or discovery.

                  (c)  Except as set  forth in Part  3.17(c)  of the  Disclosure
         Letter,  each Contract  identified or required to be identified in Part
         3.17(a)  of the  Disclosure  Letter is in full  force and effect and is
         valid and enforceable in accordance with its terms.

                  (d) Except as  set forth  in Part  3.17(d) of  the  Disclosure
         Letter:

                           (i) each Acquired  Company is, and at all times since
                  December  31,  1996  has  been,  in full  compliance  with all
                  applicable terms and requirements of each Contract under which
                  such Acquired  Company has or had any  obligation or liability
                  or by which such  Acquired  Company or any of the assets owned
                  or used by such Acquired Company is or was bound;

                           (ii) each other Person that has or had any obligation
                  or  liability  under any  Contract  under  which  an  Acquired
                  Company  has or had any  rights  is,  and  at all  times since


                                       23
<PAGE>

                  December  31, 1996  has been,  in  full  compliance  with  all
                  applicable terms and requirements of such Contract;

                           (iii) no event has  occurred or  circumstance  exists
                  that (with or without notice or lapse of time) may contravene,
                  conflict  with, or result in a violation or breach of, or give
                  any  Acquired  Company or other  Person the right to declare a
                  default or exercise any remedy  under,  or to  accelerate  the
                  maturity  or  performance  of,  or to  cancel,  terminate,  or
                  modify, any Applicable Contract; and

                           (iv) no  Acquired  Company  has given to or  received
                  from any other  Person,  at any time since  December 31, 1996,
                  any notice or other  communication  (whether  oral or written)
                  regarding any actual, alleged, possible, or potential
                  violation or breach of, or default under, any Contract.

                  (e) There are no  renegotiations  of, attempts to renegotiate,
         or  outstanding  rights to  renegotiate  any  material  amounts paid or
         payable to any Acquired  Company under  current or completed  Contracts
         with any Person  and,  to the  Knowledge  of Sellers  and the  Acquired
         Companies,   no  such   Person  has  made   written   demand  for  such
         renegotiation.

                  (f) The Contracts relating to the sale,  design,  manufacture,
         or  provision of products or services by the  Acquired  Companies  have
         been  entered  into in the  Ordinary  Course of Business  and have been
         entered into without the commission of any act alone or in concert with
         any other Person,  or any  consideration  having been paid or promised,
         that is or would be in violation of any Legal Requirement.

3.18     INSURANCE

                  (a)      Sellers have delivered to Buyer:

                           (i) true  and  complete  copies  of all  policies  of
                  insurance  to which any  Acquired  Company is a party or under
                  which any  Acquired  Company,  or any director of any Acquired
                  Company, is or has been covered at any time within the
                  three years preceding the date of this Agreement;

                           (ii) true   and   complete  copies  of   all  pending
                  applications   for   policies of insurance; and

                           (iii) any statement  by the  auditor of any  Acquired
                  Company's financial  statements with regard to the adequacy of
                  such entity's coverage or of the reserves for claims.

                  (b)      Except as set forth on Part 3.18(b) of the Disclosure
           Letter:


                                       24

<PAGE>

                           (i) All policies to which any  Acquired  Company is a
                  party or that provide coverage to either Seller,  any Acquired
                  Company, or any director or officer of an Acquired Company:

                                    (A) are valid, outstanding, and enforceable;

                                    (B) are  issued  by  an  insurer   that   is
                           financially sound and reputable;

                                    (C)   taken   together,   provide   adequate
                           insurance  coverage for the assets and the operations
                           of the  Acquired  Companies  for all  risks  normally
                           insured  against  by a  Person  carrying  on the same
                           business or businesses as the Acquired Companies;

                                    (D)   are sufficient for compliance with all
                           Legal Requirements  and   Contracts   to   which  any
                           Acquired Company is a party or by which any  of  them
                           is bound;

                                    (E)   will continue in full force and effect
                           following   the  consummation  of  the   Contemplated
                           Transactions; and

                                    (F) do not  provide  for  any  retrospective
                           premium   adjustment   or   other   experienced-based
                           liability on the part of any Acquired Company.

                           (ii) No Seller or Acquired  Company has  received (A)
                  any refusal of  coverage or any notice that a defense  will be
                  afforded  with  reservation  of  rights,  or (B) any notice of
                  cancellation or any other indication that any insurance policy
                  is no longer in full force or effect or will not be renewed or
                  that  the  issuer  of any  policy  is not  willing  or able to
                  perform its obligations thereunder.

                           (iii) The Acquired  Companies  have paid all premiums
                  due,  and have  otherwise  performed  all of their  respective
                  obligations,  under each policy to which any Acquired  Company
                  is a party or that provides  coverage to any Acquired  Company
                  or director thereof.

                           (iv)  The Acquired Companies have given notice to the
                  insurer of all claims that may be insured thereby.

3.19     ENVIRONMENTAL MATTERS

         Except as set forth in part 3.19 of the disclosure letter:

                  (a) Each  Acquired  Company is, and at all times has been,  in
         full  compliance  with,  and has not been and is not in violation of or
         liable under, any Environmental Law.

                                       25

<PAGE>


         No Seller or Acquired Company has any basis to expect, nor  has  any of
         them or any other Person for  whose conduct they  are or  may  be  held
         to be responsible received,  any actual or Threatened order, notice, or
         other communication  from (i) any Governmental Body  or private citizen
         acting in the  public interest,  or (ii) the  current or prior owner or
         operator of  any Facilities,  of any actual  or potential  violation or
         failure to comply  with any  Environmental  Law,  or  of any  actual or
         Threatened  obligation   to  undertake  or  bear   the  cost   of   any
         Environmental,  Health, and Safety  Liabilities  with respect to any of
         the  Facilities  or any  other  properties  or  assets  (whether  real,
         personal,  or mixed) in which Sellers or any  Acquired Company has  had
         an interest, or with respect to any  property  or  Facility  at  or  to
         which  Hazardous  Materials  were  generated,  manufactured,   refined,
         transferred,  imported,  used,  or processed  by Sellers,  any Acquired
         Company,  or any other Person for whose conduct they are or may be held
         responsible,  or  from which Hazardous Materials have been transported,
         treated, stored, handled, transferred, disposed, recycled, or received.

                  (b) There are no pending or, to the  Knowledge  of Sellers and
         the  Acquired  Companies,  Threatened  claims,  Encumbrances,  or other
         restrictions of any nature,  resulting from any Environmental,  Health,
         and  Safety   Liabilities   or  arising   under  or   pursuant  to  any
         Environmental  Law, with respect to or affecting any of the  Facilities
         or any other properties and assets (whether real,  personal,  or mixed)
         in which Sellers or any Acquired Company has or had an interest.

                  (c) No Seller or Acquired Company has any basis to expect, nor
         has any of them or any other  Person for whose  conduct they are or may
         be  held  responsible,  received,  any  citation,  directive,  inquiry,
         notice, Order, summons, warning, or other communication that relates to
         Hazardous Activity,  Hazardous  Materials,  or any alleged,  actual, or
         potential violation or failure to comply with any Environmental Law, or
         of any alleged,  actual,  or potential  obligation to undertake or bear
         the cost of any  Environmental,  Health,  and Safety  Liabilities  with
         respect  to any of the  Facilities  or any other  properties  or assets
         (whether  real,  personal,  or mixed) in which  Sellers or any Acquired
         Company had an interest, or with respect to any property or facility to
         which   Hazardous   Materials   generated,    manufactured,    refined,
         transferred,  imported,  used,  or processed  by Sellers,  any Acquired
         Company,  or any other Person for whose conduct they are or may be held
         responsible,   have  been  transported,   treated,   stored,   handled,
         transferred, disposed, recycled, or received.

                  (d) No Seller  or Acquired  Company, or  any other  Person for
         whose  conduct  they  are   or  may  be  held   responsible,  has   any
         Environmental, Health, and Safety Liabilities   with   respect  to  the
         Facilities  or, to the Knowledge of Sellers and the Acquired Companies,
         with  respect  to  any  other  properties  and  assets  (whether  real,
         personal, or  mixed) in which  Sellers or any  Acquired Company (or any
         predecessor), has or had an interest, or  at  any property geologically
         or hydrologically adjoining the Facilities or any such  other  property
         or assets.

                                       26

<PAGE>

                  (e)  There are no  Hazardous  Materials  present  on or in the
         Environment at the Facilities or at any geologically or  hydrologically
         adjoining  property,  including  any Hazardous  Materials  contained in
         barrels, above or underground storage tanks, landfills,  land deposits,
         dumps,  equipment  (whether  moveable  or fixed)  or other  containers,
         either temporary or permanent, and deposited or located in land, water,
         sumps, or any other part of the Facilities or such adjoining  property,
         or  incorporated  into any  structure  therein or  thereon.  No Seller,
         Acquired Company, any other Person for whose conduct they are or may be
         held  responsible,  or to the  Knowledge  of Sellers  and the  Acquired
         Companies,  any other Person,  has permitted or conducted,  or is aware
         of, any Hazardous  Activity conducted with respect to the Facilities or
         any other  properties or assets (whether real,  personal,  or mixed) in
         which Sellers or any Acquired  Company has or had an interest except in
         full compliance with all applicable Environmental Laws.

                  (f) There has been no Release or, to the  Knowledge of Sellers
         and  the  Acquired  Companies,  Threat  of  Release,  of any  Hazardous
         Materials at or from the Facilities or at any other locations where any
         Hazardous Materials were generated, manufactured, refined, transferred,
         produced,  imported,  used, or processed from or by the Facilities,  or
         from or by any other properties and assets (whether real, personal,  or
         mixed) in which Sellers or any Acquired Company has or had an interest,
         or  to  the  Knowledge  of  Sellers  and  the  Acquired  Companies  any
         geologically or hydrologically adjoining property,  whether by Sellers,
         any Acquired Company, or any other Person.

                  (g) Sellers have  delivered to Buyer true and complete  copies
         and results of any reports,  studies,  analyses,  tests,  or monitoring
         possessed or initiated by Sellers or any Acquired Company pertaining to
         Hazardous  Materials  or  Hazardous  Activities  in,  on,  or under the
         Facilities,  or concerning compliance by Sellers, any Acquired Company,
         or any  other  Person  for  whose  conduct  they  are  or  may be  held
         responsible, with Environmental Laws.

3.20     EMPLOYEES

                  (a) Part 3.20 of the Disclosure Letter contains a complete and
         accurate  list  of the  following  information  for  each  employee  or
         director of the Acquired Companies, including each employee on leave of
         absence  or  layoff  status:   employer;   name;  job  title;   current
         compensation  paid or  payable  and any  change in  compensation  since
         December 31, 1996; vacation accrued;  and service credited for purposes
         of vesting and eligibility to participate under any Acquired  Company's
         pension,   retirement,   profit-sharing,    thrift-savings,    deferred
         compensation,  stock bonus,  stock option,  cash bonus,  employee stock
         ownership  (including  investment  credit or payroll stock  ownership),
         severance pay,  insurance,  medical,  welfare,  or vacation plan, other
         Employee  Pension Benefit Plan or Employee Welfare Benefit Plan, or any
         other employee benefit plan or any Director Plan.


                                       27

<PAGE>

                  (b) No employee or director of any Acquired Company is a party
         to, or is otherwise bound by, any agreement or  arrangement,  including
         any confidentiality,  noncompetition,  or proprietary rights agreement,
         between such  employee or director  and any other Person  ("Proprietary
         Rights Agreement") that in any way adversely affects or will affect (i)
         the  performance  of his  duties  as an  employee  or  director  of the
         Acquired  Companies,  or (ii) the  ability of any  Acquired  Company to
         conduct its business,  including any Proprietary  Rights Agreement with
         Sellers or the Acquired Companies by any such employee or director.  To
         Sellers' Knowledge, no director,  officer, or other key employee of any
         Acquired Company intends to terminate his employment with such Acquired
         Company.

                  (c)  Part  3.20  of the  Disclosure  Letter  also  contains  a
         complete  and  accurate  list of the  following  information  for  each
         retired  employee  or  director  of the  Acquired  Companies,  or their
         dependents,  receiving benefits or scheduled to receive benefits in the
         future: name, pension benefit, pension option election, retiree medical
         insurance  coverage,   retiree  life  insurance  coverage,   and  other
         benefits.

3.21     LABOR RELATIONS; COMPLIANCE

         Since December 31, 1996, no Acquired  Company has been or is a party to
any  collective  bargaining or other labor  Contract.  Since  December 31, 1996,
there has not been, there is not presently pending or existing,  and to Sellers'
Knowledge there is not Threatened,  (a) any strike,  slowdown,  picketing,  work
stoppage, or employee grievance process, (b) any Proceeding against or affecting
any Acquired Company relating to the alleged  violation of any Legal Requirement
pertaining  to labor  relations or employment  matters,  including any charge or
complaint filed by an employee or union with the National Labor Relations Board,
the Equal  Employment  Opportunity  Commission,  or any comparable  Governmental
Body,  organizational  activity, or other labor or employment dispute against or
affecting  any  of  the  Acquired  Companies  or  their  premises,  or  (c)  any
application  for  certification  of a collective  bargaining  agent. To Sellers'
Knowledge no event has occurred or  circumstance  exists that could  provide the
basis for any work stoppage or other labor  dispute.  There is no lockout of any
employees by any Acquired  Company,  and no such action is  contemplated  by any
Acquired  Company.  Each Acquired  Company has complied in all respects with all
Legal  Requirements  relating  to  employment,   equal  employment  opportunity,
nondiscrimination,  immigration,  wages, hours, benefits, collective bargaining,
the  payment of social  security  and  similar  taxes,  occupational  safety and
health, and plant closing.  No Acquired Company is liable for the payment of any
compensation,  damages,  taxes,  fines,  penalties,  or other  amounts,  however
designated, for failure to comply with any of the foregoing Legal Requirements.

3.22     INTELLECTUAL PROPERTY

                  (a) Intellectual  Property  Assets--The   term   "Intellectual
         Property Assets" includes:


                                       28

<PAGE>

                           (i)  the name  "Fan-Tastic" and  "Fan-A-Mania",   all
                  fictional  business  names,  trading  names,  registered   and
                  unregistered  trademarks,  service  marks,  and   applications
                  (collectively, "Marks");

                           (ii) all patents, patent applications, and inventions
                  and   discoveries   that   may  be  patentable  (collectively,
                  "Patents");

                           (iii) all  copyrights  in  both published  works  and
                  unpublished works (collectively, "Copyrights");

                           (iv) all rights in mask  works (collectively, "Rights
                  in Mask Works"); and

                           (v) all   know-how,   trade   secrets,   confidential
                  information, customer lists, software, technical  information,
                  data, process  technology,  plans, drawings, and  blue  prints
                  (collectively, "Trade Secrets");  owned, used,  or licensed by
                  any Acquired Company as licensee or licensor.

                  (b) Agreements--Part 3.22(b) of the Disclosure Letter contains
         a complete and accurate  list and summary  description,  including  any
         royalties paid or received by the Acquired Companies,  of all Contracts
         relating  to the  Intellectual  Property  Assets to which any  Acquired
         Company is a party or by which any  Acquired  Company is bound,  except
         for any license implied by the sale of a product and perpetual, paid-up
         licenses for commonly  available software programs with a value of less
         than $5,000 under which an Acquired Company is the licensee.  There are
         no outstanding and, to Sellers'  Knowledge,  no Threatened  disputes or
         disagreements with respect to any such agreement.

                  (c)      Know-How Necessary for the Business

                           (i) The  Intellectual  Property  Assets are all those
                  necessary  for  the  operation  of  the  Acquired   Companies'
                  businesses as they are currently  conducted or as reflected in
                  the business plan given to Buyer.  One or more of the Acquired
                  Companies  is the owner of all right,  title,  and interest in
                  and to each of the  Intellectual  Property  Assets,  free  and
                  clear of all liens, security interests, charges, encumbrances,
                  equities,  and other adverse claims,  and has the right to use
                  without  payment  to a  third  party  all of the  Intellectual
                  Property Assets.

                           (ii) Except  as  set  forth in  Part 3.22(c)  of  the
                  Disclosure Letter, all former and current  employees of   each
                  Acquired  Company have executed written  Contracts with one or
                  more of the Acquired Companies that assign to one or  more  of
                  the   Acquired  Companies   all  rights  to   any  inventions,
                  improvements, discoveries,  or information  relating  to   the
                  business of any Acquired  Company. No employee of any Acquired
                  Company has entered into any Contract that restricts or limits
                  in any way the scope or type of work in which the employee may
                  
                                       29

<PAGE>

                  be engaged or requires  the  employee to transfer,  assign, or
                  disclose information  concerning his work to anyone other than
                  one or more of the Acquired Companies.

                  (d)      Patents

                           (i) Part 3.22(d) of the Disclosure  Letter contains a
                  complete  and  accurate  list and summary  description  of all
                  Patents. One or more of the Acquired Companies is the owner of
                  all right,  title, and interest in and to each of the Patents,
                  free and  clear of all  liens,  security  interests,  charges,
                  encumbrances, entities, and other adverse claims.

                           (ii)  All of the  issued  Patents  are  currently  in
                  compliance with formal legal  requirements  (including payment
                  of filing,  examination,  and  maintenance  fees and proofs of
                  working  or  use),  are  valid  and  enforceable,  and are not
                  subject to any  maintenance  fees or taxes or actions  falling
                  due within ninety days after the Closing Date.

                           (iii) No Patent  has been or is now  involved  in any
                  interference,    reissue,    reexamination,    or   opposition
                  proceeding.  To Sellers'  Knowledge,  there is no  potentially
                  interfering patent or patent application of any third party.

                           (iv)  No  Patent  is   infringed   or,  to   Sellers'
                  Knowledge,  has been challenged or threatened in any way. None
                  of the  products  manufactured  and sold,  nor any  process or
                  know-how used, by any Acquired Company infringes or is alleged
                  to infringe any patent or other proprietary right of any other
                  Person.

                           (v)  All  products  made,  used,  or sold  under  the
                  Patents have been marked with the proper patent notice.

                  (e)      Trademarks

                           (i) Part  3.22(e)  of  Disclosure  Letter  contains a
                  complete  and  accurate  list and summary  description  of all
                  Marks.  One or more of the Acquired  Companies is the owner of
                  all right,  title,  and  interest in and to each of the Marks,
                  free and  clear of all  liens,  security  interests,  charges,
                  encumbrances, equities, and other adverse claims.

                           (ii) All Marks  that have  been  registered  with the
                  United  States  Patent and  Trademark  Office are currently in
                  compliance with all formal legal  requirements  (including the
                  timely  post-registration  filing  of  affidavits  of use  and
                  incontestability  and  renewal  applications),  are  valid and
                  enforceable,  and are not subject to any  maintenance  fees or
                  taxes or  actions  falling  due within  ninety  days after the
                  Closing Date.

                                       30

<PAGE>

                           (iii)  No Mark  has  been or is now  involved  in any
                  opposition,  invalidation,  or  cancellation  and, to Sellers'
                  Knowledge,  no such action is  Threatened  with the respect to
                  any of the Marks.

                           (iv) To Sellers'  Knowledge  there  is no potentially
                  interfering trademark  or trademark application of  any  third
                  party.

                           (v) No Mark is infringed or,  to  Sellers' Knowledge,
                  has been  challenged or threatened  in  any  way. None of  the
                  Marks used by any Acquired Company infringes  or  is   alleged
                  to infringe  any  trade  name,  trademark, or service  mark of
                  any third party.

                           (vi) All  products  and  materials  containing a Mark
                  bear the proper federal registration notice where permitted by
                  law.

                  (f) Copyrights

                           (i) Part 3.22(f) of the Disclosure  Letter contains a
                  complete  and  accurate  list and summary  description  of all
                  Copyrights. One or more of the Acquired Companies is the owner
                  of all  right,  title,  and  interest  in and to  each  of the
                  Copyrights,  free and clear of all liens,  security interests,
                  charges, encumbrances, equities, and other adverse claims.

                           (ii) All the Copyrights  have been registered and are
                  currently in compliance  with formal legal  requirements,  are
                  valid and enforceable,  and are not subject to any maintenance
                  fees or taxes or actions falling due within ninety days
                  after the date of Closing.

                           (iii) No  Copyright  is  infringed  or,  to  Sellers'
                  Knowledge,  has been challenged or threatened in any way. None
                  of the subject matter of any of the Copyrights infringes or is
                  alleged to infringe  any  copyright of any third party or is a
                  derivative work based on the work of a third party.

                           (iv) All works  encompassed by  the  Copyrights  have
                  been marked with  the proper copyright notice.

                  (g)      Trade Secrets

                           (i)  With   respect   to  each  Trade   Secret,   the
                  documentation  relating  to  such  Trade  Secret  is  current,
                  accurate, and sufficient in detail and content to identify and
                  explain  it and to  allow  its  full and  proper  use  without
                  reliance on the  knowledge or memory of any individual.


                                       31

<PAGE>

                           (ii)  Sellers and the Acquired  Companies  have taken
                  all   reasonable   precautions   to   protect   the   secrecy,
                  confidentiality, and value of their Trade Secrets.

                           (iii)  One or more of the Acquired Companies has good
                  title and an absolute (but not necessarily exclusive) right to
                  use the Trade Secrets. The Trade  Secrets are  not part of the
                  public knowledge or  literature, and,  to Sellers'  Knowledge,
                  have not been  used, divulged, or appropriated  either for the
                  benefit  of any Person (other than one or more of the Acquired
                  Companies) or to the detriment of the Acquired  Companies.  No
                  Trade Secret  is subject  to any  adverse claim  or  has  been
                  challenged or threatened in any way.

3.23     CERTAIN PAYMENTS

         Since  December 31,  1996,  no Acquired  Company or director,  officer,
agent, or employee of any Acquired Company,  or to Sellers'  Knowledge any other
Person associated with or acting for or on behalf of any Acquired  Company,  has
directly or indirectly (a) made any contribution,  gift, bribe, rebate,  payoff,
influence payment,  kickback, or other payment to any Person, private or public,
regardless  of form,  whether  in money,  property,  or  services  (i) to obtain
favorable  treatment in securing business,  (ii) to pay for favorable  treatment
for  business  secured,  (iii) to  obtain  special  concessions  or for  special
concessions  already obtained,  for or in respect of any Acquired Company or any
Affiliate of an Acquired Company, or (iv) in violation of any Legal Requirement,
(b)  established  or maintained  any fund or asset that has not been recorded in
the books and records of the Acquired Companies.

3.24     DISCLOSURE

                  (a) No representation or warranty of Sellers in this Agreement
         and no  statement  in the  Disclosure  Letter omits to state a material
         fact  necessary to make the statements  herein or therein,  in light of
         the circumstances in which they were made, not misleading.

                  (b) No notice  given  pursuant to Section 6.5 will contain any
         untrue statement or omit to state a material fact necessary to make the
         statements therein or in this Agreement,  in light of the circumstances
         in which they were made, not misleading.

                  (c)  There is no fact  known  to  Sellers  that  has  specific
         application  to any Seller or any Acquired  Company (other than general
         economic or industry  conditions) and that materially adversely affects
         or, as far as Sellers can reasonably foresee, materially threatens, the
         assets,  business,  prospects,   financial  condition,  or  results  of
         operations of the Acquired Companies (on a consolidated basis) that has
         not been set forth in this Agreement or the Disclosure Letter.

                                       32

<PAGE>

3.25     RELATIONSHIPS WITH RELATED PERSONS

          No Seller or any Related Person of Sellers or of any Acquired  Company
has,  or since the first day of the next to last  completed  fiscal  year of the
Acquired  Companies  has  had,  any  interest  in any  property  (whether  real,
personal, or mixed and whether tangible or intangible), used in or pertaining to
the Acquired Companies'  businesses.  No Seller or any Related Person of Sellers
or of any  Acquired  Company  is,  or since  the  first  day of the next to last
completed  fiscal year of the  Acquired  Companies  has owned (of record or as a
beneficial  owner) an equity  interest or any other financial or profit interest
in, a Person that has (i) had business dealings or a material financial interest
in any  transaction  with any Acquired  Company,  or (ii) engaged in competition
with any  Acquired  Company with respect to any line of the products or services
of such Acquired Company (a "Competing Business") in any market presently served
by such  Acquired  Company  except for less than one percent of the  outstanding
capital  stock  of  any  Competing  Business  that  is  publicly  traded  on any
recognized  exchange or in the over-the-counter  market.  Except as set forth in
Part 3.25 of the Disclosure  Letter,  no Seller or any Related Person of Sellers
or of any Acquired  Company is a party to any Contract with, or has any claim or
right against, any Acquired Company.

3.26     BROKERS OR FINDERS

         Sellers and their  agents have  incurred no  obligation  or  liability,
contingent or otherwise,  for brokerage or finders' fees or agents'  commissions
or other similar payment in connection with this Agreement.

              4. REPRESENTATIONS AND WARRANTIES OF PAPENFUSS, SR.,
                       PAPENFUSS, JR., PUGMIRE AND TOOLSON

          As used in this Section 4, except as otherwise noted,  "Sellers" shall
mean B. Willes Papenfuss,  Sr., B. Willis  Papenfuss,  Jr., Tom Pugmire and Andy
Toolson only. B. Willes Papenfuss,  Sr., B. Willis  Papenfuss,  Jr., Tom Pugmire
and Andy Toolson, individually represent and warrant to buyer as follows:

4.1      AUTHORITY; NO CONFLICT

                  (a) This Agreement  constitutes the legal,  valid, and binding
         obligation of Sellers,  enforceable  against Sellers in accordance with
         its terms.  Upon the  execution and delivery by Sellers of the Sellers'
         Releases,   (collectively,   the  "Sellers'  Closing  Documents"),  the
         Sellers'  Closing  Documents  will  constitute  the legal,  valid,  and
         binding   obligations  of  Sellers,   enforceable  against  Sellers  in
         accordance with their respective  terms.  Sellers have the absolute and
         unrestricted  right,  power,  authority,  and  capacity  to execute and
         deliver  this  Agreement  and the  Sellers'  Closing  Documents  and to
         perform their obligations under this Agreement and the Sellers' Closing
         Documents.


                                       33

<PAGE>

         Sellers  will not be  required  to give any  notice  to or  obtain  any
Consent from any Person in  connection  with the  execution and delivery of this
Agreement  or  the  consummation or  performance  of  any  of  the  Contemplated
Transactions.

                  (b) Sellers  are  acquiring  the Class D preferred  shares for
         their own account and not with a view to their distribution  within the
         meaning of Section 2(11) of the Securities Act.

4.2      OWNERSHIP OF SHARES

         Sellers are and will be on the Closing  Date the record and  beneficial
owners and  holders of the Shares set  opposite  their names on Schedule A, free
and clear of all Encumbrances.

4.3      NO UNDISCLOSED LIABILITIES

         To the knowledge of Sellers, the Acquired Companies have no liabilities
or  obligations of any nature  (whether  known or unknown and whether  absolute,
accrued,  contingent,  or  otherwise)  except  for  liabilities  or  obligations
reflected  or  reserved  against in the Balance  Sheet and  current  liabilities
incurred in the Ordinary Course of Business since the respective dates thereof.

4.4      DISCLOSURE

                  To the knowledge of Sellers:

                  (a) No  representation  or  warranty of Sellers (as defined in
         the  first  paragraph  of this  Agreement)  contained  in  Section 3 or
         Section 4 of this Agreement and no statement in the  Disclosure  Letter
         omits to state a material fact necessary to make the statements  herein
         or therein,  in light of the circumstances in which they were made, not
         misleading.

                  (b) No notice  given  pursuant to Section 6.5 will contain any
         untrue statement or omit to state a material fact necessary to make the
         statements therein or in this Agreement,  in light of the circumstances
         in which they were made, not misleading.

                  (c)  There is no fact  known  to  Sellers  that  has  specific
         application  to any Seller or any Acquired  Company (other than general
         economic or industry  conditions) and that materially adversely affects
         or, as far as Sellers can reasonably foresee, materially threatens, the
         assets,  business,  prospects,   financial  condition,  or  results  of
         operations of the Acquired Companies (on a consolidated basis) that has
         not been set forth in this Agreement or the Disclosure Letter.



                                       34

<PAGE>
                   5. REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Sellers as follows:

5.1      ORGANIZATION AND GOOD STANDING

         Buyer is a corporation duly organized,  validly  existing,  and in good
standing under the laws of the State of Utah.

5.2      AUTHORITY; NO CONFLICT

                  (a) This Agreement constitutes  the legal, valid,  and binding
         obligation of  Buyer, enforceable against Buyer in  accordance with its
         terms. Upon the execution and delivery  by Buyer of the Purchase Price,
         and the  Employment  Agreements, (collectively,  the  "Buyer's  Closing
         Documents"), the Buyer's Closing Documents will constitute the   legal,
         valid, and binding obligations  of Buyer, enforceable  against Buyer in
         accordance  with their  respective terms.  Buyer  has the  absolute and
         unrestricted right, power, and  authority to execute  and deliver  this
         Agreement  and  the  Buyer's  Closing  Documents  and  to  perform  its
         obligations under this Agreement and the Buyer's Closing Documents.

                  (b) Except as set forth in Schedule 5.2, neither the execution
         and  delivery  of this  Agreement  by  Buyer  nor the  consummation  or
         performance of any of the Contemplated  Transactions by Buyer will give
         any Person the right to prevent, delay, or otherwise interfere with any
         of the Contemplated Transactions pursuant to:

                           (i)      any   provision  of  Buyer's  Organizational
                  Documents;

                           (ii)     any  resolution  adopted  by the  board   of
                  directors  or the stockholders  of Buyer;

                           (iii)    any  Legal  Requirement  or  Order to  which
                  Buyer may be subject; or

                           (iv)     any  Contract  to which  Buyer  is  a  party
                  or  by   which   Buyer   may  be  bound.

         Except  as set  forth  in  Schedule  5.2,  Buyer is not and will not be
required to obtain any Consent from any Person in connection  with the execution
and delivery of this Agreement or the  consummation or performance of any of the
Contemplated Transactions.

5.3      INVESTMENT INTENT

          Buyer is acquiring  the Shares for its own account and not with a view
to their distribution within the meaning of Section 2(11) of the Securities Act.

                                       35

<PAGE>


5.4      CERTAIN PROCEEDINGS

         There is no pending  Proceeding  that has been commenced  against Buyer
and that  challenges,  or may have the effect of  preventing,  delaying,  making
illegal, or otherwise interfering with, any of the Contemplated Transactions. To
Buyer's Knowledge, no such Proceeding has been Threatened.

5.5      SEC FILINGS

         Buyer has furnished Sellers with copies of Form 10-K and Forms 10-Q for
all period  since March 31, 1995.  All such  documents do not contain any untrue
statements  nor do they  omit to  state  any  statement  necessary  to make  the
statements  made not misleading.  All such documents  comply with all applicable
rules and regulations of the United States Securities and Exchange Commission.

5.6      BROKERS OR FINDERS

         Buyer and its  officers  and agents  have  incurred  no  obligation  or
liability,  contingent or  otherwise,  for brokerage or finders' fees or agents'
commissions or other similar  payment in connection with this Agreement and will
indemnify and hold Sellers  harmless from any such payment  alleged to be due by
or through Buyer as a result of the action of Buyer or its officers or agents.

                  6. COVENANTS OF SELLERS PRIOR TO CLOSING DATE

6.1      ACCESS AND INVESTIGATION

          Between the date of this Agreement and the Closing Date, Sellers will,
and will cause each  Acquired  Company  and its  Representatives  to, (a) afford
Buyer and its Representatives and prospective lenders and their  Representatives
(collectively,  "Buyer's  Advisors")  full  and  free  access  to each  Acquired
Company's personnel, properties (including subsurface testing), contracts, books
and  records,  and other  documents  and data,  (b)  furnish  Buyer and  Buyer's
Advisors  with  copies  of all such  contracts,  books  and  records,  and other
existing  documents and data as Buyer may  reasonably  request,  and (c) furnish
Buyer and Buyer's Advisors with such additional financial,  operating, and other
data and information as Buyer may reasonably request.

6.2      OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES

         Between the date of this Agreement and the Closing Date,  Sellers will,
and will cause each Acquired Company to:

                  (a) conduct the business of such  Acquired Company only in the
         Ordinary Course of Business;


                                       36

<PAGE>

                  (b) use their Best  Efforts  to  preserve  intact the  current
         business  organization  of such Acquired  Company,  keep  available the
         services  of the  current  officers,  employees,  and  agents  of  such
         Acquired  Company,  and  maintain  the  relations  and good  will  with
         suppliers,  customers,  landlords,  creditors,  employees,  agents, and
         others having business relationships with such Acquired Company;

                  (c) confer with Buyer  concerning  operational  matters  of  a
         material nature; and

                  (d) otherwise  report periodically  to  Buyer  concerning  the
         status of  the business,  operations,  and finances  of  such  Acquired
         Company.

6.3      NEGATIVE COVENANT

         Except as otherwise expressly permitted by this Agreement,  between the
date of this  Agreement and the Closing  Date,  Sellers will not, and will cause
each Acquired  Company not to, without the prior written consent of Buyer,  take
any affirmative  action,  or fail to take any reasonable  action within their or
its control, as a result of which any of the changes or events listed in Section
3.16 is likely to occur.

6.4      REQUIRED APPROVALS

          As promptly as practicable  after the date of this Agreement,  Sellers
will,  and will cause each  Acquired  Company to,  make all filings  required by
Legal  Requirements  to be made by them in order to consummate the  Contemplated
Transactions (including all filings under the HSR Act). Between the date of this
Agreement  and the Closing  Date,  Sellers  will,  and will cause each  Acquired
Company to, (a)  cooperate  with Buyer with  respect to all  filings  that Buyer
elects to make or is required by Legal  Requirements  to make in connection with
the  Contemplated  Transactions,  and (b) cooperate  with Buyer in obtaining all
consents  identified in Schedule 5.2 (including  taking all actions requested by
Buyer to cause early termination of any applicable  waiting period under the HSR
Act).

6.5      NOTIFICATION

         Between the date of this  Agreement and the Closing  Date,  each Seller
will  promptly  notify Buyer in writing if such Seller or any  Acquired  Company
becomes  aware of any fact or condition  that causes or  constitutes a Breach of
any of Sellers' representations and warranties as of the date of this Agreement,
or if such Seller or any Acquired  Company becomes aware of the occurrence after
the date of this  Agreement  of any fact or  condition  that  would  (except  as
expressly  contemplated by this  Agreement)  cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of  occurrence  or discovery of such fact or  condition.  Should any
such  fact or  condition  require  any  change in the  Disclosure  Letter if the
Disclosure Letter were dated the date of the occurrence or discovery of any such
fact or condition,  Sellers will  promptly  deliver to Buyer a supplement to the
Disclosure  Letter specifying such change.  During the same period,  each Seller

                                       37

<PAGE>

will  promptly  notify Buyer of the  occurrence of any Breach of any covenant of
Sellers in this  Section 6 or of the  occurrence  of any event that may make the
satisfaction of the conditions in Section 8 impossible or unlikely.

6.6      PAYMENT OF INDEBTEDNESS BY RELATED PERSONS

         Except as expressly provided in this Agreement,  Sellers will cause all
indebtedness  owed to an Acquired Company by any Seller or any Related Person of
any Seller to be paid in full prior to Closing.

6.7      NO NEGOTIATION

         Until such time, if any, as this  Agreement is  terminated  pursuant to
Section 10,  Sellers will not, and will cause each Acquired  Company and each of
their  Representatives  not to,  directly or indirectly  solicit,  initiate,  or
encourage any inquiries or proposals from,  discuss or negotiate  with,  provide
any  non-public  information  to, or  consider  the  merits  of any  unsolicited
inquiries  or  proposals  from,  any Person  (other than Buyer)  relating to any
transaction  involving  the sale of the  business  or assets  (other than in the
Ordinary  Course of  Business) of any  Acquired  Company,  or any of the capital
stock  of  any  Acquired  Company,  or  any  merger,   consolidation,   business
combination, or similar transaction involving any Acquired Company.

6.8      BEST EFFORTS

         Between the date of this  Agreement and the Closing Date,  Sellers will
use  their  Best  Efforts  to cause the  conditions  in  Sections  8 and 9 to be
satisfied.

                   7. COVENANTS OF BUYER PRIOR TO CLOSING DATE

7.1      APPROVALS OF GOVERNMENTAL BODIES

          As promptly as  practicable  after the date of this  Agreement,  Buyer
will, and will cause each of its Related  Persons to, make all filings  required
by  Legal  Requirements  to be  made  by them  to  consummate  the  Contemplated
Transactions.  Between the date of this  Agreement and the Closing  Date,  Buyer
will, and will cause each Related Person to, cooperate with Sellers with respect
to all filings  that  Sellers  are  required  by Legal  Requirements  to make in
connection with the Contemplated  Transactions,  and (ii) cooperate with Sellers
in  obtaining  all consents  identified  in Part 3.2 of the  Disclosure  Letter;
provided  that this  Agreement  will not require Buyer to dispose of or make any
change in any portion of its  business or to incur any other  burden to obtain a
Governmental Authorization.

                                       38

<PAGE>


7.2      BEST EFFORTS

         Except as set forth in the proviso to Section 7.1,  between the date of
this  Agreement and the Closing  Date,  Buyer will use its Best Efforts to cause
the conditions in Sections 8 and 9 to be satisfied.

             8. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

Buyer's obligation to purchase the Shares and to take the other actions required
to be taken by Buyer at the Closing is subject to the satisfaction,  at or prior
to the Closing, of each of the following  conditions (any of which may be waived
by Buyer, in whole or in part):

8.1      ACCURACY OF REPRESENTATIONS

                  (a) All of Sellers'  representations  and  warranties  in this
         Agreement (considered collectively),  and each of these representations
         and warranties  (considered  individually),  must have been accurate in
         all  material  respects as of the date of this  Agreement,  and must be
         accurate in all material  respects as of the Closing Date as if made on
         the  Closing  Date,  without  giving  effect to any  supplement  to the
         Disclosure Letter.

                  (b)  Each  of  Sellers'   representations  and  warranties  in
         Sections  3.3,  3.4,  3.12,  and 3.24 must have  been  accurate  in all
         respects as of the date of this Agreement,  and must be accurate in all
         respects as of the Closing Date as if made on the Closing Date, without
         giving effect to any supplement to the Disclosure Letter.

8.2      SELLERS' PERFORMANCE

                  (a) All of the  covenants  and  obligations  that  Sellers are
         required to perform or to comply with pursuant to this  Agreement at or
         prior  to the  Closing  (considered  collectively),  and  each of these
         covenants and  obligations  (considered  individually),  must have been
         duly performed and complied with in all material respects.

                  (b) Each  document  required  to  be  delivered   pursuant  to
         Section 2.4  must have been delivered,  and each of the other covenants
         and obligations in Sections 6.4 and 6.8  must  have been  performed and
         complied with in all respects.

8.3      CONSENTS

         Each  of the  Consents  identified  in  subpart  b of  Part  3.2 of the
Disclosure  Letter,  and each Consent identified in Schedule 5.2, must have been
obtained and must be in full force and effect.

                                       39

<PAGE>


8.4      ADDITIONAL DOCUMENTS

         Each of the following documents must have been delivered to Buyer:

                  (a) such  documents  as Buyer may  reasonably  request for the
         purpose  of  (i)   evidencing   the   accuracy   of  any  of   Sellers'
         representations and warranties,  (ii) evidencing the performance by any
         Seller  of, or the  compliance  by any Seller  with,  any  covenant  or
         obligation  required to be performed  or complied  with by such Seller,
         (iii) evidencing the satisfaction of any condition  referred to in this
         Section  8,  or  (iv)  otherwise   facilitating   the  consummation  or
         performance of any of the Contemplated Transactions.

8.5      NO PROCEEDINGS

         Since the date of this Agreement, there must not have been commenced or
Threatened  against  Buyer,  or against any Person  affiliated  with Buyer,  any
Proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions,  or (b) that may have the
effect of preventing,  delaying,  making illegal, or otherwise  interfering with
any of the Contemplated Transactions.

8.6      NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS

          There  must not have been made or  Threatened  by any Person any claim
asserting that such Person (a) is the holder or the beneficial  owner of, or has
the right to acquire or to obtain beneficial  ownership of, any stock of, or any
other voting,  equity, or ownership interest in, any of the Acquired  Companies,
or (b) is entitled to all or any portion of the Purchase  Price  payable for the
Shares.

8.7      NO PROHIBITION

         Neither the consummation nor the performance of any of the Contemplated
Transactions  will,  directly or indirectly  (with or without notice or lapse of
time),  materially  contravene,  or  conflict  with,  or  result  in a  material
violation of, or cause Buyer or any Person  affiliated  with Buyer to suffer any
material adverse  consequence  under,  (a) any applicable  Legal  Requirement or
Order,  or  (b)  any  Legal  Requirement  or  Order  that  has  been  published,
introduced, or otherwise proposed by or before any Governmental Body.

             9. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE

Sellers' obligation to sell the Shares and to take the other actions required to
be taken by Sellers at the Closing is subject to the  satisfaction,  at or prior
to the Closing, of each of the following  conditions (any of which may be waived
by Sellers, in whole or in part):


                                       40

<PAGE>


9.1      ACCURACY OF REPRESENTATIONS

         All  of  Buyer's  representations  and  warranties  in  this  Agreement
(considered  collectively),  and each of these  representations  and  warranties
(considered  individually),  must have been accurate in all material respects as
of the date of this  Agreement and must be accurate in all material  respects as
of the Closing Date as if made on the Closing Date.

9.2      BUYER'S PERFORMANCE

                  (a)  All  of the  covenants  and  obligations  that  Buyer  is
         required to perform or to comply with pursuant to this  Agreement at or
         prior  to the  Closing  (considered  collectively),  and  each of these
         covenants and  obligations  (considered  individually),  must have been
         performed and complied with in all material respects.

                  (b) Buyer must have delivered  each of the documents  required
         to be delivered  by Buyer pursuant to Section 2.4.

9.3      CONSENTS

         Each  of the  Consents  identified  in  Subpart  b of  Part  3.2 of the
Disclosure Letter must have been obtained and must be in full force and effect.

9.4      ADDITIONAL DOCUMENTS

         Buyer must have  caused the  following  documents  to be  delivered  to
Sellers:

                  (a) such documents as Sellers may  reasonably  request for the
         purpose  of  (i)  evidencing  the  accuracy  of any  representation  or
         warranty of Buyer,  (ii) evidencing the performance by Buyer of, or the
         compliance  by Buyer with,  any covenant or  obligation  required to be
         performed or complied with by Buyer,  (iii) evidencing the satisfaction
         of any  condition  referred  to in this  Section  9, or (iv)  otherwise
         facilitating the consummation of any of the Contemplated Transactions.

9.5      NO INJUNCTION

         There must not be in effect any Legal  Requirement or any injunction or
other Order that (a) prohibits  the sale of the Shares by Sellers to Buyer,  and
(b) has been adopted or issued,  or has otherwise  become  effective,  since the
date of this Agreement.


                                       41

<PAGE>

                                 10. TERMINATION

10.1     TERMINATION EVENTS

         This  Agreement  may, by notice  given prior to or at the  Closing,  be
terminated:

                  (a) by either Buyer or  Sellers if a  material  Breach  of any
         provision of this Agreement has been committed by the other party   and
         such Breach has not been waived;

                  (b)  (i)  by Buyer if any of  the  conditions  in  Section   8
         has  not been satisfied  as of the  Closing Date or if  satisfaction of
         such a condition  is  or becomes  impossible (other  than  through  the
         failure of Buyer to comply  with its obligations  under this Agreement)
         and Buyer has not  waived such condition on or before the Closing Date;
         or  (ii) by Sellers, if any of the conditions in Section 9 has not been
         satisfied as of the Closing Date or if satisfaction of such a condition
         is or becomes impossible (other than through the failure of Sellers  to
         comply with their  obligations under  this Agreement) and  Sellers have
         not waived such condition on or before the Closing Date;

                  (c) by mutual consent of Buyer and Sellers; or

                  (d) by either Buyer or Sellers if the Closing has not occurred
         (other than through the failure of any party seeking to terminate  this
         Agreement to comply fully with its obligations under this Agreement) on
         or before  March 31, 1997, or such later date  as the parties may agree
         upon.

10.2     EFFECT OF TERMINATION

         Each party's right of termination  under Section 10.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this Agreement
is terminated  pursuant to Section 10.1, all further  obligations of the parties
under this Agreement  will  terminate,  except that the  obligations in Sections
12.1 and  12.3  will  survive;  provided,  however,  that if this  Agreement  is
terminated  by a party because of the Breach of the Agreement by the other party
or because one or more of the conditions to the terminating  party's obligations
under this  Agreement is not satisfied as a result of the other party's  failure
to comply with its  obligations  under this Agreement,  the terminating  party's
right to pursue all legal remedies will survive such termination unimpaired.

                          11. INDEMNIFICATION; REMEDIES

11.1     SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE

         All  representations,  warranties,  covenants,  and obligations in this
Agreement,  the Disclosure Letter, the supplements to the Disclosure Letter, the
certificate  delivered pursuant to Section 2.4(a)(v),  and any other certificate

                                       42

<PAGE>

or document delivered  pursuant to this Agreement will survive the Closing.  The
right to  indemnification,  payment  of Damages  or other  remedy  based on such
representations,  warranties, covenants, and obligations will not be affected by
any  investigation  conducted  with  respect to, or any  Knowledge  acquired (or
capable of being  acquired) at any time,  whether  before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or  inaccuracy  of  or  compliance  with,  any  such  representation,  warranty,
covenant,  or obligation.  The waiver of any condition  based on the accuracy of
any representation or warranty,  or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations,  warranties,  covenants,
and obligations.

11.2     INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS

         Barry  Papenfuss,  Tim Papenfuss and Greg Park,  jointly and severally,
will  indemnify  and hold  harmless  Buyer,  the Acquired  Companies,  and their
respective  Representatives,  stockholders,  controlling persons, and affiliates
(collectively,  the "Indemnified  Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability,  claim, damage (including incidental
and  consequential  damages),  expense  (including  costs of  investigation  and
defense and reasonable  attorneys' fees) or diminution of value,  whether or not
involving a third-party claim (collectively,  "Damages"),  arising,  directly or
indirectly, from or in connection with:

                  (a) any  Breach  of any  representation  or  warranty  made by
         Sellers in this Agreement  (without  giving effect to any supplement to
         the Disclosure  Letter),  the Disclosure Letter, the supplements to the
         Disclosure  Letter, or any other  certificate or document  delivered by
         Sellers pursuant to this Agreement;

                  (b) any  Breach  of any  representation  or  warranty  made by
         Sellers in this  Agreement as if such  representation  or warranty were
         made  on  and as of the  Closing  Date  without  giving  effect  to any
         supplement to the Disclosure Letter, other than any such Breach that is
         disclosed in a  supplement  to the  Disclosure  Letter and is expressly
         identified in the certificate  delivered  pursuant to Section 2.4(a)(v)
         as having  caused the  condition  specified  in  Section  8.1 not to be
         satisfied;

                  (c) any Breach by any Seller  of any covenant or obligation of
         such Seller in this Agreement;

                  (d) any product  shipped or  manufactured by,  or any services
         provided  by, any  Acquired Company prior to the Closing Date;

                  (e) any matter disclosed in parts 3.11, 3.13, 3.15 and 3.19 of
         the Disclosure Letter; or

                  (f) any claim by any Person for brokerage or finder's fees  or
         commissions  or   similar   payments  based   upon  any   agreement  or
         understanding alleged to have been made by  any  such  Person  with any

                                       43

<PAGE>


         Seller or any  Acquired Company (or any Person acting  on their behalf)
         in connection with any of the Contemplated Transactions.

         The remedies  provided in this Section 11.2 will not be exclusive of or
limit any other remedies that may be available to Buyer or the other Indemnified
Persons.

11.3     INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER

         Buyer will indemnify and hold harmless Sellers, and will pay to Sellers
the amount of any Damages arising, directly or indirectly, from or in connection
with (a) any  Breach of any  representation  or  warranty  made by Buyer in this
Agreement or in any  certificate  delivered by Buyer pursuant to this Agreement,
(b) any  Breach  by  Buyer  of any  covenant  or  obligation  of  Buyer  in this
Agreement,  or (c) any claim by any Person for  brokerage  or  finder's  fees or
commissions  or similar  payments  based  upon any  agreement  or  understanding
alleged to have been made by such Person with Buyer (or any Person acting on its
behalf) in connection with any of the Contemplated Transactions.

11.4     TIME LIMITATIONS

         If  the  Closing   occurs,   Sellers  will  have  no   liability   (for
indemnification or otherwise) with respect to any representation or warranty, or
covenant or  obligation  to be performed  and complied with prior to the Closing
Date,  other than those in Sections  3.3,  3.11,  3.13,  and 3.19,  unless on or
before March 31, 1998 Buyer notifies  Sellers of a claim  specifying the factual
basis of that claim in  reasonable  detail to the extent then known by Buyer;  a
claim  with  respect  to  Section  3.3,  3.11,  3.13,  or 3.19,  or a claim  for
indemnification  or reimbursement not based upon any  representation or warranty
or any covenant or  obligation  to be performed  and complied  with prior to the
Closing Date, may be made at any time. If the Closing occurs, Buyer will have no
liability (for  indemnification or otherwise) with respect to any representation
or warranty,  or covenant or  obligation to be performed and complied with prior
to the Closing Date,  unless on or before March 31, 1998 Sellers notify Buyer of
a claim  specifying the factual basis of that claim in reasonable  detail to the
extent then known by Sellers.

11.5     LIMITATIONS ON AMOUNT--SELLERS

         Sellers will have no liability (for  indemnification or otherwise) with
respect to the matters  described  in clause  (a),  clause (b) or, to the extent
relating to any failure to perform or comply prior to the Closing  Date,  clause
(c) of Section  11.2 until the total of all Damages with respect to such matters
exceeds  $50,000,  and then only for the  amount by which  such  Damages  exceed
$50,000.  Sellers will have no liability (for indemnification or otherwise) with
respect to the matters  described  in clause (d) of Section 11.2 until the total
of all Damages with respect to such matters exceeds  $50,000,  and then only for
the amount by which such Damages exceed $50,000. However, this Section 11.5 will
not apply to any Breach of any of Sellers'  representations  and  warranties  of
which any  Seller  had  Knowledge  at any time  prior to the date on which  such

                                       44

<PAGE>

representation  and warranty is made or any intentional  Breach by any Seller of
any covenant or obligation,  and Sellers,  other than Rod Hawes, will be jointly
and severally liable for all Damages with respect to such Breaches.

11.6     LIMITATIONS ON AMOUNT--BUYER

         Buyer will have no liability (for  indemnification  or otherwise)  with
respect to the matters  described in clause (a) or (b) of Section 11.3 until the
total of all Damages with respect to such matters exceeds $50,000, and then only
for the amount by which such Damages exceed $50,000.  However, this Section 11.6
will not apply to any Breach of any of Buyer's representations and warranties of
which  Buyer  had  Knowledge  at any  time  prior  to the  date  on  which  such
representation  and warranty is made or any  intentional  Breach by Buyer of any
covenant or obligation, and Buyer will be liable for all Damages with respect to
such Breaches.

11.7     PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS

                  (a)  Promptly  after  receipt by an  indemnified  party  under
         Section 11.2 or 11.3, of notice of the  commencement  of any Proceeding
         against  it,  such  indemnified  party  will,  if a claim is to be made
         against an  indemnifying  party under such Section,  give notice to the
         indemnifying  party of the  commencement of such claim, but the failure
         to notify the  indemnifying  party will not  relieve  the  indemnifying
         party  of any  liability  that it may  have to any  indemnified  party,
         except to the extent that the indemnifying  party demonstrates that the
         defense  of such  action  is  prejudiced  by the  indemnifying  party's
         failure to give such notice.

                  (b)  If any  Proceeding  referred  to in  Section  11.7(a)  is
         brought  against  an  indemnified  party  and it  gives  notice  to the
         indemnifying  party  of  the  commencement  of  such  Proceeding,   the
         indemnifying  party will,  unless the claim involves Taxes, be entitled
         to  participate  in such  Proceeding  and, to the extent that it wishes
         (unless (i) the  indemnifying  party is also a party to such Proceeding
         and  the  indemnified   party  determines  in  good  faith  that  joint
         representation  would be inappropriate,  or (ii) the indemnifying party
         fails to provide  reasonable  assurance to the indemnified party of its
         financial    capacity   to   defend   such   Proceeding   and   provide
         indemnification with respect to such Proceeding), to assume the defense
         of such Proceeding with counsel  satisfactory to the indemnified  party
         and, after notice from the indemnifying  party to the indemnified party
         of  its  election  to  assume  the  defense  of  such  Proceeding,  the
         indemnifying  party will not, as long as it  diligently  conducts  such
         defense,  be liable to the indemnified  party under this Section 11 for
         any fees of other  counsel or any other  expenses  with  respect to the
         defense of such Proceeding,  in each case subsequently  incurred by the
         indemnified  party in connection  with the defense of such  Proceeding,
         other than reasonable costs of investigation. If the indemnifying party
         assumes  the  defense  of a  Proceeding,  (i) it will  be  conclusively
         established for purposes of this Agreement that the claims made in that
         Proceeding are within the scope of and subject to indemnification; (ii)
         no  compromise  or  settlement  of such  claims may be  effected by the
         indemnifying  party without the indemnified  party's consent unless (A)
         
                                       45
<PAGE>

         there is no finding or admission of any violation of Legal Requirements
         or any violation of the rights of any Person and no effect on any other
         claims that may be made against the indemnified party, and (B) the sole
         relief  provided  is  monetary  damages  that are  paid in  full by the
         indemnifying  party; and  (iii) the  indemnified  party  will  have  no
         liability  with respect to any compromise or settlement of such  claims
         effected  without its  consent.  If notice is given to an  indemnifying
         party  of the  commencement  of any  Proceeding  and  the  indemnifying
         party does not,  within  ten days  after the indemnified party's notice
         is given,  give  notice  to the  indemnified  party of  its election to
         assume the  defense of such  Proceeding,  the  indemnifying  party will
         be bound by any determination made in such Proceeding or any compromise
         or settlement effected by the indemnified party.

                  (c) Notwithstanding  the foregoing, if an indemnified    party
         determines   in  good faith that there is a reasonable probability that
         a Proceeding may adversely affect it or  its affiliates other than as a
         result  of  monetary  damages  for  which  it  would  be  entitled   to
         indemnification under  this Agreement,  the indemnified  party may,  by
         notice to the indemnifying party, assume the exclusive right to defend,
         compromise, or settle such  Proceeding, but the indemnifying party will
         not be bound by any determination of a  Proceeding so  defended or  any
         compromise or settlement effected without its consent (which may not be
         unreasonably withheld).

                  (d) Sellers hereby consent to the  non-exclusive  jurisdiction
         of any court in which a Proceeding is brought  against any  Indemnified
         Person for  purposes of any claim that an  Indemnified  Person may have
         under this  Agreement  with respect to such  Proceeding  or the matters
         alleged therein, and agree that process may be served on   Sellers with
         respect to such a claim anywhere in the world.

11.8     PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS

         A claim for  indemnification for any matter not involving a third-party
claim  may be  asserted  by notice to the  party  from whom  indemnification  is
sought.

                             12. GENERAL PROVISIONS

12.1     EXPENSES

         Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation,  execution,  and performance of this Agreement and the Contemplated
Transactions,  including  all  fees and  expenses  of  agents,  representatives,
counsel,  and  accountants.  In the event of termination of this Agreement,  the
obligation  of each party to pay its own expenses  will be subject to any rights
of such party arising from a breach of this Agreement by another party.

                                       46
<PAGE>

12.2     PUBLIC ANNOUNCEMENTS

          Any public  announcement  or similar  publicity  with  respect to this
Agreement or the Contemplated  Transactions  will be issued,  if at all, at such
time and in such manner as Buyer  determines.  Unless  consented  to by Buyer in
advance or required by Legal  Requirements,  prior to the Closing Sellers shall,
and  shall  cause the  Acquired  Companies  to,  keep  this  Agreement  strictly
confidential  and may not make any  disclosure of this  Agreement to any Person.
Sellers and Buyer will consult with each other concerning the means by which the
Acquired  Companies'  employees,  customers,  and  suppliers  and others  having
dealings  with the  Acquired  Companies  will be  informed  of the  Contemplated
Transactions,  and  Buyer  will  have  the  right  to be  present  for any  such
communication.

12.3     CONFIDENTIALITY

          Between the date of this  Agreement  and the Closing  Date,  Buyer and
Sellers will maintain in  confidence,  and will cause the  directors,  officers,
employees,  agents, and advisors of Buyer and the Acquired Companies to maintain
in  confidence,  and not use to the  detriment  of another  party or an Acquired
Company any written,  oral, or other  information  obtained in  confidence  from
another party or an Acquired  Company in connection  with this  Agreement or the
Contemplated Transactions,  unless (a) such information is already known to such
party or to others not bound by a duty of  confidentiality  or such  information
becomes publicly  available  through no fault of such party, (b) the use of such
information  is necessary or  appropriate  in making any filing or obtaining any
consent  or  approval   required  for  the   consummation  of  the  Contemplated
Transactions,  or (c) the  furnishing or use of such  information is required by
legal proceedings.

          If the Contemplated Transactions are not consummated,  each party will
return or destroy as much of such  written  information  as the other  party may
reasonably request.

12.4     NOTICES

         All notices,  consents,  waivers,  and other  communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with  written  confirmation  of  receipt),  provided  that a copy is  mailed by
registered  mail,  return  receipt  requested,  or  (c)  when  received  by  the
addressee,  if  sent  by a  nationally  recognized  overnight  delivery  service


                                       47

<PAGE>

(receipt  requested), in each case to the  appropriate  addresses and telecopier
numbers set forth below (or to such other addresses and telecopier  numbers as a
party may designate by notice to the other parties):

Sellers:

         Attention:            Barry Papenfuss
                               3855 South 500 West, No. R
                               Salt Lake City, Utah 84115

         Facsimile No.:        (801) 288-9210


Buyer:

                               Leasing Technology Incorporated
                               102 West 500 South, Suite 400
                               Salt Lake City, Utah 84101

         Attention:            Karl Badger
         Facsimile No.:        (801) 363-8487

         with a copy to:       Parry Murray Ward & Lawrence
                               1270 Eagle Gate Tower
                               60 East South Temple
                               Salt Lake City, Utah 84111

         Attention:            Richard J. Lawrence

         Facsimile No.:        (801) 521-3484


12.5     JURISDICTION; SERVICE OF PROCESS

         Any action or proceeding  seeking to enforce any provision of, or based
on any right arising out of, this  Agreement  may be brought  against any of the
parties in the courts of the State of Utah,  County of Salt Lake,  or, if it has
or can acquire jurisdiction, in the United States District Court for the Central
District of Utah, and each of the parties  consents to the  jurisdiction of such
courts  (and  of the  appropriate  appellate  courts)  in  any  such  action  or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding  referred to in the preceding  sentence may be served on any party
anywhere in the world.


                                       48

<PAGE>

12.6     FURTHER ASSURANCES

The  parties  agree (a) to furnish  upon  request  to each  other  such  further
information,  (b) to execute and deliver to each other such other documents, and
(c) to do such  other acts and  things,  all as the other  party may  reasonably
request  for the purpose of carrying  out the intent of this  Agreement  and the
documents referred to in this Agreement.

12.7     WAIVER

         The rights and remedies of the parties to this Agreement are cumulative
and  not  alternative.  Neither  the  failure  nor any  delay  by any  party  in
exercising any right,  power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right,  power, or
privilege,  and no single or  partial  exercise  of any such  right,  power,  or
privilege will preclude any other or further  exercise of such right,  power, or
privilege  or the  exercise of any other  right,  power,  or  privilege.  To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents  referred to in this Agreement can be discharged
by one party,  in whole or in part, by a waiver or  renunciation of the claim or
right  unless in writing  signed by the other  party;  (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given;  and (c) no  notice  to or demand on one party  will be deemed to be a
waiver of any  obligation of such party or of the right of the party giving such
notice or demand to take further  action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.

12.8     ENTIRE AGREEMENT AND MODIFICATION

         This Agreement supersedes all prior agreements between the parties with
respect to its subject matter  (including the Letter of Intent between Buyer and
Sellers  dated  December 17,  1996) and  constitutes  (along with the  documents
referred to in this  Agreement) a complete and exclusive  statement of the terms
of the agreement  between the parties with respect to its subject  matter.  This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.

12.9     DISCLOSURE LETTER

                  (a) The disclosures in the Disclosure Letter, and those in any
         Supplement  thereto,  must  relate  only  to  the  representations  and
         warranties  in the  Section of the  Agreement  to which they  expressly
         relate  and not  to  any  other  representation  or  warranty  in  this
         Agreement.

                  (b) In the event of any  inconsistency  between the statements
         in the body of this Agreement and those in the Disclosure Letter (other
         than an exception  expressly set forth as such in the Disclosure Letter
         with respect to a specifically identified  representation or warranty),
         the statements in the body of this Agreement will control.

                                       49

<PAGE>

12.10    ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS

         Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties,  which consent will not be  unreasonably
withheld, except that Buyer may assign any of its rights under this Agreement to
any Subsidiary of Buyer. Subject to the preceding sentence,  this Agreement will
apply to, be  binding  in all  respects  upon,  and inure to the  benefit of the
successors and permitted  assigns of the parties.  Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right,  remedy,  or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions  and conditions are for the sole and exclusive  benefit of
the parties to this Agreement and their successors and assigns.

12.11    SEVERABILITY

         If any provision of this Agreement is held invalid or  unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

12.12    SECTION HEADINGS, CONSTRUCTION

          The  headings  of  Sections  in  this   Agreement   are  provided  for
convenience  only and will not affect its  construction or  interpretation.  All
references  to "Section" or  "Sections"  refer to the  corresponding  Section or
Sections of this  Agreement.  All words used in this Agreement will be construed
to be of such gender or number as the  circumstances  require.  Unless otherwise
expressly  provided,  the word "including" does not limit the preceding words or
terms.

12.13    TIME OF ESSENCE

          With regard to all dates and time  periods set forth or referred to in
this Agreement, time is of the essence.

12.14    GOVERNING LAW

         This  Agreement  will be  governed  by the  laws of the  State  of Utah
without regard to conflicts of laws principles.

12.15    COUNTERPARTS

          This  Agreement may be executed in one or more  counterparts,  each of
which will be deemed to be an original copy of this  Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

                                       50

<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the date first written above.

Buyer:

LEASING TECHNOLOGY
INCORPORATED


By:---------------------------
     Karl Badger, President


Sellers:


------------------------                                    ------------------
Barry Papenfuss                                               Tim Papenfuss



------------------------                                    ------------------
Greg Park                                                     Rod Hawes



------------------------                                    -----------------
Andy Toolson                                                  Tom Pugmire



------------------------                                    ------------------
Will Papenfuss                                                Bruce Papenfuss




                                       51

<PAGE>
<TABLE>
<CAPTION>

                                                                 SCHEDULE A

               Sellers


Name                           Address                        Number of                 Number of          Number of
                                                              Shares of                 Preferred          LTI
                                                              Fan-Tastic                Shares of          Option
                                                              Owned                     LTI to be          to be
                                                                                        issued             issued
-----------------       ----------------------            --------------            -------------     --------------
<S>                     <C>                                <C>                         <C>                 <C>   
Barry Papenfuss         3855 S. 500 W. #R                  1,972,600                   37,012              56,903
                        Salt Lake City, UT
                        84115

Tim Papenfuss           3441 S. Medford                    1,054,500                   19,786              30,418
                        Bountiful, UT 84010

Greg Park               4321 S. Camille                      922,500                   17,310              26,611
                        Holladay, UT 84124

Rodney A. Hawes         Life Re Corp.                        800,000                   17,230              23,076
                        969 High Ridge Rd.
                        Stamford, CT 06905

Andy Toolson            Farigold #9                          250,000                    4,808               7,212
                        Alella (Barcelona)
                        08382
                        Spain

Tom Pugmire             c/o Annuity Pro-                     150,000                    2,885               4,327
                        fessional Mgt, Inc.
                        19125 N. Creek Pkwy.
                        #206
                        Bothell, WA 98011

B. Willes
Papenfuss, Jr.          12313 SE Wagner St.                   30,000                     577                 865
                        Portland, OR 97236
</TABLE>


                                       52

<PAGE>
<TABLE>
<CAPTION>


Name                           Address                        Number of                 Number of          Number of
                                                              Shares of                 Preferred          LTI
                                                              Fan-Tastic                Shares of          Option
                                                              Owned                     LTI to be          to be
                                                                                        issued             issued
-----------------       ----------------------            --------------            -------------     --------------
<S>                     <C>                                   <C>                       <C>                <C>
B. Willes
Papenfuss, Sr.           517 N. First Avenue                    20,400                   392                 588
                         St. Ignatius, MT 59865


                                                             =========               =======             =======
                               TOTAL:                        5,200,000               100,000             150,000

</TABLE>

                                       53

<PAGE>

                                TABLE OF CONTENTS

1. DEFINITIONS...........................................................1

"Acquired Companies"...................................................  1
"Applicable Contract"..................................................  1
"Balance Sheet"........................................................  1
"Best Efforts".........................................................  1
"Breach"...............................................................  1
"Buyer"................................................................  1
"Closing"..............................................................  2
"Closing Date".........................................................  2
"Company"..............................................................  2
"Consent"..............................................................  2
"Contemplated Transactions"............................................  2
"Contract".............................................................  2
"Damages"..............................................................  2
"Disclosure Letter"....................................................  2
"Employment Agreements"................................................  2
"Encumbrance"..........................................................  2
"Environment"..........................................................  2
"Environmental, Health, and
  Safety Liabilities"..................................................  3
"Environmental Law"....................................................  3
"ERISA"................................................................  4
"Facilities"...........................................................  4
"GAAP".................................................................  4
"Governmental Authorization"...........................................  4
"Governmental Body"....................................................  4
"Hazardous Activity"...................................................  5
"Hazardous Materials"..................................................  5
"Intellectual Property Assets".........................................  5
"IRC"..................................................................  5
"IRS"    ..............................................................  5
"Knowledge"............................................................  5
"Legal Requirement"....................................................  5
"Loan Agreements.......................................................  5
"Occupational Safety and
  Health Law"..........................................................  6
"Order"................................................................  6
"Ordinary Course of Business"..........................................  6
"Organizational Documents".............................................  6
"Person"...............................................................  6
"Proceeding"...........................................................  6

                                        i

<PAGE>

"Related Person".......................................................  6
"Release"..............................................................  7
"Representative".......................................................  7
"Securities Act".......................................................  7
"Sellers"..............................................................  7
"Sellers' Releases"....................................................  7
"Shares"...............................................................  8
"Subsidiary"...........................................................  8
"Tax Return"...........................................................  8
"Threat of Release"....................................................  8
"Threatened"...........................................................  8

2. SALE AND TRANSFER OF SHARES; CLOSING................................  8

2.1    Shares..........................................................  8
2.2    Purchase Price..................................................  9
2.3    Closing.........................................................  9
2.4    Closing Obligations.............................................  9

3. REPRESENTATIONS AND WARRANTIES OF CERTAIN SELLERS................... 10

3.1    Organization and Good Standing.................................. 10
3.2    Authority; No Conflict.......................................... 11
3.3    Capitalization.................................................. 12
3.4    Financial Statements............................................ 13
3.5    Books and Records............................................... 13
3.6    Title to Properties; Encumbrances............................... 13
3.7    Condition and Sufficiency of Assets............................. 14
3.8    Accounts Receivable............................................. 14
3.9    Inventory....................................................... 15
3.10   No Undisclosed Liabilities...................................... 15
3.11   Taxes........................................................... 15
3.12   No Material Adverse Change...................................... 16
3.13   Employee Benefits............................................... 16
3.14   Compliance with Legal Requirements; Governmental Authorization.. 17
3.15   Legal Proceedings; Orders....................................... 19
3.16   Absence of Certain Changes and Events........................... 20
3.17   Contracts; No Defaults.......................................... 21
3.18   Insurance....................................................... 24
3.19   Environmental Matters........................................... 25
3.20   Employees....................................................... 27
3.21   Labor Relations; Compliance..................................... 28
3.22   Intellectual Property........................................... 28
3.23   Certain Payments................................................ 32

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3.24   Disclosure...................................................... 32
3.25   Relationships with Related Persons.............................. 33
3.26   Brokers or Finders.............................................. 33

4. REPRESENTATIONS AND WARRANTIES OF PAPENFUSS, SR., PAPENFUSS, JR.,
    PUGMIRE AND TOOLSON................................................ 33

4.1    Authority; No Conflict.......................................... 33
4.2    Ownership of Shares............................................. 34
4.3    No Undisclosed Liabilities...................................... 34
4.4    Disclosure...................................................... 34

5. REPRESENTATIONS AND WARRANTIES OF BUYER............................. 35

5.1    Organization and Good Standing.................................. 35
5.2    Authority; No Conflict.......................................... 35
5.3    Investment Intent............................................... 35
5.4    Certain Proceedings............................................. 36
5.5    SEC Filings......................................................36
5.6    Brokers or Finders.............................................. 36

6. COVENANTS OF SELLERS PRIOR TO CLOSING DATE.......................... 36

6.1    Access and Investigation........................................ 36
6.2    Operation of the Businesses of the Acquired Companies........... 36
6.3    Negative Covenant............................................... 37
6.4    Required Approvals.............................................. 37
6.5    Notification.................................................... 37
6.6    Payment of Indebtedness by Related Persons...................... 38
6.7    No Negotiation.................................................. 38
6.8    Best Efforts.................................................... 38

7. COVENANTS OF BUYER PRIOR TO CLOSING DATE............................ 38

7.1    Approvals of Governmental Bodies................................ 38
7.2    Best Efforts.................................................... 39

8. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE................. 39

8.1    Accuracy of Representations..................................... 39
8.2    Sellers' Performance............................................ 39
8.3    Consents........................................................ 39
8.4    Additional Documents...........................................  40
8.5    No Proceedings.................................................. 40

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8.6    No Claim Regarding Stock Ownership or Sale Proceeds............. 40
8.7    No Prohibition...................................................40

9. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE................ 40

9.1    Accuracy of Representations..................................... 41
9.2    Buyer's Performance............................................. 41
9.3    Consents........................................................ 41
9.4    Additional Documents............................................ 41
9.5    No Injunction................................................... 41

10. TERMINATION........................................................ 42

10.1   Termination Events.............................................. 42
10.2   Effect of Termination........................................... 42

11. INDEMNIFICATION; REMEDIES.......................................... 42

11.1   Survival; Right to Indemnification Not Affected by Knowledge.... 42
11.2   Indemnification and Payment of Damages by Sellers............... 43
11.3   Indemnification and Payment of Damages by Buyer................. 44
11.4   Time Limitations................................................ 44
11.5   Limitations on Amount--Sellers.................................. 44
11.6   Limitations on Amount--Buyer.................................... 45
11.7   Procedure for Indemnification--Third Party Claims............... 45
11.8   Procedure for Indemnification--Other Claims..................... 46

12. GENERAL PROVISIONS................................................. 46

12.1   Expenses........................................................ 46
12.2   Public Announcements............................................ 47
12.3   Confidentiality................................................. 47
12.4   Notices......................................................... 47
12.5   Jurisdiction; Service of Process................................ 48
12.6   Further Assurances.............................................. 49
12.7   Waiver.......................................................... 49
12.8   Entire Agreement and Modification............................... 49
12.9   Disclosure Letter............................................... 49
12.10  Assignments, Successors, and No Third-Party Rights.............. 50
12.11  Severability.................................................... 50
12.12  Section Headings, Construction.................................. 50
12.13  Time of Essence................................................. 50
12.14  Governing Law................................................... 50
12.15  Counterparts.................................................... 50

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SCHEDULES

Schedule A Sellers Information..........................................52
Schedule B Rights, Preferences and Limitations of Preferred Stock.........

EXHIBITS

Exhibit 1 Disclosure Letter...............................................
Exhibit 2.4(a)(ii) Release................................................
Exhibit 2.4(a)(iii) Employment Agreement..................................
Exhibit 2.4(a)(iv) Investment Letter......................................
Exhibit 2.4(a)(vi) Loan Agreement.........................................
Exhibit 2.4(a)(vii) Shareholders Agreement................................
Exhibit 2.4(a)(vi) Option Agreement.......................................

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