STOCK PURCHASE
                                    AGREEMENT



                                Print Works, Inc.
                                    (Company)



                 American Resources and Development Corporation
                                     (Buyer)



                                  May 30, 1998
                                      Date


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                                TABLE OF CONTENTS

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

"Acquired Companies".......................................................1
"Adjustment Amount"........................................................1
"Applicable Contract"......................................................1
"Balance Sheet"............................................................1
"Best Efforts".............................................................1
"Breach"...................................................................1
"Buyer"....................................................................1
"Closing"..................................................................1
"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"......................................................2
"Environmental Law"........................................................3
"ERISA"....................................................................4
"Facilities".............................................................. 4
"GAAP".....................................................................4
"Governmental Authorization"...............................................4
"Governmental Body"........................................................4
"Hazardous Activity".......................................................4
"Hazardous Materials"......................................................5
"Intellectual Property Assets".............................................5
"IRC"......................................................................5
"IRS"    ..................................................................5
"Knowledge"................................................................5
"Legal Requirement"........................................................5
"Occupational Safety and
  Health Law"..............................................................5
"Order"....................................................................6
"Ordinary Course of Business"..............................................6


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"Organizational Documents".................................................6
"Person"...................................................................6
"Proceeding"...............................................................6
"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......................................................8
2.3    Closing.............................................................9
2.4    Closing Obligations.................................................9

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

3.1    Organization and Good Standing.....................................10
3.2    Authority; No Conflict.............................................10
3.3    Capitalization.....................................................12
3.4    Financial Statements...............................................12
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 Authorizations......................................17
3.15   Legal Proceedings; Orders..........................................19
3.16   Absence of Certain Changes and Events............................. 20


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

4. REPRESENTATIONS AND WARRANTIES OF BUYER............................... 33

4.1    Organization and Good Standing.................................... 33
4.2    Authority; No Conflict............................................ 33
4.3    Investment Intent................................................. 34
4.4    Certain Proceedings............................................... 34
4.5    SEC Filings........................................................34
4.6    Brokers or Finders................................................ 34

5. COVENANTS OF SELLERS PRIOR TO CLOSING DATE............................ 34

5.1    Access and Investigation.......................................... 34
5.2    Operation of the Businesses
         of the Acquired Companies....................................... 35
5.3    Negative Covenant................................................. 35
5.4    Required Approvals................................................ 35
5.5    Notification...................................................... 36
5.6    Payment of Indebtedness by Related Persons........................ 36
5.7    No Negotiation.................................................... 36
5.8    Best Efforts...................................................... 36

6. COVENANTS OF BUYER PRIOR TO CLOSING DATE.............................. 37

6.1    Approvals of Governmental Bodies.................................. 37
6.2    Best Efforts...................................................... 37

7. CONDITIONS PRECEDENT TO BUYER'S
     OBLIGATION TO CLOSE................................................. 37

7.1    Accuracy of Representations....................................... 37


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7.2    Sellers' Performance.............................................. 37
7.3    Consents.......................................................... 38
7.4    Additional Documents.............................................. 38
7.5    No Proceedings.................................................... 38
7.6    No Claim Regarding Stock Ownership or
         Sale Proceeds................................................... 38
7.7    No Prohibition.................................................... 39

8. CONDITIONS PRECEDENT TO SELLERS'
    OBLIGATION TO CLOSE.................................................. 39

8.1    Accuracy of Representations....................................... 39
8.2    Buyer's Performance............................................... 39
8.3    Consents.......................................................... 39
8.4    Additional Documents.............................................. 39
8.5    No Injunction..................................................... 40

9. TERMINATION........................................................... 40

9.1    Termination Events................................................ 40
9.2    Effect of Termination............................................. 40

10. INDEMNIFICATION; REMEDIES............................................ 41

10.1   Survival; Right to Indemnification
          Not Affected by Knowledge...................................... 41
10.2   Indemnification and Payment of
          Damages by Sellers............................................. 41
10.3   Indemnification and Payment
          of Damages by Buyer............................................ 42
10.4   Time Limitations.................................................. 42
10.5   Limitations on Amount--Sellers.................................... 43
10.6   Limitations on Amount--Buyer...................................... 43
10.7   Procedure for Indemnification--
          Third Party Claims............................................. 43
10.8   Procedure for Indemnification--
          Other Claims................................................... 44

11. GENERAL PROVISIONS................................................... 45

11.1   Expenses.......................................................... 45


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11.2   Public Announcements.............................................. 45
11.3   Confidentiality................................................... 45
11.4   Notices........................................................... 45
11.5   Jurisdiction; Service of Process.................................. 46
11.6   Further Assurances................................................ 47
11.7   Waiver............................................................ 47
11.8   Entire Agreement and Modification................................. 47
11.9   Disclosure Letter................................................. 47
11.10  Assignments, Successors, and
          No Third-Party Rights.........................................  48
11.11  Severability...................................................... 48
11.12  Section Headings, Construction.................................... 48
11.13  Time of Essence................................................... 48
11.14  Governing Law..................................................... 48
11.15  Counterparts...................................................... 49

SCHEDULES

Schedule A Sellers Information........................................... 51

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                                   SCHEDULE A
                                    SELLERS

   Name           Address     # of Shares of    Shares of        Share Potential
                                 PPW Owned     ARDCO Stock to     in Contingent
                                               be Issued at          Stock
                                                  Closing
---------------  --------     --------------   --------------    ---------------
Jeffrey Harden                     26,922         64,953             64,953
Lynn Harden                        34,000         82,030             82,030
Brittany Harden                     1,000          2,413              2,413
Blake Harden                        1,000          2,413              2,413
Gary Lange                          7,600         18,336             18,336
Charley Soneson                     8,500         20,508             20,508
Patrick Estrada                     4,000          9,651              9,651
Thomas Lundberg                     3,500          8,444              8,444
Ronald Thornley                     3,000          7,238              7,238
Lynn Braun                            833          2,010              2,010
Cleon Braun                           500          1,206              1,206
Allan Braun                         2,166          5,226              5,226
Robert Pieters                      2,405          5,802              5,802
Scott Newrones                      1,000          2,413              2,413
Pamela Newrones                     1,628          3,928              3,928
Gary Evans                          1,000          2,413              2,413

The following  EXHIBITS to the Print Works,  Inc. Stock  Purchase  Agreement are
omitted and will be provided to the Commission upon request.

Exhibit 1 Disclosure Letter
Exhibit 2 Employment Agreement
Exhibit 3 Release Agreement
Exhibit 4 Investment Letter
Exhibit 5 Loan Agreement
Exhibit 6 Security Agreement

<PAGE>

                            STOCK PURCHASE AGREEMENT

This Stock Purchase  Agreement  ("Agreement") is executed as of May 30, 1998, to
be  effective  as of  April 1,  1998,  by and  between  American  Resources  and
Development Corporation, 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,  not less than eighty
percent (80%) and up to one hundred percent (100%) of the issued and outstanding
shares (the "Shares") of capital stock of Print Works,  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.

     "Asking  Price"--The  closing  Asking Price of Buyer's common stock for any
     day shall he the last reported sale price or, in case no such reported sale
     takes place on such day,  the average of the asked  prices for such day, in
     each case (1) on the principal  national  securities  exchange on which the
     shares of common  stock are listed or to which such shares are  admitted to
     trading or (2) if the common  stock is not listed or admitted to trading on
     a national securities exchange, in the over-the-counter  market as reported
     by NASDAQ or any comparable system or (3) if the common stock is not listed
     on NASDAQ or a  comparable  system as  furnished  by two  members of NASDAQ
     selected from time to time in good faith by the Board of Directors of Buyer
     for that  purpose.  In the absence of all of the  foregoing,  or if for any
     other  reason  the  current  asking  price per share  cannot be  determined
     pursuant to the foregoing  provisions of this paragraph,  the asking market
     price per share shall be the fair market  value  thereof as  determined  in
     good faith by the Board of Directors of the Buyer.

<PAGE>

     "Average  Asking  Price"--"Average  asking  price" of Buyer's  common stock
     shall be the average of the daily  closing  asking prices for the six month
     period  ending  on the last  full  trading  day on the  exchange  or market
     specified in the succeeding  sentence  prior to March31,  1999. The closing
     Asking Price of Buyer's common stock for any day shall be the last reported
     sale price or, in case no such  reported  sale takes place on such day, the
     average of the asked prices for such day, in each case (1) on the principal
     national securities exchange on which the shares of common stock are listed
     or to which such shares are  admitted to trading or (2) if the common stock
     is not listed or admitted to trading on a national securities exchange,  in
     the over-the-counter  market as reported by NASDAQ or any comparable system
     or (3) if the common stock is not listed on NASDAQ or a  comparable  system
     as  furnished by two members of NASDAQ  selected  from time to time in good
     faith by the Board of Directors of Buyer for that  purpose.  In the absence
     of all of the  foregoing,  or if for any other  reason the  current  asking
     price per share cannot be determined  pursuant to the foregoing  provisions
     of this  paragraph,  the asking  market  price per share  shall he the fair
     market value  thereof as determined in good faith by the Board of Directors
     of the Buyer.

     "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.

     "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;

                                       2
<PAGE>

         (b)  the  execution,   delivery,  and  performance  of  the  Employment
              Agreements,   the  Noncompetition  Agreements,  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.

     "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;

                                       3
<PAGE>


         (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;

         (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

                                       4
<PAGE>


         (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.

     "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

                                       5
<PAGE>

     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.

     "Net  Income"--Audited  annual net income after interest and  depreciation,
     but before taxes have been deducted.

     "Non-Management  Sellers"--all  Sellers  except for  Jeffrey  Harden,  Lynn
     Harden, Brittany Harden and Blake Harden.

                                       6
<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:

                                       7
<PAGE>

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

         (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.

                                       8
<PAGE>

     "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.

     "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.

                                       9
<PAGE>

                     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.

2.2 PURCHASE PRICE

The purchase price (the "Purchase Price") for the Shares will be the issuance of
517,564  shares of common  stock of Buyer.  The common  stock shall be issued to
Sellers in the amounts set forth on Schedule A hereof. A portion of the Purchase
Price  shall be paid at the  Closing  (258,782  shares)  and a portion  (258,782
shares) shall be contingent  and paid pursuant to Section 2.3. On or before July
15, 1999, if the Average Asking Price of Buyer's common stock is not equal to or
greater than $5.00,  Sellers shall be issued  additional  shares of common stock
equal to the number of shares previously issued to them pursuant to this Section
2.2  multiplied  by 5 and  divided by the Average  Asking  Price less the shares
previously issued to such Seller pursuant to this Section 2.2.

2.3 CONTINGENT CONSIDERATION

In addition to the shares of stock issued to Sellers at Closing,  Sellers  shall
have the right for a three year  period to receive  additional  shares of common
stock of Buyer  based upon the Net Income of the  Company  for each of the three
Fiscal Years ended March 31, 2001. Such additional  shares shall be issued on or
before  July 15 of  each  applicable  year  in  accordance  with  the  following
provisions:

      (a)If the Net Income of the  Company  for the fiscal  year ended March 31,
         1999 is  $179,400  or  greater,  Sellers  shall he  issued a number  of
         Buyer's  common shares equal to 86,261  multiplied by the Net Income of
         the Company for such period, divided by $538,200.

      (b)If the Net Income of the Company for the two year period  ending  March
         31, 2000 is $448,500  or greater,  Sellers  shall he issued a number of
         Buyer's common shares equal to 172,521  multiplied by the Net Income of
         the company for such period, divided by $1,345,500, minus the number of
         shares issued pursuant to Section 2.3(a).

      (c)If the Net Income of the Company for the three year period ending March
         31, 2001 is $806,400  or greater,  Sellers  shall be issued a number of
         Buyer's common shares equal to 258,782  multiplied by the Net Income of
         the Company for such period, divided by $2,419,200, minus the number of
         shares issued pursuant to Sections 2.3(a) and (b),  provided,  however,
         the  total  number of  Buyer's  common  shares to be issued to  Sellers
         pursuant  to Section  2.3(a),  (1,)and  (c)  (without  considering  any
         increase  as a result of  Section  2.3(d)),  shall not  exceed  258,782
         shares.

                                       10
<PAGE>

      (d)The number of Buyer's common shares issued pursuant to Sections 2.3(a),
         (b) and (c) shall be increased,  but not decreased by  multiplying  the
         number of shares to he  issued  by $5.00 and  dividing  by the  Average
         Asking  Price of  Buyer's  common  stock.  The  total  number of shares
         issuable to Sellers pursuant to Sections 2.3(a),  (b) and (c) shall not
         exceed 862,607.

2.4 LENDING COMMITMENTS

Buyer and Sellers  acknowledge  that Buyer has loaned $445,000 to the Company as
of the date of this Agreement.

These loans shall be evidenced by a Loan  Agreement  and  Promissory  Note to be
signed at the Closing.  Such Loan Agreement and Promissory  Note shall be in the
form of exhibits 5 and 6 attached to this  Agreement.  Interest on fluids loaned
to the Company shall accrue at eight percent. Interest on the loan shall be paid
quarterly and all interest and  principal  shall be due and payable on or before
April 30, 2001, all as provided in the Loan Agreement and Promissory Note.

2.5 CLOSING

The exchange of shares (the "Closing")  provided for in this Agreement will take
place at the offices of Parry  Lawarence & Ward,  1270 Eagle Gate Tower, 60 East
South Temple,  Salt Lake City,  Utah 84111, at 9:30 a.m. (local time) on June 9,
1998 or at such other time and place as the parties may agree. The parties agree
that the acquisition of the Shares shall be deemed to have occurred and shall be
effective as of April 1, 1998.  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.

2.6 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  3  executed  by  Sellers
                  (collectively, "Sellers' Releases");

         (iii)    an employment  agreement in the form of Exhibit 2, executed by
                  Jeffrey Harden ("Employment Agreement");

         (iv)     Subscription  Agreements  in the form of Exhibit 7 executed by
                  Sellers (collectively, the "Subscription Agreements");

                                       11
<PAGE>

         (v)      investment  letters  in the form of  Exhibit  4,  executed  by
                  Sellers (collectively, the "Investment Letters"); and

         (vi)     a certificate  executed by Sellers 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

         (vii)    a Loan agreement and Promissory Note in the form of Exhibits 6
                  and 7,  executed  by the  Company  and  guaranteed  by certain
                  Sellers (the "Loan Agreement"); and

      (b)Buyer will deliver to Sellers:

         (i)      certificates  for  common  stock  in Buyer  totalling  258,782
                  shares of common stock; and

         (ii)     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;


                  3. REPRESENTATIONS AND WARRANTIES OF SELLERS

     Sellers 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.

                                       12
<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, the
         Sellers' Releases, and the Noncompetition Agreements (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;

                                       13
<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 common 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 Acquired  Company  consist of ________
shares of common stock,  ______ par value per share, of which 108,182 shares are
issued and outstanding and constitute the Shares. 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.

3.4 FINANCIAL STATEMENTS

Sellers have delivered to Buyer:  (a) unaudited  consolidated  balance sheets of
the  Acquired  Companies  as at March 31,  1998 (the  "Balance  Sheet")  and the
related unaudited  consolidated  statements of income. Such financial statements

                                       14
<PAGE>

and notes fairly  present the financial  condition and the results of operations
as at the respective  dates of and for the periods referred to in such financial
statements,  subject,  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
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  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

                                       15
<PAGE>

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
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

                                       16
<PAGE>

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 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.

                                       17
<PAGE>

         (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.

     "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.

                                       18
<PAGE>


     "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 IRC ss. 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:

                                       19
<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;

         (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,

                                       20
<PAGE>

                  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;

                                       21
<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;

                                       22
<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;

                                       23
<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;

                                       24
<PAGE>


         (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;

         (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

                                       25
<PAGE>

                  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  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

                                       26
<PAGE>

         (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:

         (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.

                                       27
<PAGE>

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.  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.

                                       28
<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,  1997;
         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.

                                       29
<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,  1997,  no  Acquired  Company has been or is a party to any
collective  bargaining or other labor Contract.  Since December 31, 1997,  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.

                                       30
<PAGE>

3.22 INTELLECTUAL PROPERTY

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

         (i)      the  name  "Pacific  Print",  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.

                                       31
<PAGE>

         (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 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.

                                       32
<PAGE>

         (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.

         (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.

                                       33
<PAGE>

     (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.

         (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.

                                       34
<PAGE>


     (c) There is no fact known to either  Seller that has specific  application
         to either 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.

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 NON-MANAGEMENT SELLERS

      Non-Management Sellers, 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
             Subscription   Agreement,   Investment  Letter,  and  the  Sellers'
             Releases   (collectively,   the  Non-Management   Sellers'  Closing
             Documents"),  the  Non-Management  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,

                                       35
<PAGE>

             authority,  and capacity to execute and deliver this  Agreement and
             the Non-Management  Sellers' Closing Documents and to perform their
             obligations  under this Agreement and the  Non-Management  Sellers'
             Closing Documents.

      (b)    Sellers are  acquiring  the common 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

Each Seller is and will be on the Closing Date the record and  beneficial  owner
and  holder  of the  Shares  to be  exchanged  by him,  free  and  clear  of all
Encumbrances.  Each  Seller owns the number of shares set  opposite  his name on
Schedule A. No legend or other  reference to any purported  Encumbrance  appears
upon Seller's certificate representing the Shares.

4.3   DISCLOSURE

      (a)    To the  knowledge  of Seller,  no  representation  or  warranty  of
             Sellers in this Agreement  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)    To the knowledge of Seller, 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)    To the  knowledge  of Seller,  there is no fact known to any Seller
             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 Seller 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.

4.4 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.

                   5. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Sellers as follows:

                                       36
<PAGE>

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 4.2, 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  4.2,  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.

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.

                                       37
<PAGE>

5.5 SEC FILINGS

Buyer has  furnished  Sellers  with  copies of Form 10-K and Forms  10-Q for all
period  since  March 31,  1997.  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;

     (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;

                                       38
<PAGE>


     (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 4.2 (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 will promptly
notify Buyer of the  occurrence of any Breach of any covenant of Sellers in this
Section 5 or of the  occurrence of any event that may make the  satisfaction  of
the conditions in Section 7 impossible or unlikely.

                                       39
<PAGE>

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 9,
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.

7.2 BEST EFFORTS

Except as set forth in the  proviso to  Section  6.1,  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.

                                       40
<PAGE>

             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,  3.24, 4.1, and 4.2 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.

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 7, or (iv) otherwise facilitating the
     consummation or performance of any of the Contemplated Transactions.

                                       41
<PAGE>

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):

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.

                                       42
<PAGE>

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  8, 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.

9.6 TAX FREE EXCHANGE

     The  exchange of Shares  pursuant to this  Agreement  is subject to Sellers
owning  not less  than  eighty  percent  (80)%)  of the  Shares  of the  Company
exchanging their Shares pursuant to this Agreement.

                                       43
<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
         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
         June 30, 1998, or such later date as the parties may agree upon.

9.2 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.

                                       44

<PAGE>


                          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 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

Sellers,  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 either  Seller of any  covenant  or  obligation  of such
         Seller in this Agreement;

                                       45
<PAGE>


     (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 part 3.15 or 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 either 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,
1999 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  December  31, 1997  Sellers  notify Buyer of a claim
specifying  the factual basis of that claim in  reasonable  detail to the extent
then known by Sellers.

                                       46
<PAGE>

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 10.2 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  10.2 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 11.6 will not
apply to any Breach of any of Sellers'  representations  and warranties of which
either  Seller  had  Knowledge  at any time  prior  to the  date on  which  such
representation  and warranty is made or any intentional  Breach by either Seller
of any covenant or obligation,  and Sellers 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  11.4 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 11.7 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
         11.4, 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 11.8(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

                                       47
<PAGE>

         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) 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.

                                       48
<PAGE>

                             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.

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.

                                       49
<PAGE>

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 (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:                      c/o Mr. Jeffrey Harden
         Attention:           2035 N.E. 181st
                              Gresham, Oregon  97230
         Facsimile #:         (503) 665-1914

Buyer:                         American Resources And Development Corporation
         Attention:            Karl Badger
                               102 West 500 South, Suite 318
                               Salt Lake City, Utah 84101
         Facsimile #:          (801) 363-8487

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.

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.

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<PAGE>

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 26, 1997) 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.

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

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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.

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

Buyer:  American Resources and Development Corporation



By:    /s/ Karl Badger 
       ------------------------
       (Karl Badger, President)



Sellers:

/s/ Jeffrey Harden
----------------
Jeffrey Harden
                                /s/ Lynn Harden              /s/ Brittany Harden
/s/ Blake Harden                ---------------              ------------------
------------------              Lynn Harden                  Brittany Harden
Blake Harden

/s/ Patrick Estrada
------------------
Patrick Estrada
                                /s/Thomas Lundberg           /s/Ronald Thomley 
/s/ Lynn Braun                  ----------------             ------------------
------------------              Thomas Lundberg              Ronald Thomley
Lynn Braun
                                /s/Cleon Braun              /s/Allan Braun 
/s/ Robert Pieters              ----------------             ------------------
------------------              Cleon Braun                  Allan Braun
Robert Pieters
                                /s/Scott Newrones            /s/Pamela Newrones 
                                ----------------             ------------------
                                Scott Newrones               Pamela Newrones

/s/ Pamela Carey 
------------------
Pamela Carey
                                /s/ Cameron Smith 
/s/ Elizabeth Dorr              ----------------
------------------              Cameron Smith
Elizabeth Dorr
                                /s/Gary LaPointe             /s/Sandra Lutz
/s/ Don Cox                     -----------------            -----------------
-----------------               Gary LaPointe                Sandra Lutz
Don Cox

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